This week is crucial for the US dollar as several key events are set to take place. The Federal Reserve has shifted to a more hawkish stance after cutting rates in September. Economic indicators have been strong, leading to expectations that another rate cut is unlikely in the near future. The upcoming data will provide an update on the US economy and inflation, with a focus on the NFP report on Friday.
The US economy is expected to have grown by 3.0% in the third quarter, with strong consumer confidence and job openings. The PCE inflation measure will also be closely watched after mixed CPI data. While the Fed is more concerned about the job market than inflation, a weak NFP report could lead to a more dovish tone.
In Japan, the Bank of Japan is expected to maintain its rates as inflation remains around the target of 2.0%. The lack of a rate hike could weaken the yen against the US dollar. Economic data from Japan, including industrial output and retail sales figures, will also be released on Thursday.
In the Eurozone, flash GDP and CPI data will be in focus, with expectations for modest growth and a slight increase in inflation. Stronger-than-expected data could provide some relief for the euro, while disappointing numbers may increase bets of a rate cut by the ECB in December.
The UK will announce its budget on Wednesday, with expectations of tax increases. While this may weigh on the pound, tighter fiscal policy could pave the way for faster rate reductions by the Bank of England. Long-term investments and deficit reduction are likely to be the focus of the budget.
In Australia, CPI data will be released as the Reserve Bank of Australia maintains a neutral stance on rates. Despite improvements in inflation, the RBA is expected to remain cautious. Traders will also monitor China’s PMI data for further insights into market sentiment.
Overall, the upcoming week is packed with important events that could impact major currencies and central bank policies. Investors will be closely watching the data releases for clues on future monetary policy decisions.
