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US Dollar May Rise on Fed Bets as June Inflation Data Tops Forecasts

US Dollar May Rise on Fed Bets as June Inflation Data Tops Forecasts

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • US Dollar Likely to Rise if June’s Inflation Data Outshines Expectations
  • Aussie Dollar Higher, Yen Declines as Risk Appetite Firms in Asian Trade
  • See Economic Data Releases on Your Charts with the DailyFX News App

A quiet economic calendar in European trading hours is likely to see investors looking ahead to the release of June’s US CPI data. The benchmark year-on-year inflation rate is expected to register at 2.1 percent, unchanged from the prior month. Data from Citigroup suggests US price-growth readings have increasingly outperformed relative to consensus forecasts since the beginning of the year, opening the door for an upside surprise. Such an outcome may inspire speculation that the time gap between October’s end of Fed QE and the first subsequent interest rate hike will be shorter than expected, driving the US Dollar higher.

The Australian Dollar narrowly outperformed in otherwise quiet overnight trade as stocks advanced, boosting support for the sentiment-linked currency. On the other side of the risk appetite spectrum, the safe-haven Japanese Yen faced selling pressure. The MSCI Asia Pacific regional benchmark equity index added 0.3 percent. Newswires attributed the move to fading concerns about the economic implications of geopolitical jitters that preoccupied investors last week.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

23:30

AUD

ANZ Roy Morgan Weekly Cons. Conf. Index

113.5

-

108.7

2:00

CNY

Conference Board Leading Index (JUN)

294.0

-

290.3

4:30

JPY

All Industry Activity Index (MoM) (MAY)

0.6%

0.6%

-4.6%

4:42

JPY

Supermarket Sales (YoY) (JUN)

-2.8%

-

-2.2%

5:00

JPY

Leading Index (MAY F)

-

105.7

5:00

JPY

Coincident Index (MAY F)

-

111.1

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

6:00

CHF

Trade Balance (CHF) (JUN)

2.78B

2.85B

Low

6:00

CHF

Exports (MoM) (JUN)

-

-5.0%

Low

6:00

CHF

Imports (MoM) (JUN)

-

-2.5%

Low

7:00

JPY

Convenience Store Sales (YoY) (JUN)

-

-0.8%

Low

8:30

GBP

Public Finances (PSNCR) (£) (JUN)

-

8.5B

Low

8:30

GBP

Central Government NCR (£) (JUN)

-

12.4B

Low

8:30

GBP

Public Sector Net Borrowing (£) (JUN)

9.4B

11.5B

Low

8:30

GBP

PSNB ex Interventions (£) (JUN)

10.5B

13.3B

Low

8:30

GBP

PSNB ex Royal Mail, APF (£) (JUN)

11.1B

13.3B

Low

9:00

EUR

Eurozone Government Debt (1Q)

-

-

Low

10:00

GBP

CBI Trends Total Orders (JUL)

8

11

Low

10:00

GBP

CBI Business Optimism (JUL)

30

33

Low

10:00

GBP

CBI Trends Selling Prices (JUL)

4

3

Low

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EURUSD

1.3457

1.3493

1.3508

1.3529

1.3544

1.3565

1.3601

GBPUSD

1.6991

1.7034

1.7055

1.7077

1.7098

1.7120

1.7163

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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