The global economy closed last week with the main focus on the outcome of the January Federal Open Market Committee (FOMC) meeting, where the US Fed (Fed) maintained its benchmark interest rate at 3.75%, in line with market expectations.
The decision reflects the Fed's cautious stance in balancing inflation risks and economic growth momentum, after a series of data showed the US economy remained stable but not yet strong enough to support easing monetary policy in the near future.
Market sentiment, however, turned more volatile after US President Donald Trump nominated former Fed Governor Kevin Warsh as the new Fed Chairman.
The nomination sparked speculation about a potential change in monetary policy direction, as Warsh is known for his tendency to take a more hawkish stance on inflation. This factor led to increased volatility in financial markets, particularly involving movements in the US dollar and bond markets.
TUESDAY (February 3, 2026)
JOLTS Data (10.40 PM) – The Job Openings and Labor Turnover Survey (JOLTS) is an important indicator of the strength of the US labor market.
The previous reading recorded 7.15 million job openings, while market expectations for the latest release increased to 7.23 million.
If this data is published above expectations, it shows that labor demand remains strong, reflecting employers' confidence in continuing to hire.
This situation supports economic growth and has the potential to strengthen the US dollar due to expectations of tighter monetary policy for a longer period.
Conversely, if the JOLTS reading is lower than expected, it could be an early signal that the labor market is starting to lose momentum, thus increasing concerns about an economic slowdown. This situation has the potential to put pressure on the USD as the market begins to reassess expectations for the Fed's interest rate.
WEDNESDAY (February 4, 2026)
ADP Employment Report (9.15 PM) – The ADP Non-Farm Employment Change data serves as an early indicator of the performance of the private sector labor market.
The previous reading recorded an increase of 41,000 jobs, while the latest expectation was an increase of 46,000 based on analysts' views.
If the data meets or exceeds expectations, it reflects stable job growth, thus supporting the US economic outlook and providing a positive boost to the US dollar. A strong reading also has the potential to reinforce expectations that the Fed will maintain a cautious stance on any monetary policy easing.
However, if the ADP report records a lower-than-expected figure, it could spark concerns about a slowdown in the labor market, further weighing on market sentiment and weakening the USD.
Services PMI Data (11 PM) – The Purchasing Managers' Index (PMI) for the services sector is an important indicator of the level of economic activity in the sector that contributes the largest share of US Gross Domestic Product (GDP).
The previous reading was at 54.4, while the latest estimate showed a modest decline to 53.5.
Despite recording a decline, a level above 50 still indicates expansion in economic activity. If the data meets expectations, it indicates moderate but steady growth, supporting a balanced economic outlook.
Conversely, if the reading falls below 50, it signals a contraction in the services sector, thus increasing concerns about an economic slowdown and potentially putting pressure on the USD.
THURSDAY (February 5, 2026)
BOE Rate Meeting (8 PM) – The Bank of England (BOE) is expected to keep interest rates at 3.75%, in line with a cautious approach in balancing inflationary pressures and the risk of a slowdown in economic growth in the United Kingdom.
The decision to keep rates on hold reflects the BOE’s efforts to assess the effectiveness of previous policy tightening, while also monitoring inflation developments that remain above target.
If the BOE’s statement is dovish, the market could see pressure on the pound sterling and increased global risk appetite.
Conversely, a hawkish tone could potentially support GBP strength and influence the movement of other major currencies, including the USD, through changes in global capital flows.
FRIDAY (February 6, 2026)
University of Michigan Consumer Sentiment Prelims (11 PM) – The University of Michigan Consumer Sentiment Index measures the level of consumer confidence in current economic conditions and future prospects.
The previous reading was at 56.4, while the latest estimate showed a decline to 55.0.
If this data is published lower than expected, it gives the impression that consumers are becoming more cautious in spending due to cost of living pressures and economic uncertainty, thus potentially affecting economic growth and putting pressure on the US dollar.
However, if the reading meets or exceeds expectations, it reflects consumer confidence that remains intact, supporting domestic spending and economic growth, thus providing positive support to the USD.
