Eyeing the data
Growth, inflation, and labour data ahead
The Pound has managed to regain some strength against the US Dollar, trading near three-week highs last week, on a generally upward trend since the end of June. Rishi Sunak's announcement and news of the reopening of other areas of the economy all supported the Pound. The week ahead will see a slew of highly influential economic data print across the board, which could create some market volatility. UK growth stats will be released this week, with expectations for a contraction of -20.9% in May on the year, following April's -24.5%. Additionally, this week will see sector-specific data such as construction and manufacturing figures print. Other important stats include inflation rate numbers and labour market data. Bank of England representatives will also speak throughout the week.
ECB decision ahead
The Euro reached a one-month high against the US Dollar on Thursday, but retreated on Friday as risk-off sentiment struck the market. However, the Euro currently trades around 1.0% off year-to-date highs. The safe-haven Swiss Franc also rose against the Euro last week, hitting a six-week high. In the week ahead, the ZEW Economic Sentiment Index, European Central Bank interest rate decision and follow up press conference, and Inflation Rate stats are all on the calendar and could influence the Euro exchange rate.
A surge in cases
A surge in coronavirus cases in the US last week caused safe-havens to gain some popularity, but the US Dollar has been trading near it's lower levels of it's 2020 range. The US Dollar has been sofer against a basket of majors today ahead of a host of data this week. In terms of the economic calendar, inflation rate stats will be out on Tuesday, followed by Retail Sales later in the week. The recent rise in coronavirus cases is expected to dent the sales number, with forecasts for around 5.0% in June, down from 17.7% in May. Investors will be closely eying the data given that some states have been re-entering lockdown.
AUD and NZD
Heavy data week ahead
The Aussie Dollar had reached a one-month high versus the US Dollar on Thursday, but gave up gains on Friday as coronavirus figures from Florida reached markets. The New Zealand Dollar has surged by around 15% versus the US Dollar in the last four months since reaching lows in March. However, some economists are questioning if the upward trend could be coming to an end. Comments from US President Donald Trump discussing a phase two trade deal with China weighed on both the Aussie and Kiwi Dollars recently.
In the week ahead, Westpac will release its July Australian Consumer Confidence Index which could impact the Aussie, followed by Employment Change and Unemployment Rate data later in the week. Meanwhile, the New Zealand Dollar could also fluctuate on data, with the nation's Q2 Inflation Rate stat, as well as indexes from the manufacturing and services sectors all scheduled for release.
Last week, the Canadian economy showed 952.9K jobs were added in June, far exceeding the 700K forecast and the previous month's 289.6K. The Unemployment Rate also decreased from 13.7% to 12.3%. The Loonie was relatively muted in its reaction, but managed to distance itself from 10-day lows earlier in the session. Also supporting the Canadian Dollar was an increase in oil prices. This week, the Bank of Canada will announce its latest interest rate decision; economists expect the central bank to maintain rates at 0.25%. The Canadian Dollar has held within a tight range against the US Dollar this month; however, stronger jobs growth figures might influence how central bankers handle the monetary policy report released alongside the interest rate announcement.