The dollar is likely to remain firm next week amid concerns that the global economy is losing steam. This dynamic should continue to drive positioning adjustments that are also broadly dollar supportive.
Technical momentum may be supportive for the dollar as well after most of the majors failed to break the top end of their recent ranges. This should result in a reversal in the price action and may lead currencies to test the bottom end of their recent ranges as positioning adjustment continues. But the inability to break key levels means currencies are likely stuck in recent ranges.
On the data front, next week we get more business surveys for March, with the Chicago PMI the key report. Expectations are for a slight decline to 63.0 from 64.0. Next week we get speeches from Plosser, Bernanke, Rosengren, Fisher, Bullard, Lockhart and Lacker (both of which are voters). However, recent economic developments argue that the prospects for QE3 have declined. This is likely to limit the influence that these speeches have on price action.
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