While the risk-linked galaxy gathered fresh oxygen in the first half of the week, the hawkish hold by the Federal Reserve and rising political concerns in the old continent eventually hurt the risk complex and propelled the Greenback to fresh tops towards the end of the week.
The US Dollar added to the post-FOMC optimism and reclaimed the 105.00 barrier and above, despite US yields trading mostly on the defensive throughout the week. The New York Empire State Manufacturing Index is due on June 17, while Retail Sales, Industrial Production, Business Inventories and TIC Flows will be published on June 18. The NAHB Housing Market Index is expected on June 19, followed by Building Permits, Housing Starts, weekly Mortgage Applications, Initial Jobless Claims and the Philly Fed Manufacturing Index, all due on June 20. On June 21, there will be the flash Services and Manufacturing PMIs, Existing Home Sales, and the CB Leading Index.
EUR/USD could not sustain the post-US CPI jump to as high as the 1.0850 region and eventually succumbed to the sharp bounce in the US Dollar, dragging spot nearly 2 cents from those tops to Friday’s lows. The final Inflation Rate in the euro area, and the ZEW’s Economic Sentiment in both Germany and the euro bloc will be unveiled on June 18. The advanced Consumer Confidence gauge in the euro zone is expected on June 20, while preliminary Manufacturing and Services PMIs are expected on June 21.
Despite advancing to three-month highs north of 1.2800 the figure, GBP/USD could not sustain that move, breaking below the 1.2700 support on the back of the intense uptick in the Dollar on Friday. The UK Inflation Rate is due on June 19 prior to the BoE’s interest rate decision on June 20. The GfK Consumer Confidence comes on June 21, seconded by Public Sector Net Borrowing, Retail Sales, advanced Manufacturing and Services PMIs and CBI Industrial Trend Orders.
USD/JPY briefly surpassed the 158.00 hurdle following the dovish hold by the BoJ and the robust momentum in the Greenback. Declining US and Japanese yields, however, appear to have limited the upside. Machinery Tool Orders are due on June 17, ahead of the Reuters Tankan Index, Balance of Trade results and the BoJ Minutes, all expected on June19. The usual weekly Foreign Bond Investment come on June 20, while the flash Jibun Bank Manufacturing and Services PMIs and Inflation Rate will close the docket on June 21.
A dreadful second half of the week saw AUD/USD extend its rejection from three-week tops past the 0.6700 mark, although the pair managed well to advance modestly on the weekly chart ahead of next week’s RBA meeting. The release of the Australian Consumer Inflation Expectations takes centre stage on June 17, followed by the Consumer Confidence Index tracked by Westpac. On June 18, the RBA is expected to keep its rates unchanged at its meeting. Preliminary Judo Bank Manufacturing and Services PMI are expected on June 21, along with the release of the Leading Index gauged by Westpac.
Anticipating Economic Perspectives: Voices on the Horizon
- The Fed’s Harker speaks on June 17.
- The RBA’s Connolly and Ellis speal on June 18 along with Fed’s Cook, Kugler, Barkin and Goolsbee.
- The Fed’s Barkin speaks on June 20.
- The ECB’s Nagel will speak on June 21.
Central Banks: Upcoming Meetings to Shape Monetary Policies
- The RBA and the MNB meet on June 18.
- The BoE, BI, SNB and Norges Bank will all decide on rates on June 20.
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