Forecasting the upcoming week: The Fed and the BoE will be in the spotlight

Another positive week saw the Greenback extend its gains, supported by easing fears around the US-China trade conflict, even though no meaningful progress has been made on that front. Looking ahead, market focus will shift to the upcoming Federal Reserve meeting, where the central bank is expected to maintain a cautious stance and keep rates on hold.

The U S Dollar Index (DXY) traded on the back foot Friday but still managed to notch a second consecutive weekly gain, supported by easing concerns around US-China trade tensions. Looking ahead, key data releases include the final S&P Global Services PMI on May 5, followed by the ISM Services PMI and the OPEC+ meeting. On May 6, markets will digest the final Balance of Trade data alongside the API’s weekly report on U.S. crude inventories. The FOMC meeting will take center stage on May 7, seconded by weekly MBA Mortgage Applications and the EIA’s crude oil stockpile report. May 8 brings Initial Jobless Claims and Wholesale Inventories.

EUR/USD snapped a multi-day losing streak on Friday but still leaned bearish on the weekly chart, so far meeting decent contention around the 1.1270-1.1260 band. On May 5, attention turns to the Sentix Investor Confidence index, with final HCOB Services PMIs for Germany and the eurozone, as well as bloc-wide Producer Prices due May 6. Germany's Factory Orders and the HCOB Construction PMI are scheduled for May 7, followed by eurozone construction figures. German Balance of Trade data and Industrial Production will round out the week on May 8.

Sellers returned to GBP/USD, ending the pair’s three-week winning streak despite a fresh multi-year high beyond the 1.3400 mark. Upcoming UK data includes the final S&P Global Services PMI on May 6 and the S&P Global Construction PMI on May 7. The BoE’s policy decision headlines on May 8, alongside the Halifax House Price Index and BBA Mortgage Rate data. On May 9, focus shifts to UK Industrial and Manufacturing Production, the NIESR GDP Tracker, and the RICS House Price Balance.

USD/JPY built on recent gains, approaching the 146.00 level on Friday before retreating slightly into the close. Japan’s final Jibun Bank Services PMI is due on May 7, with the BoJ meeting minutes out on May 8. Household Spending data will be released on May 9, along with Average Cash Earnings and preliminary readings of the Coincident and Leading Economic Indexes.

AUD/USD tested the upper end of its recent consolidation range, touching 0.6470 for the first time since early December 2024 and flirting with its 200-day SMA at 0.6460. Australia’s final S&P Global Services PMI is due May 5, followed by Building Permits and Private House Approvals on May 6. The Ai Group Industry Index rounds out the calendar on May 7.

Anticipating economic perspectives: Voices on the horizon

-       The BoE’s Bailey and Pill will speak on May 9, along with the Fed’s Williams, Barr, and Kugler.

Central banks: Upcoming meetings to shape monetary policies

-       The Federal Reserve meets on May 7 (4.25-4.50% act, 4.25-4.50% exp).

-       The BoE will meet on May 8 (4.50% act, 4.25% exp).