Forex - Weekly outlook: 07.09 - 07.13
This week’s U.S. inflation data will be closely watched, while a Bank of Canada policy meeting and a look at UK monthly economic growth will also be in focus.
On Thursday, U.S. inflation data is expected to point to a 2.9% annual increase in the consumer price index, which could underpin the Federal Reserve’s case for a gradual pace of rate hikes this year.
The BoC is widely expected to hike interest rates by a quarter point following its meeting on Thursday, bringing rates to 1.5%, but heightened uncertainty over U.S. trade policy mean that the bank could still decide to hold fire.
On Tuesday, market watchers will get a first look at figures on UK monthly growth that could bolster expectations for a rate hike by the Bank of England in August.
Trade developments will also be in the spotlight after new U.S.-China trade tariffs came into effect on Friday.
The dollar slid lower against a currency basket on Friday after data showing that while the U.S. economy created more jobs than expected in June, wage growth rose at a slower than expected pace and the unemployment rate ticked higher.
The Department of Labor said nonfarm payrolls increased by 213,000 last month, while wage growth remained moderate and the unemployment rate ticked up to 4% from an 18-year low of 3.8% in May.
Sluggish wage growth figures slightly dimmed expectations for a fourth rate hike by the Federal Reserve this year.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.39% to 93.76 late Friday. For the week, the dollar was down 0.61%.
The dollar had already come under pressure earlier in the day after the U.S. and China imposed tariffs on each other’s imports, escalating a trade spat that many investors fear will hit global growth.
The dollar was lower against the safe haven yen, with USD/JPY losing 0.17% to trade at 110.46.
The euro gained ground, with EUR/USD rising 0.47% to 1.1744, while the pound also pushed higher, with GBP/USD up 0.48% to 1.3286 in late trade.
Monday, July 9
Bank of Japan Governor Haruhiko Kuroda is to speak at an event in Tokyo.
Bank of England Deputy Governor Ben Broadbent is to speak at an event in London.
European Central Bank President Mario Draghi is to testify about the economy, monetary policy, and virtual currencies before the European Parliament in Brussels.
Tuesday, July 10
Australia is to release data on business confidence.
China is to report on consumer price inflation.
The UK is to release monthly data on economic growth, along with figures on manufacturing production and trade.
The ZEW Institute is to report on German economic sentiment.
Canada is due to release data on building permits.
Wednesday, July 11
ECB head Mario Draghi is to speak at the opening of the bank’s statistics conference in Frankfurt.
The U.S. is to release data on producer price inflation.
The Bank of Canada is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision. The announcement is to be followed by a press conference.
BoE Governor Mark Carney is to speak at an event in Boston.
New York Fed President John Williams is to speak at an event in Brooklyn.
Thursday, July 12
The ECB is to publish the minutes of its latest monetary policy meeting.
Canada is to report on new house price inflation.
The U.S. is to release data on consumer price inflation and jobless claims.
Friday, July 13
China is to publish trade data.
The U.S. is to round up the week with preliminary data on consumer sentiment.