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Forex – Weekly Outlook: July 1

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© Reuters.

Investing.com – Market sentiment will be dictated by hopes for progress on the trade front after the U.S. and China agreed on Saturday to restart talks. The week will also bring the U.S. jobs report for June along with reports on U.S. manufacturing and service sector activity, factory orders and the trade balance.

Washington and Beijing agreed to restart trade talks after U.S. President Donald Trump offered concessions, including no new tariffs in order to reduce tensions with Beijing.

No deadline was set for progress on a deal, and the two sides remain at odds over significant parts of an agreement. The last major round of talks collapsed in May.

Financial markets, which have been rattled by the nearly year-long trade war, are likely to cheer the truce.

The world’s two largest economies have slapped tariffs on billions of dollars of each other’s imports, threatening to put the brakes on an already slowing global economy. Those tariffs remain in place while negotiations resume.

The U.S. dollar dipped on Friday after U.S. economic data confirmed the likelihood of a July interest rate cut, although foreign exchange markets remained subdued ahead of the meeting between the U.S. and China at the G20 summit in Japan.

The core U.S. personal consumption expenditure price index rose 0.2% in May, as expected, reinforcing investor expectations that the Federal Reserve will cut rates by 0.25% next month.

The , which measures the U.S. currency against six of its peers, was at 95.73 in late trade, broadly unchanged on the week.

Against the , the greenback last traded at 1.1368, though it has fallen by around 1.7% in the past couple of weeks.

The dollar traded at 107.89 , a touch higher on the day as the greenback mounted a recovery from a five-month low of 106.77 yen reached on Tuesday.

Meanwhile, the recovered on Friday from the five-month lows it reached earlier in the day against the dollar and , although worries about a no-deal Brexit capped the currency’s gains.

, Investing.com has compiled a list of significant events likely to affect the markets.

Monday, July 1

China Caixin manufacturing PMI (Jun)
FOMC Member Clarida Speaks
ISM manufacturing PMI (Jun)

Tuesday, July 2

RBA interest rate decision
FOMC Member Williams Speaks

Wednesday, July 3

ADP) nonfarm payrolls (Jun)
Initial Jobless Claims
U.S. trade balance (May)
U.S. factory orders (May)
ISM non-manufacturing PMI (Jun)

Thursday, July 4

U.S. market holiday

Friday, July 5

U.S. nonfarm payrolls (Jun)

–Reuters contributed to this report

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