The dollar first jumped sharply and then fell almost as sharply after Federal Reserve Chairman Jerome Powell said last Friday that "the Fed should continue like this until the job is done," meaning that "the main focus is on the return of inflation to the target level of 2%.
But in the end, the dollar resumed growth: one way or another, Powell confirmed the intention of the Fed to defeat high inflation. It should be noted, by the way, that in July annual inflation in the US did decline from the 40-year high of 9.1% reached in June.
Although "the decision to raise the rate in September will depend on the aggregate data from the July meeting", and "at a certain point, as the policy tightens further, it will be advisable to slow down the pace of rate hikes", "the central bank purposefully moves the policy to a fairly tight level, to bring inflation back to 2%," Powell added.
And this means that the Fed will continue to act decisively to return the inflation rate to 2.0%, i.e. continue to tighten monetary policy, and this is a serious argument in favor of further growth of the dollar.
As always, a number of important macroeconomic data and a number of important news are expected to be published during the new trading week. It is also worth noting that changes may be made to the economic calendar during the coming week.
Monday, 29 August
The End of Summer Holiday in most of the UK. Banks and stock exchanges of the country do not work on this day, which will affect the trading volumes during the European trading session: they will be lower than usual.
- Australia. Retail sales level
The Retail Sales Level Index is the main indicator of consumer spending, which accounts for the majority of overall economic activity. It is also considered an indicator of consumer confidence and reflects the state of the retail sector in the short term.
The growth of the index is usually a positive factor for the AUD; a decrease in the indicator and worse-than-expected data are negative.
Previous index values: +0.2%, +0.9%, +0.9%, +1.6%, +1.8%, +1.8% (in January 2022).
Forecast for July: +0.3%.
The level of influence on the markets is average.
Tuesday, 30 August
- Germany. Harmonized Consumer Price Index HICP (Advance release)
Consumer prices account for the bulk of overall inflation. Under normal economic conditions, rising prices force the country's central bank to raise interest rates in order to avoid excessive inflation (above the target level of the central bank). One of the dangerous periods of the economy is stagflation. This is rising inflation in a slowing economy. In this situation, the central bank must act very carefully so as not to harm the recovery of economic growth.
The index (CPI) is published by the EU Statistics Office, is an indicator for assessing inflation and is used by the Governing Council of the European Central Bank to assess the level of price stability. Usually, a positive result strengthens the EUR, a negative one weakens it.
The growth of the indicator is a positive factor for the national currency (under normal conditions). Data worse than the previous value and/or forecast will negatively affect the euro.
Previous indicator values: +8.5% in July, +8.2% in June, +8.7% in May, +7.8% in April, +7.6% in March, +5.5% in February, +5.1% in January 2022 (annualized).
Forecast for August: +8.7% in August (according to preliminary estimate)
The level of influence on the markets is medium to high.
- USA. Consumer Confidence Index
This document is a report by the Conference Board of a survey of approximately 3,000 US households that asks respondents to assess the level of current, future economic conditions and the overall economic situation in the United States. The confidence of American consumers in the economic development of the country and in the stability of their economic situation is a leading indicator of consumer spending, which accounts for a large part of overall economic activity. A high level of consumer confidence indicates growth in the economy, while a low level indicates stagnation. The previous value of the indicator is 95.7. An increase in the indicator will strengthen the USD, and a decrease in the value will weaken the dollar.The level of influence on the markets is medium to high.
Wednesday, 31 August
- China. Chinese Federation of Logistics and Procurement PMI (CFLP) business activity indexes in the manufacturing and services sectors of the Chinese economy
This report is an analysis of a survey of 3,000 purchasing managers, in which respondents are asked to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventory. Purchasing managers have perhaps the most up-to-date information about the situation in the company, so this indicator is an important indicator of the state of the Chinese economy as a whole.
Since the Chinese economy is, according to various estimates, the first in the world (at the moment), Chinese macro data can have a big impact on the financial market and investor sentiment, especially on the markets of the Asia-Pacific region.
Data above 50 indicates an increase in activity. The relative growth of the index and values above 50 should have a positive impact on the CNY.
Previous values: 49.0, 49.6, 47.4, 49.5, 50.2, 50.1 (in January 2022) for manufacturing PMI, and 53.8, 47.8, 41, 9, 48.4, 51.6, 51.1 (in January 2022) for Services PMI.
Forecast for August: 49.2 and 52.2, respectively.
The level of influence on the markets is medium to high.
- Eurozone. Consumer Price Indices in the eurozone (preliminary release)
The Consumer Price Index (CPI) determines the change in prices in a certain basket of goods and services over a given period, being a key indicator for assessing inflation and changing consumer preferences.
In the core consumer price index (Core Consumer Price Index, Core CPI), food and energy are excluded from the calculation for a more accurate assessment.
Estimating the level of inflation is important for the management of the central bank in determining the parameters of the current monetary policy. A reading lower than forecast/previous could trigger a weaker euro as low inflation forces the ECB to stay loose on monetary policy. Conversely, rising inflation and its high level will put pressure on the ECB to tighten its monetary policy, which in normal economic conditions is assessed as a positive factor for the national currency.
Previous CPI values (annualized): +8.9%, +8.6%, +8.1%, +7.4%, +7.4%, +5.9%, +5.1 % (in January 2022).
Previous Core CPI values (annualized): +4.0%, +3.7%, +3.8%, +3.5%, +3.0%, +2.7%, +2, 3% (in January 2022).
Forecast for August 2022: +9.0% (annualized) and +4.1%, respectively.
The level of influence on the markets is medium to high.
- USA. ADP Private Sector Employment Report
ADP will present the monthly report on employment in the private sector of the US economy in August. This report usually has a strong impact on the market and dollar quotes, although, as a rule, there is no direct correlation with Non-Farm Payrolls. Strong data has a positive effect on the dollar; a decrease in the indicator can negatively affect it.
In any case, during the release of this report, there may be an increase in volatility in the market and, above all, in dollar quotes.
Previous values: 128,000 in May, 202,000 in April, 249,000 in March, 601,000 in February, 512,000 in January 2022.
Forecast for August: +200,000.
The level of influence on the markets is medium to high.
This Statistics Canada report is the broadest indicator of economic activity and the main indicator of the state of the economy. High GDP figures will have a positive impact on the CAD quotes, and, conversely, a weak GDP report will have a negative impact on the CAD.
Previous reports came out with values of +3.1% in the 1st quarter of 2022, +6.7% in the 4th quarter, +5.5% in the 3rd quarter of 2021. Forecast for the 2nd quarter of 2022: +4.3%, which in general should have a positive impact on CAD quotes. Despite the relative decline, the data suggests that the Canadian economy is still recovering after its strong fall in early 2020 due to the coronavirus pandemic (in the 1st quarter of 2020, Canada's GDP fell by -8.6%, and in the 2nd -44.2%). Better-than-expected data will also have a positive impact on CAD.
Thursday, 01 September
The statistical office of Germany will publish a report with data on retail sales. The change in the indicators of the report on retail sales affects the indicator of consumer spending, indirectly indicating the state of the German economy and the level of income of citizens.The German economy is the locomotive of the entire European economy. Therefore, euro quotes are very sensitive to the release of important macro statistics for Germany.A high result usually strengthens the euro, and vice versa, a low result weakens it. Data better than the forecast and/or the previous value is likely to have a positive impact on the euro, but - in the short term.Previous values: -1.6% (-8.8% y/y), +0.6% (-3.6% y/y), -5.4% (-0.4% y/y) , -0.1% (-2.7% y/y), +0.3% (+7.0% y/y), +2.0% (+10.3% y/y) in January 2022.Forecast for July: +0.2% (-8.0% in annual terms).The level of influence on the markets is medium to high.
- Germany. Index (PMI) of business activity in the manufacturing sector (final release)
This S&P Global report is an analysis of a survey of 800 purchasing managers that asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier shipments and inventory. Since purchasing managers have perhaps the most up-to-date information on the situation in the company, this indicator is an important indicator of the state of the German economy as a whole. This sector of the economy forms a significant part of Germany's GDP. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro.Previous values: 49.3, 52.0, 54.8, 54.6, 56.9, 58.4, 59.8, 57.4, 57.4, 57.8, 58.4, 62.6 The level of influence on the markets (final release) is average.
- Eurozone. Composite index (PMI) of business activity in the manufacturing sector (final release)
The Eurozone Manufacturing PMI (from S&P Global) is an important indicator of the state of the entire European economy. A result above 50 is considered positive and strengthens the EUR, below 50 is considered negative for the euro. Data worse than the forecast and/or the previous value will have a negative impact on the euro. Previous values: 49.8, 52.1, 54.6, 56.5, 58.2.
The level of influence on the markets (final release) is average.
- UK. Index (PMI) of business activity in the manufacturing sector (final release)
The UK Manufacturing PMI (from S&P Global) is an important indicator of the health of the UK economy. If the data turns out to be worse than the forecast and the previous value, then the pound is likely to fall sharply in the short term. Data better than the forecast and the previous value will have a positive impact on the pound. At the same time, a result above 50 is considered positive and strengthens the GBP, below 50 is considered negative for the GBP.Previous values: 52.1, 52.8, 54.6, 55.8, 55.2, 58.0, 57.3.The level of influence on the markets (final release) is average.
The US Department of Labor will publish a weekly report on the state of the US labor market with data on the number of primary and secondary claims for unemployment benefits. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Fed in determining the parameters of its monetary policy.The result is higher than expected and the growth of the indicator indicates the weakness of the labor market, which negatively affects the US dollar. The drop in the indicator and its low value is a sign of the recovery of the labor market and may have a short-term positive impact on the USD.Initial and re-claims are expected to remain at pre-coronavirus lows, which is also positive for the dollar, indicating the stability of the US labor market.Previous (Weekly) figures for initial jobless claims: 250,000, 252,000, 248,000, 254,000, 261,000, 244,000, 235,000, 231,000, 232,000, 202,000, 211,000Previous (Weekly) Values for New Jobless Claims Data: 1,437,000, 1,430,000, 1,420,000, 1,368,000, 1,384,000, 1,333,000, 1,372,000, 1,324,000, 1,331,000, 1,309,000, 1,309,000
The level of influence on the markets is medium to high.
- Canada. Business activity index (PMI) in the manufacturing sector
The monthly S&P Global report publishes (among other data) the PMI in the manufacturing sector of the Canadian economy, which is an important indicator of the state of this sector and the Canadian economy as a whole. A result above 50 is seen as positive and strengthens the CAD, below 50 as negative for the Canadian dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term.Previous indicator values: 52.5, 54.6, 56.8, 56.2, 58.9, 56.6, 56.2 (in January 2022).The level of influence on the markets is average.
- USA. Business activity index (PMI) in the manufacturing sector
The monthly report of the Institute of Supply Management (ISM) publishes (among other data) the PMI index of manufacturing activity in the US economy, which is an important indicator of the state of this sector and the American economy as a whole. A result above 50 is considered positive and strengthens the USD, below 50 is considered negative for the US dollar. The data above the value of 50 indicate an acceleration of activity, which has a positive effect on the quotes of the national currency. If the indicator falls below the forecast and, especially, below the value of 50, the dollar may sharply weaken in the short term.Previous indicator values: 52.8, 53.0, 56.1, 55.4, 57.1, 58.6, 57.6 (in January 2022).Forecast for August: 52.6.
The level of influence on the markets is high.
Friday, 02 September
- USA. NFP (number of new jobs created outside the agricultural sector) and unemployment rate
The central event of Friday will be the release of the monthly report of the US Department of Labor with data on the main indicators of the country's labor market for August. Market participants are closely following this report, and market volatility during the period of its release usually rises sharply, especially in dollar quotes.The growth of this report's figures (average hourly wages and the number of new jobs created outside the agricultural sector) and the decrease in the unemployment rate are positive for the dollar.Previous values (average hourly wages / new jobs created outside the agricultural sector / unemployment rate): +0.5% in July, +0.3% in June, May and April, +0.4% in March, 0% in February, +0.7% in January 2022 / +0.528 million in July, +0.372 million in June, +0.390 million in May, +0.428 million in April, +0.431 million, +0.678 million in February, +0.467 million in January 2022 / 3.5% in July, 3.6% in June, May, April and March, 3.8% in February, 4.0% in January 2022.Forecast for August: +0.3% / +0.290 million / 3.5%, respectively.The indicators can be called, if not strong, then very positive. At the same time, unemployment remains at minimal levels. In any case, the market reaction to the publication of the US Department of Labor report may be unpredictable, because indicators of previous monthly reports can often be revised, and not always for the better.With volatility traditionally expected to spike around the time this report is released, it may be best for conservative traders to stay out of the market during this time frame.
The level of influence on the markets is high.
Anuluj 
