Economic calendar: 3 currencies to watch this week
The currencies market saw increased activity last week as the market geared for a new month. The US dollar continued to weaken as other currencies from the developed world continued to surge. The Australian dollar continued to surge while crude oil currencies like the Canadian dollar, Mexican peso, and Norwegian krone continued to gain. Let us look at the key currencies to watch this week.
As we have written before, the US dollar has been in a downward trend as people and companies move to other currencies. This week, the dollar will be in the spotlight for three things. We will want to know whether the downward trend will continue. Second, the US will release the inflation data for the month of May. This data is usually important because it influences monetary policy. Finally, the Federal Reserve will deliver its interest rate decision on Wednesday. These factors could lead to a reversal of the US dollar.
The Canadian dollar has been on a sharp upward momentum against the US dollar. As we wrote last week, this trend is mostly because of the falling coronavirus cases, rising crude oil prices, and the overall dollar weakness. The currency, together with other crude oil currencies, will be in the spotlight because of a meeting that happened yesterday. In the meeting, OPEC members and their Russian allies agreed to extend production cuts until July. That, coupled with the positive Canadian employment numbers could help push the Canadian dollar higher.
The euro has been on an upward trend against key currencies like the dollar and sterling. The currency increased its momentum after the European Central Bank extended its asset purchases program in the last monetary policy meeting. This week, the euro will be in the spotlight because of two things. First, Christine Lagarde will address the European Union parliament where she will talk about her policies. Second, we will get the economic data from the eurozone during the week. This will include the German, France, and eurozone industrial production numbers. We will also receive the final reading of eurozone GDP data.
Other currencies to watch
Some of the other currencies to watch will be the Japanese yen, Mexican peso, Norwegian krone, and the British pound. The latter will be watched mostly because of the stalled Brexit talks. Last week, the fourth round of talks ended without any progress, which increases the likelihood of a no-deal Brexit.
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