Europe Weekly Outlook- Market Analysis & Insights

Let’s have a Europe Weekly Outlook.

Europe Weekly Outlook – Asia Session Recap

During the Asia session, the Reserve Bank of New Zealand (RBNZ) made the decision to maintain their official cash rate (OCR) at 5.5%. The accompanying statement indicated the Committee’s consensus on keeping the OCR at restrictive levels in the foreseeable future. This strategy aims to steer headline CPI back within the target range of 1% to 3%. While there has been a decline in both headline inflation and inflation expectations, the core reading remains relatively high. Global economic growth concerns are impacting export prices, and domestic activity continues to show signs of slowing. The Kiwi reacted with strength, rising from 0.5940 to a peak of 0.5965 following the relatively hawkish statement.

Implications for Europe & US Sessions

The UK is going to release its consumer inflation data for July. Projections suggest that the headline CPI will decrease to 6.7% YoY, a drop from June’s reading of 7.9% YoY. The core CPI is anticipated to experience a minor decrease to 6.8% YoY from the previous 6.9% YoY. If the inflation figures turn out to be ‘softer’ than expected, the Pound could face downward pressure. Additionally, the Federal Reserve is set to release the minutes from its July FOMC meeting. This could impact the demand for the US dollar and potentially drive the Dollar Index (DXY) higher. Currently, the DXY is trading around 103.20.

The Dollar Index (DXY)

• Key News Events for the Day:
• FOMC Meeting Minutes (6:00 pm GMT)

What to Anticipate for DXY Today

The release of the FOMC meeting minutes from July is expected to provide further insights into the policy decisions. It will also show rate hike projections discussed by Chairman Jerome Powell and other committee members. These minutes have the potential to influence the demand for the US dollar and potentially lead to an upward movement in the DXY.

Central Bank Highlights

The federal funds rate target range remains at 5.25% to 5.50%.

• The Committee is committed to achieving its 2.0% inflation target.
• Adjustments to monetary policy will be made if risks arise that could impede goal achievement.
• Consideration will be given to factors such as labor market conditions, inflation pressures, inflation expectations, and international and financial developments.
• The next meeting will be on September 19 to 20, 2023.

Lastly, stay updated with the Market News.