Currency

The Week Ahead – Economic Data, Monetary Policy, and COVID-19 in Focus

On the Macro

It’s quieter week ahead on the economic calendar, with 43 stats in focus in the week ending 9th July. In the week prior, 58 stats had also been in focus.

For the Dollar:

ISM Non-Manufacturing PMI numbers for June will be in focus on Tuesday. Following Monday’s U.S holiday, expect plenty of interest in the numbers.

JOLT’s job openings on Wednesday will also draw interest ahead of weekly jobless claims on Thursday.

A fall in initial jobless claims to sub-300k levels would deliver a boost for the Greenback.

On the monetary policy front, the FOMC meeting minutes and FOMC member chatter will also influence. The minutes are due out on Wednesday.

In the week, the Dollar ended the week rose by 0.41% to 92.226.

For the EUR:

It’s a relatively busy week on the economic calendar.

Service PMIs for Italy and Spain are due out on Monday. Finalized PMIs for France, Germany, and the Eurozone are also due out.

Barring marked revisions, expect Italy and the Eurozone’s PMIs to have the greatest impact.

The focus will then shift to German factory orders, Eurozone retail sales, and economic sentiment figures on Tuesday.

Expect German factory orders and Germany’s ZEW Economic Sentiment index to have the greatest impact.

On Wednesday German industrial production figures will be in focus ahead of German trade data on Thursday.

From the ECB, ECB President Lagarde is scheduled to speak on Monday ahead of the ECB minutes on Thursday. ECB President Lagarde is also due to speak on Friday.

The EUR ended the week down by 0.59% to $1.1865.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

Finalized service and composite PMIs are due out on Monday. Expect any downward revisions to test support for the Pound.

The focus will then shift to industrial and manufacturing production and trade data due out on Friday.

Away from the calendar, COVID-19 news updates will remain a key area of interest.

The Pound ended the week down by 0.40% to $1.3824.

For the Loonie:

It’s a relatively quiet week ahead on the economic calendar.

IVEY PMI numbers for June are due out on Wednesday ahead of employment change figures on Friday.

With little else for the markets to consider, both sets of numbers will influence.

Crude oil inventories and market risk sentiment will also provide direction. A wider spread of the Delta strain of the coronavirus could test support for the Loonie in the week.

The Loonie ended the week down 0.24% to C$1.2322 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s also a relatively quiet week ahead.

Economic data is limited to retail sales figures on Monday. While the numbers are key, the RBA monetary policy decision will be the main event of the week.

With the markets expecting the RBA to stand pat on policy, the Rate Statement will be the key driver.

The Aussie Dollar ended the week down by 0.84% to $0.7526.

For the Kiwi Dollar:

It’s a particularly quiet week ahead.

NZIER Business confidence figures for the 2nd quarter will be in focus on Tuesday.

With little else for the markets to consider, expect plenty of influence from the numbers. A continued pickup in business investment remains key to support a sustainable economic recovery.

The Kiwi Dollar ended the week down by 0.66% to $0.7026.

For the Japanese Yen:

Finalized service PMI figures on Monday and household spending figures on Tuesday are the key stats of the week.

We don’t expect the numbers to have a material impact on the Japanese Yen, however. Monetary policy divergence from the FED remains a negative for the Yen near-term.

The Japanese Yen fell by 0.27% to ¥111.05 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead, June’s Caixin Services PMI will draw interest on Monday.

With service sector activity now also a key component of the Chinese economy, weak numbers would weigh on riskier assets.

At the end of the week, inflation figures will also influence. Central banks are expecting the latest spike in inflation to be transitory. Another pickup in inflationary pressure could test the theory…

The Chinese Yuan ended the week down by 0.26% to CNY6.4730 against the U.S Dollar.

Geo-Politics

Russia and China continue to be the main areas of interest for the markets. On the Iran nuclear agreement, updates on talks with Iran will also need monitoring.