British Pound, Euro, Gold, US Dollar, CPI and GDP Data

The US Dollar managed to outperform its major counterparts this past week despite a weak finish on Friday. That followed the nonfarm payrolls report where the headline rate of jobs growth slightly missed expectations. But, a lower unemployment rate and still-strong average hourly earnings meant that the Federal Reserve still has much work to do.

Gold prices, while gaining after the jobs report, still finished the week lower amid a surge in longer-term Treasury yields. The British Pound remained pressured despite a rate hike from the Bank of England. Meanwhile, a deterioration in market sentiment meant that the pro-risk Australian and New Zealand Dollars underperformed.

Of course, the weakness in AUD/USD was amplified by last week’s RBA interest rate decision. Focusing on stock markets, it was the worst week for the S&P 500 since early March as the index fell almost 2.4 percent. This might have been driven by the rise in longer-term Treasury yields relative to near-term rates. That reflects a tighter Federal Reserve for longer.

In terms of what to expect in the week ahead, all eyes turn to US inflation data on Thursday. A cautious pickup in the headline CPI rate is expected, which is not terribly great news for the Fed. Meanwhile, underlying core inflation is seen slowing cautiously. Meanwhile, the UK will release the latest GDP figures. What else is in store for financial markets in the week ahead?

How Markets Performed – Week of 7/31

Forecasts:

British Pound (GBP) Forecasts: GBP/USD and EUR/GBP After BoE Hike

The British Pound is marginally lower against both the US dollar and the Euro on the week after the latest BoE policy decision saw the terminal Bank rate outlook trimmed.

Australian Dollar Forecast: AUD/USD and AUD/NZD Whipped but Range Bound

The Australian Dollar collapsed last week but is yet to break the big picture range as global markets question the rosy outlook that prevailed through July. Will AUD/USD bounce from here?

Euro Forecast: EUR/USD Holds at Support, EUR/JPY Remains Stuck in Range Trade

The Euro was able to fend off a push from the US Dollar last week in the aftermath of Friday’s non-farm payrolls report. How does this leave EUR/USD and EUR/JPY looking heading into the new week?

Japanese Yen Forecast: USD/JPY, GBP/JPY Struggle for Fresh Highs as FX Intervention Fear Lingers

Yen enjoyed a mixed week against its G7 counterparts but faced renewed pressure as the initial bounce following a tweak of the YCC policy wore off. More losses in store for the Yen?

Oil Forecast: WTI Recovery Meets Resistance after Saudi, Russia Confirm Cuts

OPEC’s ministerial panel closely monitors the oil market as Saudi and Russian oil cuts are scheduled for September. WTI on track to rise for a sixth straight week.

Gold and Silver Price Forecast: XAU/USD & XAG/USD at Mercy of US Inflation Data

U.S. inflation data’s momentum is expected to play a significant role in shaping the outlook for gold and silver prices in the short term by influencing the Fed’s monetary policy roadmap.

— Article Body Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

— Individual Articles Composed by DailyFX Team Members