Yen Goes on a Wild Ride after BoJ Shocker

The Japanese yen took investors on a wild ride on Friday but has settled down. In the European session, USD/JPY is trading at 139.54, up 0.05%.

Canadian Dollar Flat Ahead of Canadian GDP

The Canadian dollar is almost unchanged on Friday, trading at 1.3223 in the European session. Things could get busier for the Canadian dollar in the North American session, as Canada releases GDP and the US publishes its preferred inflation indicator, the PCE index.

EUR/USD Rebounds after Sharp Losses

The euro has bounced back on Friday after sliding 0.99% a day earlier. In the European session, EUR/USD is trading at 1.1018, up 0.38%. On the economic calendar, the US PCE Price Index, the Fed’s preferred inflation gauge, fell to 3.0% in June, down from 3.8% in May.

Canada's Economy Grew in May, with Slowdown Projected in June

The Canadian economy advanced 0.3% month-on-month (m/m) in May, coming in a tick below Statistics Canada's advanced estimate of 0.4% m/m. However, April's flat reading was revised upward by one-tenth providing an offset to this month's figure. The flash estimate for June growth points toward a -0.2% m/m contraction.

Sunset Market Commentary

The first ECB governors came to speech in the wake of yesterday’s policy meeting. Muller kicked off by saying that previous rate increases are having an impact and that next decisions are no longer obvious. Vasle and Simkus joined by adding that September could either be a hike or a pause, depending on the data.

Bank of Japan Delivers Another Hawkish Policy Tweak

The Bank of Japan (BoJ) sprung a surprise at today's monetary policy announcement, delivering another hawkish tweak to its Yield Curve Control policy. While the BoJ did not change its main policy parameters, it said it would conduct yield curve control with greater flexibility, regarding the upper and lower bounds of the range as references, not as rigid limits, in its market operations.

RBA Unlikely to Raise Rates, But Might Sound Hawkish

The Reserve Bank of Australia (RBA) will conclude its latest meeting at 04:30 GMT Tuesday. Economic developments have been mixed lately, so markets are only pricing in a 20% probability for a rate increase. As for the Australian dollar, the most crucial variable might be the power and scope of China’s stimulus measures, instead of any domestic developments.  

Weekly Economic & Financial Commentary: Fed to Hike Next Week, but What Then?

The FOMC's decision to leave policy unchanged in June was delivered with a hawkish message. We expect another 25 bps hike at next week's meeting, bringing the target range to 5.25%-5.50%. While markets doubt the prospect for further tightening beyond July, we look for the post-meeting statement and press conference to signal further hikes remain possible.

The Weekly Bottom Line: Fed Gearing Up for Another (Likely Final) Hike

The Federal Reserve is nonetheless expected to maintain a tightening bias over the near-term, and is almost certain to hike the policy rate once more next week. A Fed hike is fully priced in by markets at this point. Provided inflation continues to cool, this will likely be the Fed’s last hike this cycle.

Forex and Cryptocurrencies Forecast

When the DXY Dollar Index dropped to April 2022 levels (99.65) on July 14, many market participants concluded that the best days for the American currency were over. Inflation is nearing target levels, and in order not to suffocate the economy, the Federal Reserve will soon initiate a campaign to ease its monetary policy. However, things aren't that straightforward. After reaching a peak of 1.1275 on Tuesday, July 18, the EUR/USD pair reversed and started to decline.