Stats out of the UK could hit the Pound, the BoC is due to deliver its policy decision with FED Chair Powell is due to give testimony to Congress.
It was a relatively busy Asian session this morning, with key stats including Australia’s consumer sentiment figures and inflation numbers out of China.
Outside of the stats, the markets were also looking ahead to FED Chair Powell’s testimony to Congress, which will be considered the main event of the week.
The Westpac Consumer Sentiment Index fell by -4.1% to 100.7 in July. The sentiment index had fallen by 0.6% in June. According to the latest Westpac report,
The Aussie Dollar moved from $0.69263 to $0.69220 upon release of the figures, which preceded inflation numbers out of China.
The annual rate of inflation held steady at 2.7% in June, which was in line with forecasts. Month-on-month consumer prices fell by 0.1%, which was also in line with forecasts. Consumer prices had increased by 0.1% in May.
In spite of the annual rate of inflation holding steady, the annual rate of wholesale inflation stalled in June, falling short of a forecasted 0.3% rise. The producer price index had increased by 0.6% in May.
The Aussie Dollar moved from $0.69229 to $0.69243 upon release of the figures. At the time of writing, the Aussie Dollar was down by 0.12% to $0.6920.
At the time of writing, the Kiwi Dollar was down by 0.2% to $0.6593, while the Japanese Yen was down by 0.06% to ¥108.91 against the U.S Dollar.
It’s a quiet day ahead on the economic calendar. With no material stats due out of the Eurozone, the focus will be on the Pound, the Loonie and the Greenback.
FED Chair Powell’s testimony to Congress later today will have a material impact on the global financial markets…
At the time of writing, the EUR was down by 0.02% to $1.1206.
It’s a particularly busy day ahead.
From the economic calendar, Industrial and manufacturing production, trade data and GDP numbers are due out.
The GDP and manufacturing production numbers will be the main area of focus. Economic indicators have raised some red flags going into the 2nd quarter. Any weak numbers and expect the Pound to take another hit. The BoE is now largely expected to cut rates later in the year, barring a miraculous turnaround on Brexit…
Outside of the numbers, the last leadership race live televised debate will also draw attention.
Boris Johnson continued to be the favorite, though the odds have narrowed…
At the time of writing, the Pound was down 0.1% to $1.2452.
It’s a big day for the Greenback. While there are no material stats due out later this afternoon, FED Chair Powell’s testimony to Congress will be of material influence.
Any talk of leaving rates unchanged near-term and positive sentiment towards the economy and expect the Dollar to rise at the expense of the global equity markets.
With the U.S – China trade negotiations back on track, Powell may take the opportunity to sit back and wait to see how things progress. Unlike other economies, the U.S economy is still ticking along and labor market conditions remain tight…
Late in the U.S session, the FOMC meeting minutes are also due out and will have some influence, though how much influence will depend on Powell’s testimony. A dovish Powell would likely make the minutes more relevant, particularly if Powell discounts last week’s NFP numbers.
At the time of writing, the Dollar Spot Index was up by 0.03% to 97.523.
It’s also a big day ahead for the Loonie. While there are no material stats due out, the Bank of Canada’s interest rate decision will influence.
Few are expecting a rate cut, which leaves the focus on the monetary policy report, rate statement and press conference that comes later in the day.
Will the BoC signal a need to cut rates in the coming months or will it be status quo?
The Loonie was flat at C$1.3128, against the U.S Dollar, at the time of writing.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.