A pretty busy week for the dollar, which will see a bunch of Fed members’ speeches AND a much-awaited meeting between Trump and Xi.
Here are catalysts that might cause a wiggle or two among the major dollar pairs!
Fed members’ speeches
Tomorrow Fed bigwigs such as John Williams (June 25, 1:45 pm GMT), James Bullard (June 25, 11:45 pm GMT), and Chairman Powell himself (June 25, 6:00 pm GMT) will give speeches throughout the day.
Will Fed members inspire more traders to price in rate cuts as early as this year? We know that Williams prefers to “keep being data dependent” for now, and that Bullard supports a rate cut as “insurance against further declines in expected inflation and a slowing economy.”
Meanwhile, Powell might talk more about the “uncertainties” and “cross currents” that he and his team are watching when he gives his speech in New York.
If he shares enough dovish sentiments, then you can bet that more market geeks will assume that he’s one of those who penciled in rate cuts in the Fed’s last meeting.
It might not be NFP or FOMC week, but there are plenty of economic reports to inspire volatility over the next couple of days!
First up are the CB consumer confidence and new home sales (June 25, 3:00 pm GMT) releases due tomorrow. Note that they’re also around the Fed members’ speeches, so their impact on the dollar might be muted.
The core durable goods orders (June 26, 1:30 pm GMT), which hints at long-term business spending patterns, is expected to grow by 0.2% after stagnating in April.
Analysts also see pending home sales (June 27, 3:00 pm GMT) improve by 1.0% in May after dropping by 1.5% in April.
The core PCE price index (June 28, 1:30 pm GMT), which is closely watched by the Fed for consumer price patterns, is expected to maintain its 0.2% monthly reading and 1.6% annualized figure in May.
Last but not the least is the Chicago PMI (June 28, 2:45 pm GMT), which could slip from 54.2 to 54.0 in June.
U.S.’ foreign policies
Another week, another chance for Uncle Sam to flex its power against its major partners?
The biggest story could come from the much awaited “extended meeting” between Trump and Xi Jinping in the G20 summit in Osaka later this week.
Market bulls are crossing their fingers for a de-escalation of the tariff war between the world’s second largest economies. And if the Sake is good enough, we might even see the beginnings of a legit trade deal after the meeting.
Aside from the direct impact of higher tariffs between the U.S. and China (which then spills over to their other trading partners), major central bankers such as the Fed, ECB, BOE, RBA, BOC, and RBNZ will also look to the meeting for monetary policymaking cues.
Meanwhile, the U.S. is set to announce new major sanctions on Iran after Trump aborted a military strike last week. The increased economic pressure aims to tempt Iran into negotiations over its oil exports, uranium enrichment plans, and other regional campaigns.
Will the pressure stop at economic sanctions this week? Or will we see more strikes and escalation of hostilities from either side?
Missed last week’s price action? Read USD’s price recap for June 17 – 21!