In the fast-paced and ever-changing world of forex trading, staying informed and up-to-date with the latest news is not just a preference but an absolute necessity. As the fourth week of July 2023 unfolds, the significance of news in shaping market sentiment and guiding trading decisions becomes more pronounced than ever.
According to Daily Forex, in the fourth week of July 2023, here are some important news and data releases you can consider highlighting in your weekly trading!
Bullish Sentiment Reigns: Confidence Soars with Expected Rate Hikes
The aftermath of the two anticipated rate hikes by the US Federal Reserve and the European Central Bank has set the stage for improved risk-on bullish sentiment in the market. With the dust settling after the rate adjustments, traders are finding renewed confidence in the stability of the global economy.
The US rate hike has solidified the belief that we have reached the pinnacle of the current tightening cycle, with the terminal rate now set at 5.50%. Meanwhile, the ECB’s rate hike was accompanied by a hint of dovishness in their policy statement and press conference. This resulted in a notable selloff in the Euro, previously showing relative strength.
Although the Fed’s tone wasn’t overly hawkish, the US Dollar Index managed to gain ground over the week, reinforcing the optimism among investors. As a result of the positive sentiment on equities, analysts are becoming more optimistic about the US avoiding a recession. Additionally, corporate earnings data is looking promising, further bolstering the overall market confidence.
US Inflation Under Control: Optimism Surges
Confidence in the US economy’s ability to tame inflation without falling into a recession is gaining momentum, bolstered by last week’s data releases. US Advance GDP exceeded expectations, growing at an annualized rate of 2.2% compared to the projected 1.8%. Additionally, US Core PCE Price Index data showed a modest month-on-month increase of only 0.2%.
As the new week begins, market sentiment is expected to continue the risk-on rally. However, don’t anticipate a decline in the US Dollar, as the currency remains resilient.
Last Week’s Data Releases
- Bank of Japan Policy Rate, Monetary Policy Statement, and Outlook Report: The Bank of Japan maintained negative interest rates but surprised the market by announcing plans to loosen its yield curve control. This move led to some volatility in the Japanese Yen.
- US CB Consumer Confidence: Exceeded expectations slightly, indicating a positive outlook among consumers.
- US Revised UoM Consumer Sentiment: Came in slightly worse than expected, suggesting a slightly less optimistic sentiment among consumers.
- US, UK, German, French Flash Services and Manufacturing PMI: Flash Purchasing Managers’ Index (PMI) data for services and manufacturing sectors were worse than expected in all countries except the USA. This raised concerns about a potential recession in Europe.
- Australian CPI (Inflation) Data: Australia’s Consumer Price Index fell to 5.4%, meeting market expectations.
- Canadian GDP: Showed a month-on-month increase of 0.3%, in line with market forecasts.
- US Unemployment Claims: The number of US unemployment claims came in slightly better than expected, indicating a relatively stable labor market.
- US Employment Cost Index: This showed a slightly worse outcome than expected, signaling potential cost pressures in the job market.
The news presented on Prime Codex is solely those of the analysts quoted. They do not represent the opinions of Prime Codex on whether to buy, sell or hold specific pairs. Traders are advised to conduct their independent research before making an investment decision.