• The second week of July will largely concentrate on the counterparties within the US-China commerce battle: of the ten ‘excessive’ rated occasions on the DailyFX foreign exchange financial calendar this week, half are due from both China or the USA.
  • Volatility ought to construct into midweek as 4 of the highest 5 occasions for the week forward are due out on Wednesday, July 10.
  • Retail trader positioning is hinting at an improved atmosphere for increased yielding currencies and risk-correlated property within the coming days.

Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, the place we talk about high occasion danger over the approaching days and techniques for buying and selling FX markets across the occasions listed beneath.

07/10 WEDNESDAY | 01:30 GMT | CNY Client Worth Index (JUN)

Regardless of the détente declared within the US-China commerce battle after the G20 summit in Osaka, Japan, merchants will need to carry on eye on USDCNH costs for the foreseeable future. Plainly,China has used devaluation as a tool to keep at bay the results of the tariffs, so Chinese language Yuan energy (USDCNH weak point) could also be interpreted as an indication that the commerce talks are nearing a optimistic decision; Chinese language Yuan weak point (USDCNH energy) could also be interpreted as an indication that the commerce talks are nearing a detrimental decision. Certainly, the 7.000 exchange rate for USDCNH could also be a very powerful degree for forex markets.

07/10 WEDNESDAY | 08:30 GMT | GBP Gross Home Product (MAY)

The dearth of readability over Brexit, thanks partly to the continued Tory social gathering management election, is proving to weigh on UK client and enterprise confidence, and in flip, weigh on UK progress expectations. Latest UK PMI readings have been declining throughout the board, and charges markets are shortly shifting into discounting an rate of interest lower by the Financial institution of England. Now that the June UK Composite PMI has moved into contraction territory, merchants ought to be looking out for extra deceleration in UK progress charges within the coming months.

07/10 WEDNESDAY | 14:00 GMT | CAD Financial institution of Canada Charge Resolution

The Financial institution of Canada’s July coverage assembly will seemingly come and go with out making too many waves. Whereas its neighbor to the south within the Federal Reserve has been elevating expectations for a collection of rate of interest cuts this yr, the BOC has been in a position to fend off dovish calls amid a surprisingly resilient Canadian financial system (regardless of risky swings in oil costs). Odds of a BOC charge lower on the July assembly are lower than 3%, and odds of a 25-bps charge lower by the tip of the yr stay beneath 25%, in response to in a single day index swaps.

07/10 WEDNESDAY | 18:00 GMT | USD June FOMC Assembly Minutes

An atmosphere marked by the uncertainty of the US-China commerce battle is filtering by way of into uncertainty over financial coverage. To wit: when requested about Fed coverage and the US-China commerce battle on the June Fed assembly press convention, Fed Chair Powell took a roundabout manner of claiming {that a} US-China commerce deal might remove the necessity for a Fed charge lower. Inherently, then, whereas charges markets are closely leaning in the direction of charge cuts now, it additionally seems that there’s a vital danger of the Fed’s bias swinging again in the direction of hawkish in a short time if a US-China commerce deal materializes.

07/11 THURSDAY | 12:30 GMT | USD Client Worth Index (JUN)

In accordance with Bloomberg Information, headline CPI is anticipated in at +1.6% from +1.8%, and Core CPI is due in to carry at 2.0% (y/y). The June US inflation report on Thursday will preserve expectations elevated that the beginning of the speed lower cycle goes to start shortly; Fed funds futures are pricing in a 100% likelihood of a 25-bps charge lower in July and, general, a 51% likelihood of a 75-bps charge lowers (three 25-bps charge cuts) by December.


Whether or not you’re a new or skilled dealer, DailyFX has a number of sources obtainable that will help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and academic webinars held daily; buying and selling guides that will help you improve trading performance, and even one for individuals who are new to FX trading.

— Written by Christopher Vecchio, CFA, Senior Forex Strategist

To contact Christopher, e mail him at

Observe him within the DailyFX Real Time News feed and Twitter at @CVecchioFX

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