Forecasting the upcoming week: Fed, BoE and BoJ decisions take center stage
The upcoming week will be dominated by monetary policy decisions from the Federal Reserve (Fed), Bank of England (BoE) and Bank of Japan (BoJ). United States (US) Gross Domestic Product (GDP) and Personal Consumption Expenditures (PCE) inflation, Australian inflation and preliminary Eurozone growth and inflation figures will also attract significant attention.
The US Dollar Index (DXY) trades near 101.50 ahead of a particularly busy United States (US) economic calendar. Monday’s Durable Goods Orders are expected to rebound by 1.6% in June after falling 4.5% previously, while orders excluding transportation are forecast to rise 0.9%.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.04% | -0.07% | -0.02% | 0.09% | -0.19% | -0.29% | 0.21% | |
| EUR | -0.04% | -0.15% | -0.09% | 0.02% | -0.29% | -0.40% | 0.12% | |
| GBP | 0.07% | 0.15% | 0.09% | 0.16% | -0.13% | -0.21% | 0.27% | |
| JPY | 0.02% | 0.09% | -0.09% | 0.11% | -0.20% | -0.29% | 0.19% | |
| CAD | -0.09% | -0.02% | -0.16% | -0.11% | -0.30% | -0.41% | 0.10% | |
| AUD | 0.19% | 0.29% | 0.13% | 0.20% | 0.30% | -0.09% | 0.38% | |
| NZD | 0.29% | 0.40% | 0.21% | 0.29% | 0.41% | 0.09% | 0.49% | |
| CHF | -0.21% | -0.12% | -0.27% | -0.19% | -0.10% | -0.38% | -0.49% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Tuesday’s calendar includes Consumer Confidence and the ADP Employment Change four-week average, which eased to 16.5K previously. However, Wednesday’s Federal Reserve decision will be the main event for the Greenback.
The Fed is widely expected to leave its target range unchanged at 3.50%–3.75%. This will be a lighter meeting without a Summary of Economic Projections (aka the updated dot plot), leaving the monetary policy statement and Fed Chair Kevin Warsh’s press conference as the main sources of guidance. The Fed’s official calendar confirms that the July 28–29 gathering is not one of the meetings associated with updated economic projections.
The Fed decision will be followed by a major batch of US releases on Thursday. Preliminary second-quarter GDP is expected to show annualized growth of 2.3%, up from 2.1%, while monthly Core PCE inflation is forecast to slow to 0.1% from 0.3%. Initial Jobless Claims are expected to rise to 206K from 187K.
Headline PCE inflation previously stood at 4.1% YoY, while the Core PCE Price Index was at 3.4%. Stronger growth or persistent inflation could support the Fed’s restrictive stance, while softer price pressures may reduce expectations of additional tightening.
EUR/USD trades lower near 1.1370 despite encouraging July business-activity figures from Germany and the wider Eurozone. The Euro will face a busy domestic calendar, beginning with Monday’s German IFO surveys. The Business Climate Index is expected to improve to 86.1 from 85.6, while the EcoFin meeting and Bundesbank Monthly Report will also be monitored.
German inflation figures will also be released on Thursday, followed by broader Eurozone inflation data on Friday. Eurozone headline Harmonized Index of Consumer Prices inflation is expected to rise to 2.9% YoY from 2.8%, while the core rate is forecast to remain at 2.4%. Eurostat has scheduled the next Eurozone flash inflation estimate for July 31.
Stronger growth and inflation figures could support the Euro by reducing expectations of additional European Central Bank (ECB) easing. However, EUR/USD will also remain highly sensitive to the Fed decision and the direction of the US Dollar.
GBP/USD trades slightly higher near 1.3325 as investors prepare for Thursday’s BoE monetary policy announcement. The central bank is expected to keep the Bank Rate unchanged at 3.75%, following the previous 7–2 vote in favor of holding rates.
The decision will be accompanied by the Meeting Minutes, Monetary Policy Summary and quarterly Monetary Policy Report. BoE Governor Andrew Bailey will speak following the announcement. The BoE confirms that the July 30 meeting will include both the policy decision and updated economic projections.
USD/JPY holds near 163.80 ahead of a busy Japanese calendar and next Friday’s BoJ decision. Tokyo inflation will be released late Thursday, with CPI Excluding Fresh Food expected to rise 1.8% YoY from 1.6%. The Unemployment Rate is forecast to remain at 2.5%, while Retail Trade growth is expected to slow to 2.8% from 5.3%.
The BoJ is expected to maintain its policy rate at 1.00%. The monetary policy statement will be accompanied by the quarterly Outlook Report and followed by the Bank’s press conference. The BoJ calendar confirms that the meeting will take place on July 30 and 31, with the decision and Outlook Report scheduled for Friday.
AUD/USD trades higher near 0.6980 ahead of several important Australian releases. RBA Governor Michele Bullock will speak on Tuesday, before June inflation figures are published on Wednesday. Monthly headline CPI is expected to increase 0.3% after falling 0.7% in May. Annual inflation previously stood at 4.0%, while the Trimmed Mean CPI was at 3.6% YoY. The underlying monthly measure is forecast to rise another 0.4%. The Australian Bureau of Statistics has scheduled the June CPI report for July 29.
China’s official PMIs will also be important for the China-sensitive Australian Dollar. Manufacturing PMI is expected to fall to 49.9 from 50.3, signaling a return to contraction, while Non-Manufacturing PMI is forecast to ease to 50.0 from 50.2.
West Texas Intermediate (WTI) Oil trades lower near $89.20 per barrel after falling sharply on reports that Pakistan and Iran are exploring a path towards renewed US-Iran negotiations under a diplomatic push initiated by China. However, sources cautioned that substantial obstacles remain before negotiations can resume, leaving crude prices vulnerable to further geopolitical volatility.
Gold advances near $4,065 as investors prepare for a central-bank-heavy week. The precious metal will be particularly sensitive to the Fed’s policy language, US inflation figures and Treasury yields. A hawkish message from Warsh could weigh on Gold, while softer PCE inflation or renewed geopolitical uncertainty may support demand for the non-yielding asset.
Anticipating economic perspectives: Voices on the horizon
Tuesday, July 28:
- RBA Governor Michele Bullock
Thursday, July 30:
- BoE Governor Bailey
Central banks meetings and upcoming data releases
Wednesday, July 29:
The Federal Reserve is expected to maintain its target range at 3.50%–3.75%. The meeting will not include updated projections or a dot plot, placing the focus on the statement and Chair Kevin Warsh’s press conference.
Thursday, July 30:
The Bank of England is expected to leave the Bank Rate unchanged at 3.75%. The decision will be accompanied by the Meeting Minutes and Monetary Policy Report.
Friday, July 31:
The Bank of Japan is expected to keep its policy rate at 1.00%. The central bank will also release its monetary policy statement and quarterly Outlook Report.
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