The dollar began a recovery thanks to risk aversion that could continue at the beginning of the last week of June and the second quarter. Inflation data from the United States, the Eurozone, Australia and Canada will be closely monitored. In addition, the markets will listen to the heads of central banks who will speak at the ECB Forum.
Here’s what you need to know for next week:
In the US, next week’s key report will be Friday’s Core Personal Consumption Expenditure (PCE). Core PCE is expected to register an increase of 0.4% in May, with the annual rate holding at 4.7%. In addition, data on personal spending and income will be published. Thursday’s GDP data is an update and could be ignored by market participants. The requests for unemployment benefits will offer new clues about the labor market.
It will be a busy week for Canada that will mark the expectations of the Bank of Canada. The Consumer Price Index for May will be released on Tuesday, and the annual rate is expected to drop from 4.4% to 3.4%. April GDP and BOC business outlook surveys will be released on Friday.
NBF Analysts:
In Canada, a slight decline in gasoline prices, coupled with further moderation in the grocery segment, could have translated into a 0.3% rise in the Consumer Price Index in May (before seasonally adjusted). If we are correct, the 12-month inflation rate should drop from 4.4% to a two-year low of 3.2%. The basic measures preferred by the Bank of Canada should also decline.
In the euro zone, inflation data will be the protagonists. Germany will report on Thursday and the euro zone on Friday. The annual rate of the basic harmonized CPI for the euro zone is expected to fall from 6.1% to 5.5%.
The European Central Bank (ECB) will hold its annual Forum on Central Banking, which will start on Monday. The closing panel on Wednesday will feature Lagarde of the European Central Bank, Bailey of the Bank of England, Powell of the Federal Reserve, and Ueda of the Bank of Japan. Many other central bankers will also take part.
In China, the PMIs from the National Bureau of Statistics will be released on Friday, which could show a further slowdown. In line with the global trend, the manufacturing sector is expected to continue to contract, and the service sector to slow down, but remain above 50.
In Australia, the May Consumer Price Index, due to be released on Wednesday, will be critical for the Reserve Bank of Australia (RBA). The headline annual index is expected to show a sharp drop from 6.8% to around 6.0%. Retail sales will be released on Thursday.
TD Securities Analysts:
The notable drop in gasoline prices will contribute to the drop in the CPI for May, while leisure prices could fall after the Easter holidays. Given a red-hot labor market and the increasingly tough message from the RBA on inflation, we think it makes sense to apply another 25 basis points at the July meeting, as monthly inflation data remains well above target. RBA inflation target.
The Index of Dollar ended the week higher after rising through Thursday and Friday on risk aversion and also supported by Fed Powell’s comments on more rate hikes. The DXY bounced from monthly lows towards 103.00.
the yen The Japanese resumed the bearish trend, as no change in stance was observed from the Bank of Japan, which widened the monetary divergence with respect to other central banks. He USD/JPY it jumped to monthly highs on Friday approaching 144.00. EUR/JPY topped 156.00 and GBP/JPY topped 182.00, reaching their highest levels since 2008 and 2015, respectively.
GBP/USD did not benefit from the Bank of England rate hike amid concerns over the UK’s economic outlook. The pair pulled back from monthly highs, finding support around 1.2700.
EUR/USD was rejected above 1.1000 and fell below 1.0900. The latest push to the downside came on Friday, after the Eurozone PMI indices came in weaker than expected.
Commodities fell during the week and weighed on Antipodean currencies. Silver lost more than 7% and Gold 2%. The Australian dollar was one of the worst performing currencies of the week.
The AUD/USD pair suffered the worst weekly drop so far this year, down almost 3%, ending below 0.6700 and returning below the 20-week SMA. NZD/USD ended a three-week positive streak down 1.5%, closing around 0.6150. The Canadian Dollar fared better, and USD/CAD closed the week slightly lower, near 1.3200, the lowest weekly close since September 2022.
The worst unemployed was the Turkish lira, unable to benefit from the turnaround of the Central Bank of the Republic of Turkey by sharply raising interest rates. The USD/TRY pair reached fresh all-time highs above 25.00 and ended the week up 6.5%.
Did you like this article? Help us with your comments by answering this survey:
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
