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The foreign exchange market was with full of movement last week but this week the economic calendar is quite empty. The events contain the G8 Summit, Australian and Canadian employment numbers, the BoE rate decision, the US Trade Balance and the University of Michigan Consumer Confidence report.
G8 Summit (July 7-9)
G8 meeting in Japan might be the only event which will have an important impact on the dollar. The finance minister meeting last month did not have any effect on the US dollar despite the fact that there was a lot of speculation about the chances of currency intervention and a major alteration to the language relating to currencies in the communiqué.
That is telling us that there is a possibility that the upcoming G8 meeting might not have any involvement in currency matters.
Australian Employment Numbers (July 9)
The Reserve Bank of Australia was amazingly dovish even with strong retail sales and price pressures. This week's employment numbers will play a big role in shedding more light on a situation of the Australian economy. The fall in employment component of the manufacturing and service PMI reports shows weak numbers, but the employment situation in the construction sector has shown some improvements.
Bank of England (July 10)
Next week, the British pound is the data which will affect the market. The Bank of England will schedule an interest rate decision when the UK is announcing their industrial manufacture and trade balance reports. After seeing low PMI numbers, it’s obvious why the BoE has been unwilling to lift interest rates. Mervyn King and his colleagues are likely to leave rates interest untouched once again at 5 percent - the last time they changed rates was in April when they eased by 25bp. If rates are not altered, the BoE will not reveal any comments or statements, which means that Thursday’s rate decision will not be something to focus on.
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Canadian Employment (July 11)
Regardless of new record high in oil prices, the Canadian dollar has hardly moved because of doubts about spreading effects from a slower US economy. On Friday, the IVEY PMI report reached the highest level in 2 years. This rise was mostly because of the price component which reached the highest level ever. The employment numbers will give more information on whether the economy is doing as well as the IVEY PMI number shows.
US Trade Balance (July 11)
The US trade balance and the exploratory figures for the University of Michigan Consumer Confidence numbers can impact the US dollar this week.
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Posted on Jul-08-2008
