The most relevant events scheduled for this week are already behind us. As it was broadly expected the Federal Reserve chose to hike interest rates by 25 bps what along with a quite hawkish statement propped up the greenback. In turn, some unexpected results came from yesterday’s BoE meeting. Admittedly, the bank did not raise rates, albeit its rhetoric was really hawkish as three members voted for a hike while just one dissenter was anticipated. The last event was the BoJ decision which took nobody off-guard.
10:00 am BST – Eurozone final CPI: May’s inflation figures turned out to be much weaker than expected. Thus, nobody should expect any more relevant revisions presented later today. Nevertheless, at this stage each inflation reading is worth looking at due to ECB’s vulnerability to that kind of data. Consensus indicates 1.4% yoy and 1.9% yoy for HICP and core HICP respectively.
1:30 pm BST – US housing data: Over the course of past weeks data coming from the US economy was really bleak. That has taken the dollar quite substantially down and erased many long positions. Although, the outlook has not changed this week so far (there were gloomy inflation and retail sales prints on Wednesday) the greenback has gained momentum on the back of more hawkish tone delivered by the FED. In order to reassure the US central bank that its decision was appropriate, today’s housing data should improve. There are building permits where the consensus shows 1249k and housing starts with the market call located at 1220k
3:00 pm BST – US University of Michigan consumer confidence: Consumer confidence in the US economy has been one of the brightest spot across the macroeconomic releases. Nonetheless, it has not been sufficient to prop up the US dollar of late. For that reason, changes in this metric should be vigilantly tracked so that it could notice another wave of weakness in the macro data e.g. in retail sales. The street’s consensus indicates 97 points. Moreover, given the latest FED’s rhetoric any changes in inflation expectations could significantly impact on the USD.
5:45 pm BST – FED’s Kaplan speech: The main view from the FED was voiced on Wednesday, hence Kaplan should not surprise us significantly presenting his mind. Either way, each FED’s member could have a bit different opinion when it comes to the US economy background.
The EURUSD is rebounding from the vicinity of the support zone and could go towards the nearest resistance placed at 1.1180. Source: xStation5