This week market outlook promises to be pivotal for forex traders as we closely monitor key economic indicators and central bank communications. From the Fed’s critical speeches to the UK’s latest inflation data and the ECB’s anticipated rate pause, each event could significantly impact currency fluctuations and trading strategies.
Market Outlook: Monday’s Market Movers
China’s Economic Performance
China’s GDP for April-June grew by 4.7%, missing the analysts’ forecast of 5.1%, and marking its slowest growth since the first quarter of 2023. Industrial Production y/y also showed signs of deceleration. Given Australia’s strong trade ties with China, these figures are crucial for traders in AUD, potentially signaling slower demand for Australian exports.
US Empire State Manufacturing Index
The July Empire State Manufacturing Survey revealed a modest decline in manufacturing activity in New York State, with the general business conditions index barely changed at -6.6. New orders were steady, and shipments saw a slight increase. While respondents remained optimistic about future business conditions, weak labor market conditions and sluggish capital spending plans suggest caution. These mixed signals could influence the USD, especially as Fed Chair Powell prepares to address the nation on interest rates later monday.
Tuesday’s Key Indicators
Canada’s Inflation Figures
Canada’s latest inflation data will likely impact the CAD. Traders should watch closely for any signals that could indicate shifts in monetary policy.
US Retail Sales
June 2024’s retail sales figures for the USA will be released, potentially affecting the USD. Strong retail sales might support the dollar, reflecting consumer confidence and spending power.
Wednesday’s Crucial Data Points
New Zealand and UK Inflation Figures
New Zealand’s inflation figures will be keenly observed for any potential impact on the NZD. Meanwhile, the UK’s inflation data is expected to draw significant attention. With strong UK GDP data and softer US inflation propelling the Pound last week, traders will be looking for continued momentum in GBP.
US Building Permits and Industrial Production
In the US, Building Permits and Industrial Production m/m reports will be released. These indicators provide insights into future construction activity and overall industrial health, potentially influencing the USD.
Thursday’s Economic Highlights
Australia’s Employment Reports
Australia’s employment and unemployment reports are set to impact the AUD. Strong employment figures could boost trader confidence in the currency.
UK’s Labor Market Data
Britain’s Claimant Count Change, Average Earnings Index 3m/y, and Unemployment Rate will all be in the spotlight. These figures can significantly influence GBP, painting a picture of the UK’s economic health.
ECB Monetary Policy Statement
The European Central Bank (ECB) is expected to leave interest rates unchanged on Thursday. This pause follows June’s cut, where the deposit rate was reduced from a record four percent to 3.75 percent. ECB President Christine Lagarde emphasized that while the cut was due to falling consumer prices, it does not signal a rapid rate-cutting cycle. The ECB’s decision will likely impact the EUR and associated pairs.
US Philly Fed Manufacturing Index
The Philly Fed Manufacturing Index will also be released, providing further insights into the economic health of the manufacturing sector in the US and potentially impacting the USD.
Friday’s Market Enders
UK’s Retail Sales
The UK’s Retail Sales m/m report can affect the GBP, giving insights into consumer spending and economic resilience.
Canada’s Retail Sales
Similarly, Canada’s Retail Sales m/m report will be influential for the CAD, highlighting consumer behavior and economic health in Canada.
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