Forex - Weekly outlook: 06.25 - 06.29
U.S. inflation data will be in focus this week with the Federal Reserve having already flagged four interest rate hikes this year. The Fed’s preferred inflation measure; the core PCE price index is due on Friday.
The third reading on first quarter U.S. GDP is due the day before and there will also be data on durable goods orders and consumer sentiment.
The euro zone is to release a preliminary inflation estimate on Friday, while EU leaders are to hold a two-day summit in Brussels, which gets underway on Thursday.
The euro rose on Friday, buoyed by data showing that second quarter growth is likely to have been solid and by fresh assurances from Italy’s new government that the country would not leave the euro area.
The single currency received an additional boost after Greece secured debt relief and a cash infusion from the euro zone.
EUR/USD was up 0.44% to 1.1654 in late trade, for a weekly gain of 0.39%.
The gains in the euro pressured the dollar lower. The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.37% at 94.19 late Friday. For the week, the index was down 0.63%.
Despite its gains, the euro still remains vulnerable to political instability in the euro area and ongoing trade tensions.
On Friday, U.S. President Donald Trump threatened to impose a 20% tariff on car imports from the EU. Trump’s threat came after the EU imposed tariffs on a range of U.S. imports in response to steel and aluminum tariffs from the White House.
The dollar was almost unchanged against the yen late Friday, with USD/JPY at 109.96. For the week, the pair was down 0.61%.
The pound rose to one-week highs on Friday, a day after a more hawkish Bank of England revived expectations for an August rate hike, but fears over a fresh period of uncertainty in Brexit negotiations checked gains.
GBP/USD hit a high of 1.3315 before pulling back to 1.3263 in late trade.
Elsewhere, the commodity linked currencies strengthened on Friday following a modest increase in oil production by OPEC.
The Australian dollar bounced higher, with AUD/USD rising 0.92% to 0.7445, rebounding from the previous session’s 13-month lows of 0.7344.
The Canadian and New Zealand dollars were also higher, with USD/CAD down 0.35% to 1.3267 and NZD/USD advancing 0.6% to 0.6908.
Monday, June 25
The Ifo Institute is to report on German business climate.
Tuesday, June 26
The U.S. is to release data on consumer confidence.
Atlanta Fed President Raphael Bostic is due to speak at an event in Alabama.
Wednesday, June 27
New Zealand is to publish data on trade and a report on business confidence.
Bank of England Governor Mark Carney is to hold a press conference about the latest financial stability report in London.
The U.S. is to release data on durable goods orders.
Fed Governor Randal Quarles is to speak at an event in Idaho.
Bank of Canada Governor Stephen Poloz is to speak.
Thursday, June 28
The Reserve Bank of New Zealand is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
In the euro zone, Germany is to release preliminary data on inflation.
European Union leaders are to attend the first day of an economic summit in Brussels.
The U.S. is to release revised data on first quarter growth as well as the weekly report on jobless claims.
Atlanta Fed President Raphael Bostic is to speak in Atlanta.
Friday, June 29
The UK is to produce revised data on first quarter growth as well as figures on the current account and net lending.
The euro zone is to release a preliminary estimate of consumer price inflation.
EU leaders are to attend the second day of an economic summit in Brussels.
Canada is to release its monthly report on economic growth as well as data on raw material price inflation. The Bank of Canada is to publish its business outlook survey.
The U.S. is to round up the week with data on personal spending and the Fed’s preferred inflation measure, the core PCE price index, along with data on business activity in the Chicago region and revised data on consumer sentiment.