The Fed's hawkish stance surprised the market, leading to gains in the USD market in the second half of the week. The market's attention is now focused on the BoE, RBA and SNB decisions scheduled for next week. In addition, investors will also pay attention to the US retail sales and flash PMI readings for June. Be sure to watch AUDUSD, DE40 and GBPCHF in the coming week!
AUDUSD
The hawkish Fed influenced risk sentiment in the second half of this week. There is potential for more USD volatility next week, with the release of US retail sales data for May (Thursday, 12:30 PM GMT) and preliminary US PMIs for June (Friday, 1:45 PM GMT). AUDUSD is the pair to watch, as the Reserve Bank of Australia is expected to announce a policy decision on Tuesday at 4:30 AM GMT. Money markets are pricing in a greater than 30% chance of a 25 basis point rate cut by the RBA.
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The DE40, as well as other European stock indices, may see more volatility on Friday, when preliminary PMIs for June will be released. As usual, the markets' attention will focus primarily on the data from France and Germany, at 7:15 AM GMT and 7:30 AM GMT respectively. Economists expect a slight improvement in the industrial and services indicators, although the manufacturing sector is still expected to remain in the downward zone. DE40 fell to its lowest level in more than a month after post-election political uncertainty in the EU and a hawkish Fed weighed on sentiment.
GBPCHF
GBPCHF is a pair that could see more volatility on Thursday, as the Swiss National Bank and the Bank of England will announce interest rate decisions at 8 AM GMT and 11 AM GMT respectively. The Bank of England is expected to keep interest rates unchanged, while the SNB will make its second consecutive rate cut of 25 basis points. In addition to the central banks' decisions, the GBPCHF may also see some movement in response to the UK CPI report for May (Wednesday, 6:00 AM GMT) and UK retail sales data for May (Friday, 6:00 AM GMT).
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