Markets Eye US Inflation & Tariff Updates Next Week.
Looking ahead to next week, the focus will be on US inflation data and tariff developments.
The US Dollar continued its downward trend this week as investors began bracing for a more politically driven and dovish Federal Reserve, especially after news that Stephen Munchin will replace Jerome Powell as Chairman of the Federal Reserve. Meanwhile, trade tensions remain high, with new “reciprocal tariffs” on many US trade partners taking effect last Thursday.
The US Dollar Index (DXY) slipped further below last week’s highs, falling past the key 100.00 level and testing support near 98.00, despite rising US yields. Key events to watch next week include the August 12 Inflation Rate release, the NFIB Business Optimism Index, and the API’s weekly crude oil stock report. Mortgage applications and the EIA’s crude inventories update are scheduled for August 13. Producer Prices and Initial Jobless Claims are expected on August 14, and Retail Sales, alongside several other economic indicators, will round out the week on August 15.
The euro found some footing, with EUR/USD gaining momentum over the last five days and testing the important 1.1700 level. Germany’s ZEW Economic Sentiment kicks off the week on August 12, followed by Germany’s final inflation data on August 13. Eurozone Q2 GDP estimates come on August 14, ahead of industrial production and employment figures. Germany’s wholesale prices will be released on August 15.
Despite a slight dip on Friday, GBP/USD managed to push higher on the weekly chart, breaking above 1.3400. The BRC Retail Sales Monitor is due August 12, followed by the crucial UK labor market report. Other important UK data—including house prices, GDP, business investment, trade balances, and productivity—will be released throughout the week.
USD/JPY faced a choppy week, capped by resistance near 148.00. Producer Prices, the Reuters Tankan Index, and machine tool orders are on the calendar for August 13, with Q2 GDP and industrial production updates due August 15.
AUD/USD bounced back strongly, reclaiming the 0.6500 level amid improving risk appetite. Australia’s NAB Business Confidence will be released on August 12, followed by wage data, home loans, and investment lending on August 13. The all-important Australian labor market report is expected on August 14.
Looking ahead, several Fed officials—Barkin, Schmid, Goolsbee, and Bostic—are scheduled to speak between August 12 and 14, offering insight into the Fed’s thinking.
On the central bank front, the Reserve Bank of Australia meets on August 12, with markets expecting a rate hold or a slight increase to around 3.85%. The Bank of Thailand’s meeting on August 13 is also in focus, with an anticipated rate hold near 1.75%.
This week’s mix of political shifts, economic data, and central bank talks promises plenty of market-moving events to watch closely.