THE US dollar strengthened early on Tuesday, with the exception of the Canadian currency before a full day of economic data, including May home price measurements and the Conference Board’s monthly consumer confidence index for June.
The weekly Redbook same-store retail sales, the May advance trade data, and the June business conditions readings from the Richmond and Dallas Federal Reserve banks are all slated on that day.
The gross domestic product growth on Wednesday, personal income and spending on Thursday, and the ISM manufacturing report on Friday before another lengthy holiday weekend are among the data highlights for the remainder of the week.
In addition to other Fed officials’ public appearances, Federal Reserve Chairman Jerome Powell’s testimony last week confirmed market expectations that the Fed will keep raising interest rates to combat inflation, with markets already pricing in an additional 75 basis point increase at the July meeting.
On Monday, the G-7 leaders’ summit in Germany will continue, and topics such as limiting the cost of imported oil are anticipated. A quick overview of Tuesday’s foreign exchange activities shows that USDEUR decreased only marginally from 1.0584 at the same time Monday morning to 1.0578 at the US closing on Monday.
According to figures released overnight, consumer confidence in France fell in June, while that in Germany set a new low in July and Italian industrial sales increased in April. The week’s key data releases will be Friday’s inflation report and Thursday’s EU unemployment report.
According to ECB President Christine Lagarde earlier on yesterday, July 21, when the European Central Bank is anticipated to start its tightening cycle, the monetary policy committee will meet. However, in order to battle inflation, the ECB would tighten monetary policy sooner if necessary.
GBPUSD decreased from 1.2266 at the US closing on Monday to 1.2247 at the same time on Monday morning. On Tuesday, no UK figures are expected to be released.
The UK’s GDP growth will be made public on Thursday. After raising interest rates by 25 basis points at its most recent meeting, the Bank of England is anticipated to continue its cycle of tightening to control inflation.
From 1.2874 at the US closing on Monday and 1.2891 at the same time on Monday morning, USDCAD decreased to 1.2826. On Tuesday, no Canadian data are expected to be released.
On Thursday, the GDP growth for Canada will be revealed. Following the 50 basis point rise in June, the markets expect the Bank of Canada to continue tightening monetary policy at its meeting on July 13.
USDJPY increased from 135.4809 at the US closing on Monday to 136.2468 at the same time on Monday morning. There are no Japanese data scheduled for Tuesday.
The Bank of Japan has reiterated that inflation that is above target is only a temporary phenomenon and that as a result, monetary policy would remain accommodating.
