Review of the main events of the Forex economic calendar for the next trading week (19.07.2021 – 25.07.2021)
Trading on key Forex news: next week we expect the publication of important macro statistics from Germany, Australia, the US, Eurozone, the UK, Canada, as well as the results of the meetings of the central banks of China and the Eurozone on monetary policy issues.
The dollar continues to strengthen little by little despite the efforts of the head of the Fed Jerome Powell. Speaking in Congress Wednesday and Thursday, he said the central bank will not rush to cut monthly asset purchases and that the economy is “still far” from the Fed’s targets. Nevertheless, Powell acknowledged that inflation is growing faster than expected, and if it goes beyond the acceptable limits, monetary policy will have to be tightened ahead of schedule.
He said that the recent rise in consumer prices has pushed inflation out of the short-term target zone “slightly” above 2%, and this is “a shock to the system …”. “Of course we are not happy with this,” Powell said, noting that Fed officials are closely monitoring inflation expectations to see if they need to reconsider their position.
Worries about how long inflation will last, how it will affect future earnings and the stock market, given the growing likelihood that the Federal Reserve may begin phasing out stimulus policies ahead of schedule, and worries about the spread of the coronavirus worsen investor sentiment and support the US dollar. The DXY dollar index closed last week with a gain of +0.57%, and the potential for its further growth remains. It is increasingly difficult for Fed leaders to contain the strengthening of the dollar against the backdrop of rising inflation, which has shown record growth rates over the past 29 years. Sooner or later, they will have to start curtailing the stimulating policy.
Next week, financial market participants will pay attention to the publication of important macro statistics from Germany, Australia, the US, the Eurozone, the UK, Canada, as well as the results of the meetings of the central banks of China and the Eurozone on monetary policy issues.
*during the coming week, new events may be added to the calendar and / or some scheduled events may be canceled
Monday, July 19
No important macro statistics planned to be released.
Tuesday, July 20
01:30 CNY The People’s Bank of China interest rate decision
Since May 2012, the People’s Bank of China has been steadily cutting interest rates in support of Chinese manufacturers. The last time the bank lowered the rate in April 2020 (by 0.20% to 3.85% at the moment).
In 2020, in the context of international trade conflicts and a slowdown in the global economy, the world’s largest central banks took the path of easing their monetary policies in order to support national economies and increase the competitiveness of goods exported from these countries.
The People’s Bank of China is also in line with this process. The depreciation of the yuan has become especially relevant in the last 2 years, when the confrontation between the two most powerful economies in the world began. One of the measures to mitigate the negative consequences of increased duties on the import of Chinese goods into the United States was the depreciation of the national currency of China. This measure was intended, among other things, to maintain the same volumes of imports of Chinese products to the United States, which would cost American buyers less due to the difference in the rates of the national currencies of the…