Forecasting the upcoming week: US inflation and tariffs will be in the spotlight

The US Dollar (USD) has resumed its weekly downside, as investors have started to get ready for a more political and dovish Fed, all following news that Stephen Miran will replace Adriana Kugler as one of the FOMC Governors. In the meantime, trade uncertainty remained far from mitigated after “reciprocal tariffs” against many US trade partners kicked in on Thursday.

The US Dollar Index (DXY) extended further its rejection from the previous week’s highs past the psychological 100.00 barrier, challenging once again the 98.00 area despite the weekly recovery in US yields across the curve. The Inflation Rate will be the salient event on August 12, seconded by the NFIB Business Optimism Index, and the API’s weekly report on US crude oil stockpiles. The usual weekly MBA Mortgage Applications, and the EIA’s weekly report on US crude oil inventories are expected on August 13. Producer Prices will be released on August 14 alongside weekly Initial Jobless Claims. Wrapping up the calendar on August 15, Retail Sales will take centre stage, seconded by Export/Import Prices, the NY Empire State Manufacturing Index , Industrial and Manufacturing Production, Business Inventories, TIC Flows, and the preliminary U-Mich Consumer Sentiment gauge.

The resurgence of the bid bias allowed EUR/USD to trade on a positive foot in the last five days, including a test of the key barrier at 1.1700 the figure. The ZEW Economic Sentiment in Germany and the brodaer Euroland will kickstart the domestic docket on August 12. The final Inflation Rate in Germany is due on August 13, while another estimate of the Q2 GDP Growth Rate in the euro area wil be published on August 14, ahead of Industrial Production and Q2 Employment Change figures. On August 15 comes Germany’s Wholesale Prices.

Despite Friday’s pullback GBP/USD managed to resume the upside momentum on the weekly chart, reclaiming the area beyond the 1.3400 hurdle. The BRC Retail Sales Monitor is due on August 12, ahead of the publication of the key labour market report. The RICS House Price Balance is expected on August 14, followed by the flash Q2 GDP Growth Rate, Business Investment, Goods Trade Balance, Industrial and Manufacturing Production, quarterly Labour Productivity, Construction Orders, and the NIESR Monthly GDP Tracker.

USD/JPY navigated choppy waters throughout the week, with the weekly upside capped by the 148.00 region. Producer Prices, the Reuters Tankan Index, and Machine Tool Orders are all due on August 13. The preliminary Q2 GDP Growth Rate, final Industrial Production, Capacity Utilisation, and Foreign Bond Investment figures will be published on August 15.

Following the rest of its risk-linked peers, AUD/USD regained traction and end the week with a decent adavance, managing to reclaim the 0.6500 hurdle and above. The NAB Business Confidence index is due on August 12, while the Wage Price Index, Home Loans, and Investment Lending for Homes are all due on August 13. The crucial labour market report will be released on August 14.

Anticipating economic perspectives: Voices on the horizon

The Fed’s Barkin and Schmid will speak on August 12.

The Fed’s Barkin, Goolsbee, and Bostic speak on August 13.

The Fed’s Barkin will speak on August 14.

Central banks: Upcoming meetings to shape monetary policies

The RBA will decide on rates on August 12 (act. 3.85% vs. 3.60% exp.).

The BoT meets on August 13 (act. 1.75% vs. 1.50% exp.).