As the final week of July commences, the greenback remains under short-term pressure in what will be a key week for financial markets. A combination of both tier 1 economic data and central bank announcements will keep participants on their toes and should ensure volatility remains in place from the start to the finish of the week.
One of the main highlights on the data front will be the advanced release of US Q2 GDP. The report is scheduled for Thursday and is expected to be the largest single quarterly drop in US history. The consensus is for a contraction of 34%. This piece of data should be a significant market-mover and one which could help shape the path for the US dollar throughout the remainder of 2020.
The eurozone will also release its Q2 GDP number, this is expected to come in at -11.2% while Germany’s is forecasted at -9%. Both these numbers are released on Thursday and should provide more colour on the recent divergence between Europe and the US which has led to a strong rally in the EURUSD pair.
The Federal Reserve is due to meet this week and provide an announcement on monetary policy on Wednesday evening. The central bank is expected to maintain a policy with no major changes. This will likely be another source of USD volatility this week as the greenback begins the week lower against many of the majors.
Written by Viv Savani. 9:00am, July 27th 2020
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