RedFX Snap: A huge week for the USD

Below is a great summary by CNBC, but the headline says it all .. Markets face what could be the most important week of summer with Fed, earnings and economic data

The ECB raised rates last week, but the Press Conference was very unconvincing as Christine Lagarde looked very uncomfortable about the bond-market stabilisation programme and failed to convince markets that the ECB would continue to raise rates aggressively. After an initial rally, the EUR fell back to where it started!

This week, the USD is in the spotlight. Wednesday night may see a 0.75% rate increase from the US Central Bank. If this is delivered (more than consensus expectations) we can expect the USD to strengthen.

With EUR/USD having hit 1-1 on 14th July – the same day that GBP/USD hit 1.1800 – these levels might be threatened once again if the Fed matches its rate decision with an aggressive tone at the Press Conference.

US GDP later in the week will also be closely watched. China’s GDP falling dramatically last week. If the USA has kept decent momentum, then a global rebalancing might be on the cards. We shall see!

Great article on CNBC is here: CNBC Link to article

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