June 7 – Economic Events Outlook – G7 Summit Up Next
Arslan Butt • 2 min read
On Thursday, the dollar index continues to trade bearish due to ongoing uncertainty about G7 summit and the meeting between the U.S. and North Korea. There’s likely to be a discussion on the recent tariffs on steel and aluminum industries, which isn’t making the Canadian, Mexican and European economies happy.
Here’s a quick summary:
Last week, the U.S. shocked its allies by slapping steel and aluminum tariffs on Canada, Mexico, and the European Union on obscure “national security” grounds. The Mexican Minister Ildefonso Guajardo named it “a sad day for international trade,” and hit back the United States with $3 billion in tariffs on U.S. goods. Well, Trump isn’t expected to stop here, and is in fact gearing up to impose more tariffs on the Canadian economy.
As highlighted in FX Leaders’ update ”3 Dates to Remember Before Trading This Week”, the 44th G7 summit kicks off on Friday in La Malbaie at Quebec, Canada, bringing together the seven biggest nations of the world. There’s likely to be an immense amount of uncertainty in the market today and tomorrow, which is why the U.S. dollar stays on the bearish side. I would probably look to invest in other instruments until the uncertainty is over and this is exactly what we can expect from other traders as well.
The economic docket offers series of low impact economic events which may have a muted impact on the market. However, the Halifax HPI from the U.K., unemployment claims from the U.S. and BOC Gov Poloz speech are the highlights for today.
Watchlist – Top Economic Events
GBP- Halifax HPI m/m
The indicator will be released at 7:30 (GMT) by the Halifax Bank of Scotland with a forecast of 1.1% vs. -3.1% previously. For newbies, it’s a leading indicator of the housing industry health as rising house prices attract investors and spur industry activity.
The Halifax HPI’s greater than expected forecast and previous figures strengthen the currency. So the HPI forecast is expected to underpin the Sterling today.
USD – Unemployment Claims
The U.S. jobless claims is a weekly data and cause short-term fluctuations in the market. The data has remained somewhat constant throughout May, ranging from 211K to 234K. In fact, this week’s claims are expected to be 223K, slightly up from 221K in the last week. I’m not expecting any heavy movement, but it’s advisable to monitor it at 12:30 (GMT) to capture any surprises.
CAD – BOC Governor Poloz
The Canadian governor is due to hold a press conference about the Financial System Review, in Ottawa at 15:15 (GMT) today. It will be interesting to see if Poloz makes any comments on the recent tariff issues and their impact on the Canadian economy.
Summing Up – The trading volume is very thin today and the markets are almost dead. Looks like the investors won’t risk ahead of the G7 meeting. But team FX Leaders is always ready to secure profitable spots for you. So, stay tuned for live market updates and forex trading signals. Good luck!