This week may be full of volatility for the currency market. Better watch out for these central bank announcements, CPI data, and flash PMIs. If you are thinking of taking trade on any economic event then you need to read this blog.
Major Economic Events:
U.K. CPI (July 20, 6:00 am GMT) – First up we’ve got another glimpse into U.K. inflation, which has been rising enough to keep their policymakers on edge. Another uptick in price pressures is expected for June, with the headline figure projected to advance from 9.1% to 9.3%. A stronger than expected increase would once again feed into fears of a downturn in consumer spending and ultimately a recession. This could also up the pressure on the BOE to increase borrowing costs in their next meeting.
Canada’s inflation data (July 20, 12:30 pm GMT) – With the BOC recently surprising the markets with a huge interest rate hike last week, traders are keen to find out whether or not the latest round of inflation measures could spur another aggressive tightening move.
Headline CPI likely climbed from 7.7% to 8.3% year-over-year in June while the core reading probably dipped from 6.1% to 5.9%.
BOJ monetary policy statement (July 21) – It will be the BOJ’s turn to announce their policy decision but, unlike most of its peers, the Japanese central bank will likely stand pat. BOJ officials don’t seem to be alarmed by the surge in price pressures just yet, even welcoming the sharp drop in the yen’s value as it also spurs inflation.
ECB monetary policy statement (July 21, 12:15 pm GMT) – The main event for the week will likely be the ECB decision, as the central bank is widely expected to announce its first rate hike in more than a decade. It might not be such a huge deal like the Fed’s though, since the increase is only expected to come in at a measly 0.25%. What euro traders are more keen to find out is whether this tightening move is the first of many or just a one-off thing. Many expect the ECB to outline a roadmap for its rate hikes for the rest of the year, with some even banking on a larger 0.50% hike sometime in September.
Flash PMI readings (July 22) – It’s the third week of the month, so we’ve got the flash PMI reports lined up! The top eurozone economies will get the ball rolling, with France likely printing another set of declines in its manufacturing (51.4 to 51.1) and services (53.9 to 53.1) PMIs. Germany might also report a slower pace of growth in the manufacturing (52.0 to 50.9) and services (52.4 to 51.4) industry. In the U.K., the flash manufacturing PMI likely improved from 52.8 to 53.5 to signal a faster pace of expansion while the flash services PMI probably dipped from 54.3 to 53.6.
Source : forexfactory.com
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