Dollar holds firm supported by economic data

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Next week, key events in the US include Retail Sales data and the release of the FOMC minutes. Market participants will also closely listen to comments from Fed officials as they prepare for the Jackson Hole Symposium. In the UK, inflation and employment data will be reported. The RBNZ will have its monetary policy meeting. The RBA will release its meeting minutes, and Australia will report employment figures. Canada’s inflation data is also expected to be released.

Here is what you need to know for next week: 

Next week, the US is scheduled to release several important economic indicators. On Tuesday, Retail Sales data will be published, followed by Building Permits and Industrial Production on Wednesday and Jobless Claims on Thursday. From China, upcoming data includes Retail Sales and Industrial Production figures for July. However, the most significant event is likely to be the release of the FOMC meeting minutes on Wednesday. Additionally, market participants will closely monitor comments from Federal Reserve members as they prepare for the Jackson Hole Symposium, which is scheduled to begin on August 24th.

The US Dollar Index continued its rally and gained ground for the four week in a row. It closed the week at the highest level since June, approaching the 103.00 level. Stock markets showed little change as caution prevailed. Crude oil extended its seven-week upward trend but retraced slightly after reaching the highest level since November. WTI crude settled above $82.00 per barrel.

US Treasury yields climbed higher, with the 10-year yield surpassing 4.15%. Gold experienced a $30 loss and closed near $1,910, while Silver declined by 4.2% to around $22.60 per ounce.

EUR/USD had a negative week but found support above the 200-week Simple Moving Average (SMA) around 1.0940. Several European countries will observe a holiday on Monday. Germany is expected to report a moderation in the annual Wholesale Price Index from -2.9% to -2.6% for July. The ZEW Survey is scheduled for release on Tuesday. The Eurozone will report Q2 growth data, employment change, and the final CPI on Wednesday and Friday, respectively.

GBP/USD ended in negative territory for the fourth consecutive week. The bias remains bearish, with key support around the 1.2600 level. Following Friday’s positive surprise in UK growth figures, the upcoming week will be busy with the employment report on Tuesday, inflation data on Wednesday, and retail sales figures on Friday.

USD/CHF rose during the week but failed to reach three-month highs. Upside remains capped around 0.8800. Switzerland will release the Producer and Import Price Index for July on Tuesday.

USD/JPY surged towards the 145.00 level, marking the highest weekly close since November. The Japanese Yen underperformed, influenced by divergent monetary policies and higher government bond yields. Japan will release Q2 growth data, Industrial Production figures on Tuesday, trade data and Machinery Orders for June on Thursday, and the National CPI on Friday.

AUD/USD ended the week testing levels below 0.6500 and remains under pressure. The pair is approaching 2023 lows. The Reserve Bank of Australia (RBA) will release the minutes of its latest meeting on Tuesday. In terms of economic data, the Q2 Wage Price Index is due on Thursday, expected to show a 1% increase, which will be important for the RBA. The July employment report will be released on Thursday, with an expected positive change in jobs of 21,500.

USD/CAD climbed above the 20-week SMA and encountered resistance at 1.3500. Despite another negative week against the US Dollar, the Canadian Dollar outperformed the Australian Dollar and the New Zealand Dollar. Canada will report consumer inflation on Tuesday.

NZD/USD maintains a negative tone and broke below 0.6000 on Friday, marking the lowest weekly close since November of the previous year. The Reserve Bank of New Zealand (RBNZ) will announce its decision on Wednesday, with the rate expected to remain unchanged at 5.5%. On Thursday, New Zealand will release the Producer Price Index.

The Colombian Peso and the Mexican Peso were among the top performers in the currency market during the week, while the South African Rand experienced the most significant decline.