U.S. Dollar quiet as curiosity over Fed builds

Indeed, markets are looking forward to guidance, or lack of it, as the new head of the Fed, Kevin Warsh, looks to do things a bit different. Questions will come, but we will monitor his responses, which could be short, to the point, or delegated to the newly create task forces. Analysts in recent weeks have taken into account that there is a bit of a deflationary trend that could make the argument for not hiking for what is left of the year. If there is an air of “dovishness,” it could play out poorly for the Dollar and cost it some value.

While today the focus will be on officials and their thinking when it comes to inflation and economic growth, actual figures will be out tomorrow. A deluge of data points are scheduled for release including June’s Personal Income & Spending, Personal Consumption Expenditures, which is favored by the Fed in gauging price growth, and the Gross Domestic Product registered for Q2. On Friday, we will close the week with the University of Michigan Consumer Sentiment for July.

What to Watch This Week…

• Euro-zone GDP, Thursday
• Euro-zone CPI, Friday
• BOE Meeting Thursday
• BOJ Meeting Friday
• Monex USA Online is always open

The complete Economic Calendar can be found here.

EUR

The Euro remains quiet like most peers as traders and investors look out for the Fed announcement along with earnings reports from the world giant tech firms. Meta Platforms Inc. and Microsoft Corp., which represent a tremendous amount in artificial spending will be revealing their performance. In contrast, European stock exchanges are not characterized by enthusiasm with the Euro Stoxx 50 down by over 2.0% thus far for the month. Tomorrow will also be crucial in evaluating the euro-zone’s overall confidence as we get July survey results along with GDP and Unemployment. To end the week, Consumer Price Index, Producers Price Index, and S&P Global Purchasing Managers Index. There shall be some volatility.

GBP

Pound Sterling lost ground after reaching its strongest level since mid-May two weeks ago. July has turned out quite eventful for the United Kingdom as a change of the guard took place, marking its sixth Prime Minister since the Brexit vote took place a decade ago. The Fed’s central bank action will be followed tomorrow by the Bank of England, which is expected to maintain policy, but could give hints about needing to hike later as inflationary pressures on the other side of the pond have exacerbated from Middle East problems affecting trade. At the moment, there is a 55.0% chance of another hike by BOE for what remains of the year, let us see if tomorrow the tone causes adjustment.