Forex Market Outlook For The Week July 08 – 12, 2019

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On the last trading day of the first week of July, the US dollar gained ground against most major world currencies as the economic data reported were better than analysts expected. Having said that here is an outlook on the key releases from around the world scheduled for the upcoming week:

#1: U.S. Fed Chair Jerome Powell Speaks (07/09/2019 Tuesday 12:45 GMT)

Jerome Powell, Federal Reserve Chair, is scheduled to deliver opening remarks at an event that is being hosted by Boston Federal Reserve Bank. Audience questions expected. Markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates.

#2: U.K. GDP (07/10/2019 Wednesday 08:30 GMT)

forex market outlookThe UK economy reported its weakest month-on-month growth figures in as many as three years in April as the Brexit hangover hit demand. GDP shrank 0.4 percent, worse than analysts expected, and dragged the quarterly growth figure down to 0.3 percent.

GDP declined because of a 3.9 percent contraction across the manufacturing sector. This was the worst decline ever since 2002 as carmakers implemented planned shutdowns in anticipation of Britain going out of the European Union towards the end of March. Car manufacturing plunged 24 percent, while transport output experienced the biggest monthly drop since 1974. Forecast for May 2019: a 0.3 percent expansion is expected

#3: U.K. Manufacturing Production (07/10/2019 Wednesday 08:30 GMT)

In the U.K., manufacturing production posted its largest fall ever since June 2002 of 3.9 percent after recording an increase of 0.9 percent in the prior month. The fall was led by a 13.4 percent reduction in the production of transport equipment. This is the biggest fall in transport equipment production ever since January 1974. Within the manufacturing subsector, trailers and semi-trailers and motor vehicles production plunged by a record 24 percent because of the impact of planned shutdowns. Forecast for May 2019: an increase of 2.2 percent is on the cards

#4: Canada BoC Monetary Policy Report (07/10/2019 Wednesday 14:00 GMT)

Released on a quarterly basis, the Monetary Policy Report provides great insight into the Bank of Canada’s views with respect to inflation and economic conditions. These are the key factors that decide the monetary policy and impact interest rate decisions. The Governor of the central bank holds a press conference approximately 75 minutes after the release to discuss the details as regards the contents of the report.

#5: Canada BoC Rate Statement (07/10/2019 Wednesday 14:00 GMT)

The Bank of Canada releases the Rate Statement 8 times in a year. The central bank uses it a tool to communicate with investors as regards the monetary policy. It provides the outcome of the members’ decision on setting interest rates and offers a commentary on the economic conditions that impacted their decision. More importantly, it provides an economic outlook and clues on future decisions.

#6: Canada BoC Overnight Rate (07/10/2019 Wednesday 14:00 GMT)

In the meeting held in May, the members of the Monetary Policy Committee of the Bank of Canada decided to leave the Overnight Rate unchanged at the 1.75 percent level as was widely expected by the analysts. This is the highest interest rate level ever since December 2008. According to policymakers, the current level of monetary policy accommodation remained appropriate and decisions in the future are data dependent. The Committee also noted that the developments will be monitored in areas such as oil markets, household spending, and the trade environment globally. The deposit and Bank rates were also left steady at 1.50 percent and 2.0 percent, respectively. Forecast for July 2019: 1.75 percent

#7: U.S. Fed Chair Jerome Powell Testifies (07/10/2019 Wednesday 14:00 GMT)

Jerome Powell, Federal Reserve Chair, is scheduled to testify before the House Financial Services Committee on the Semiannual Monetary Policy Report in Washington DC. There are two parts to the testimony. In first the first part he reads a prepared statement. This will be followed by a question and answer session. As the questions can lead to unscripted answers, markets might witness heavy volatility.

#8: Canada BoC Press Conference (07/10/2019 Wednesday 14:15 GMT)

The Governor and the Senior Deputy Governor of the Bank of Canada hold a press conference after the release of the Monetary Policy Report. There are two parts to the press conference. In the first part, they read prepared statements. This is followed by questions from the press. As the questions frequently lead to unscripted answers, heavy market volatility can be expected.

The press conference is one of the primary methods employed by the Bank of Canada to communicate with investors as regards the monetary policy. In addition to covering the factors that impacted the Committee’s decision in the most recent meeting for deciding the interest rate, it provides in-depth information about inflation and the overall economic outlook. More importantly, it offers clues on monetary policy decisions in the future.

#9: U.S. FOMC Meeting Minutes (07/10/2019 Wednesday 18:00 GMT)

The U.S. FOMC releases the Minutes of the Meeting held for setting interest rates 8 times in a year. It provides a detailed account of the most recent meeting of the FOMC. In addition, it provides in-depth insights into the financial and economic conditions that impacted their decision on setting interest rates.

#10: U.S. CPI and Core CPI (07/11/2019 Thursday 12:30 GMT)

In the U.S., consumer prices rose by 0.1 percent on a month-on-month basis in May, easing from the 0.3 percent gain in the prior month. The reading for the month matched with analysts’ expectations. While the food index increased by 0.3 percent, the energy index declined by 0.6 percent.

The core CPI, which excludes food and energy prices, rose by 0.1 percent for the fourth month in a row as the indexes for shelter, airline fares, education, medical care, household furnishings, and new vehicles edged upward.

Forecast for June 2019: While the CPI is expected to remain steady, the core CPI is expected to increase by 0.2 percent

#11: U.S. Fed Chair Jerome Powell Testifies (07/11/2019 Thursday 14:00 GMT)

Jerome Powell, Federal Reserve Chair, is scheduled to testify before the Senate Banking Committee on the Semiannual Monetary Policy Report in Washington DC. There are two parts to the testimony. In first the first part he reads a prepared statement. This will be followed by a question and answer session. As the questions can lead to unscripted answers, markets might witness heavy volatility.

#12: U.S. PPI (07/12/2019 Wednesday 14:15 GMT)

In the U.S., producer prices for final demand goods edged up by 0.1 percent on a month-on-month basis in May, following an increase of 0.2 percent in the previous month. An increase in the cost of services was partially offset by the decline in food and energy prices. Excluding energy and food, producer prices rose 0.2 percent, following the 0.1 percent increase in the prior month. On a year-on-year basis, the PPI rose by 1.8 percent, slowing down from the previous month’s 2.2 percent increase. The core index rose by 2.3 percent, which was slightly below the prior month’s 2.4 percent increase.

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