Next week will provide insights into potential central bank rate cuts, as several important data releases are scheduled.
In the US, following the high PCE data from two weeks ago, inflation figures will be awaited on Wednesday. Attention will shift to unemployment data on Thursday to assess the current state of the increasingly weakening labor market observed in recent reports. The key question for the market will be whether these data support the Fed's decision to cut rates due to inflation moving towards target levels and a weakening labor market.
Past weeks in Europe have seen declining inflation data and high PMI figures, shaping expectations for a potential rate cut. Additionally, Germany's inflation data, scheduled for release on Tuesday, may provide further clues about this decision. The interest rate decision on Thursday is expected to bring significant volatility to the EUR/USD pair.
In the UK, growth data will be released on Wednesday, where a slower rate-cutting cycle is expected. The market will closely watch whether this data supports those expectations.
GDP data that could influence the Bank of Japan's anticipated rate hike later this year will be released in Japan. With rising wages and high inflation contrasting with weak manufacturing PMI figures, the BoJ's decision remains uncertain. The upcoming data, scheduled for release on Sunday night, is expected to provide insights into the BoJ's future policy direction.
Dollar Slips on Tariff Fears and Fiscal Woes (26 - 30 May, 2025)The dollar index held near 99.5 on Friday, its lowest in over two weeks, as Trump’s proposed 50% tariffs on EU goods and widening U.S. fiscal concerns pressured sentiment. The euro touched $1.137 before easing to $1.13, set for a weekly gain, supported by solid German data but capped by weak PMI and ECB rate cut bets. The yen rose to 143.6, gaining over 1% this week after core inflation hit a two-year high at 3.5%. The pound climbed above $1.347 on strong UK retail sales, improved confidence, and falling energy prices, though inflation at 3.5% kept BoE cut expectations in play.
Detail Euro Rebounds, Gold Holds Ground (05.23.2025)EUR/USD rebounded near 1.1330 as Treasury yields fell and traders awaited Eurozone GDP data.
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Memorial Day (26-27 May, 2025)Trading conditions for certain instruments will be changed due to the Memorial Day Holiday on 26 and 27th May, 2025.
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