Weekly Outlook: May 6 to 10 by Investing.com

Investing.com – This week, investors will look at US inflation reports after the US Federal Reserve said last week that it will keep interest rates for a long time.

President Donald Trump spoke of the low inflation in his calls for the reduction of interest rates by the Fed. Fed Chairman Jerome Powell, however, described the recent weakness of US inflation as "transitory".

Market watchers will also keep an eye on trade talks between the United States and China, hoping that an agreement ending the month of trade disputes between Washington and Beijing is drawing closer.

The dollar was below a basket of currencies on Friday as traders focused on the weaker aspects of the April US payroll report, ruling out stronger hiring than expected and falling unemployment rate at the lowest for over 49 years.

Sluggish monthly wage growth of 0.2% and a drop in the participation rate in employment pushed some to sell the greenback, analysts said.

"These discreet details were not a compelling reason to add to already very important positions on the long dollar," said Eric Viloria, a foreign exchange strategist at Credit Agricole in New York.

Whoever follows the greenback against a basket of six currencies was down 0.4% to 97.197 on Friday night, a weekly drop of 0.54%.

It was up 0.24% to $ 1.1222 after hitting its lowest level of the week at $ 1.115, while it was 0.35% lower at 111.09 yen.

The single currency rose 0.4% against the greenback this week, while the dollar lost 0.4% against the yen.

The dollar also came under pressure after the Institute for Supply Management reported that its services index unexpectedly dropped to its lowest level in 20 months in April.

Comments from Chicago Fed President Charles Evans and St. Louis Fed President James Bullard argue that the US central bank could lower its key rates by the end of the year. year, although Fed Chairman Jerome Powell said two days earlier that he did not see the need to raise or lower rates right now.

Evans said at an event in Stockholm that a drop in US rates might be needed in case of a downturn in the economy.

Bullard told CNBC television that the Fed's key rate is "a little tight" and that current inflation figures are extremely low.

At the same time, the US dollar closed the week down, as central banks in both countries could cut interest rates next week.

The Reserve Bank of Australia meets Tuesday and the Reserve Bank of New Zealand the next day. Everyone could cut rates because of worries about low inflation rates, analysts said.

Investing.com has listed a number of important events that could affect the markets.

Monday, May 6

EU Services, composite PMI (April)
Retail sales in the EU (March)
Chicago Fed President Evans Speaks
Harker, member of the FOMC, speaks
Williams, FOMC Member, Speaks
The ECB's speech on the agenda

Tuesday, May 7

Political meeting of the RBA
Kaplan, FOMC member, speaks
Quarles, FOMC Member, speaks
China's trade balance (April)

Wednesday, May 8

Political meeting of the RBNZ
China CPI, PPI (April)
ECB minutes on monetary policy
Germany industrial production (March)

Thursday, May 9

US PPI (April)
Fed Chairman in the United States, Mr. Powell
Initial applications for unemployment in the United States
US trade balance (March)

Friday, May 10

German Trade Balance (March)
French industrial production (March)
British GDP, industrial production, trade balance
US CPI (April)
Bostic, member of the FOMC, expresses

–Reuters contributed to this report