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Weekly Outlook, Jul 5 – 9, 2021: Top Economic Events to Watch This Week

The broad-based US dollar will end this week on a bullish track, as previously released upbeat US data tends to underpin the US currency. The greenback got some help from relatively positive economic data, with US initial jobless claims falling to their lowest level in fifteen months, at 364,000, which was way below the market expectations of 390,000. With the key jobs report for June, including non-farm payrolls, due later in the day, traders wagered robust US labor data, which could lift the dollar even further. As we know, the US dollar has been rising gradually since late May, as investors adapt to the possibility that the US Federal Reserve will raise interest rates sooner than expected. In addition to this, the market risk-on mood, backed by a combination of other factors, failed to leave any meaningful bearish impact on the US dollar.

Looking forward to the coming week, the Retail Sales and RBA Rate Statement, along with RBA Gov Lowe’s speech and the US ISM Services PMI, will determine the direction of the market during the week. On a different page, traders will also follow the chatter surrounding the US stimulus package and updates regarding the Sino-US tensions, as they could play a key role in determining risk levels in the market.

Top Economic Events to Watch This Week

1 – AUD Retail Sales (MoM) – Monday 2:30 GMT

The Retail Sales data is typically released by the Australian Bureau of Statistics. A survey of goods sold by retailers is based on a sampling of retail stores of different types and sizes. It is understood as an essential indicator to measure the pace at which the Australian Economy is running. This data shows the performance of the retail sector over the short and mid-term. Thus, the positive economic growth leaves a bullish impact on the AUD. Conversely, a low figure is seen as negative (or bearish) for the Australian dollar.Previous Release
ACTUAL: 0.1 %
DEV: -2.33
CONS: 0.7 %
DATE: Mon June 21, 2021 01:302 – RBA Interest Rate Decision:- Tuesday – 5:30 GMT

RBA Interest Rate Decision – The Reserve Bank typically makes the RBA Interest Rate Decision in Australia. If the Reserve Bank of Australia is hawkish about the inflationary view for the Australian economy, and increases the interest rates, it is viewed as bullish for the AUD. Likewise, if the Reserve Bank of Australia is dovish about the inflationary view of the economy and keeps the ongoing interest rate or cuts it, it is viewed as bearish for the AUD.

Previous Release
ACTUAL: 0.1 %
DEV: 0.00
CONS: 0.1 %
DATE: Tue June 1, 2021 04:30

ii) RBA Rate Statement – Decisions regarding this interest rate are announced by the Reserve Bank Board and are explained in a media statement that announces the decision at 2.30 pm after each board meeting. This statement is considered a primary tool that the RBA Reserve Bank Board uses to interact with investors regarding monetary policy. This statement includes the result of their decision on interest rates and a commentary about the economic conditions that influenced their decision. If the tone is more hawkish than expected, it is seen as bullish or optimistic for Australian Dollar.

3 – RBA Gov Lowe’s Speech – Tuesday – 7:00 GMT

Philip Lowe is the governor of Australia’s central bank. He has held this position since February 2012. Since he controls short-term interest rates, he has more control over the AUD than any other person. A dovish view of the Australian Economy is seen as bearish for the AUD. Conversely, a hawkish stance regarding the Australian economy is bullish or positive for the Australian currency.4 – Minutes of the FOMC Meeting – Wednesday – 19:00 GMT

The minutes of the FOMC meeting are typically issued three weeks after the day of the policy decision. Investors watch this event carefully, for fresh clues regarding the policy outlook in this publication – the vote split plays an important role. A bullish tone is expected to boost the USD. At the same time, a dovish view is seen as bearish for the USD.The market reaction to the FOMC Minutes could be delayed because, unlike the FOMC Policy Statement, news outlets don’t have access to the publication before the release.

5 – US Unemployment Claims – Thursday – 13:30 GMT

The US Department of Labor typically releases the Initial Jobless Claims. It measures the number of people filing first-time claims for state unemployment insurance. If the reading is higher than expected, it shows weakness in this US labor market, which negatively affects the strength and direction of the US economy. Likewise, low readings are seen as positive or bullish for the greenback.

Previous Release
ACTUAL: 364 K
DEV: -1.09
CONS: 393 K
DATE: Thu July 1, 2021 12:30

6 – Crude Oil Inventories – Thursday – 15:30 GMT

The EIA Crude Oil stockpiles report, released by the Energy Information Administration, is a weekly measure of the change in the stockpile of barrels of crude oil and its derivatives. It is a US key indicator and mostly affects the Canadian dollar, due to Canada’s sizable energy sector. This report tends to affect the price of oil itself and, consequently, it also impacts the WTI crude futures. This report is the primary gauge of imbalances in supply and demand in the market, which leads to changes in production levels and price volatility. If ‘Actual’ is less than ‘Forecast’, it is seen as bullish for the USD.

Previous Release
ACTUAL: -6.718M
DEV: -1.61
CONS: – 4.686M
DATE: Wed June 30, 2021 14:30

7 – CAD – Employment Change – Friday – 13:30 GMT

CAD – Employment Change – This data is typically issued by Statistics Canada. It aims to measure the change in the number of employed people in Canada. An increase in this indicator positively impacts consumer spending, which tends to boost  economic growth in Canada. Therefore, high readings are seen as bullish for the CAD, and low readings are seen as negative (or bearish) for the Canadian currency.

Previous Release
ACTUAL: -68k
DEV: -0.34
CONS: -20k
DATE: Fri June 4, 2021 12:30

ii – Unemployment Rate – This data is released by Statistics Canada. It provides a measure of the number of unemployed workers, divided by the total civilian labor force. It is one of the key indicators for the Canadian Economy, as the number of unemployed people is an essential sign of overall economic health, because consumer spending is highly correlated with conditions on the labor market. If the rate goes up, it shows a lack of expansion within the Canadian labor market. A rise in the unemployment rate leads to weakness in the Canadian Economy, therefore it is seen as negative or bearish for the economy. On the other hand, a lower figure is seen as bullish for the CAD.

Previous Release
ACTUAL: 8.2 %
DEV: 0.00
CONS: 8.2 %
DATE: Fri June 4, 2021 12:30

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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