Key points:

● US CPI report and testimony from Federal Reserve Chairman Powell on Capitol Hill will affect investors' bets on the Fed's September rate cut.

● For the euro, the interest rate decisions and press conferences of the European Central Bank may be crucial.

●When investors consider the global demand environment, data from China also needs to be taken into consideration.

Investors should prepare for another crucial week in the foreign exchange market. US inflation data and Federal Reserve Chairman Powell may strengthen investors' bets on the Fed's September rate cut.

USD

On Thursday, July 11th, the United States will release inflation data for June, which will have an impact on investors' expectations of the Federal Reserve's interest rate cut in September. Given the slowdown in wage growth and rising unemployment in the United States, a decrease in core inflation may give the Federal Reserve room to lower interest rates.

In addition, investors should also pay attention to the weekly unemployment benefit application report. The increase in sustained unemployment benefits applications may draw the attention of the Federal Reserve. The deterioration of the labor market may affect wage growth, reduce disposable income, limit consumer spending, and reduce demand driven inflation.

On Friday, July 12th, the Producer Price Index and the University of Michigan Consumer Confidence Report will be released successively. As a leading inflation indicator, a decrease in producer prices may indicate a weakening demand inflation environment, as producers typically lower prices when demand decreases. However, the improvement in consumer confidence may support consumer spending and increase demand driven inflationary pressure.

On July 9th (Tuesday) and July 10th (Wednesday), Federal Reserve Chairman Powell will testify in Congress. Against the backdrop of rising unemployment and shrinking service industries in the United States, Powell may hint at the possibility of the Federal Reserve cutting interest rates in September.

Euro

This week, the trend of the EUR/USD will be influenced by German trade data and the European Central Bank's interest rate decision.

On Monday, July 8th, German trade data may affect investor demand for the euro. Recent factory orders and industrial production data indicate a weakening demand environment. If the trade surplus significantly narrows, it may increase the expectation of an economic recession in Germany. However, these data are unlikely to immediately affect the interest rate path of the European Central Bank.

The German economy will once again become the focus on Thursday and Friday. The consumer price index on Thursday and the wholesale price index on Friday need to be monitored. The correction to the initial value of Germany's CPI may have a greater impact on the euro/dollar.

In addition to these data, investors should also pay attention to the comments of the European Central Bank and the results of the French elections.

Pound

On Tuesday, July 9th, BRC retail sales monitoring will shift investors' focus to the pound and the Bank of England. Lower than expected retail sales may indicate a weakened inflationary environment, increasing bets on a rate cut by the Bank of England in the third quarter of 2024.

However, the monthly GDP data for the UK released on Thursday may have a greater impact on the interest rate path of the Bank of England. The increase in economic activity may further delay the interest rate cut by the Bank of England.

Investors should also pay attention to speeches by members of the Bank of England. Huw Pill, Chief Economist of the Bank of England, will give a speech on Wednesday. Monetary Policy Committee members Jonathan Haskel (Monday) and Catherine Mann (Wednesday) will also give speeches. The views on inflation, economic prospects, and the timing of interest rate cuts may cause market fluctuations.

CAD

On Friday, July 12th, Canada will release construction permit data for May, which may affect investor demand for the Canadian dollar. The decrease in building permits may indicate a weakening of the demand environment. The deterioration of the housing market situation may affect consumer confidence and spending. The Bank of Canada may alleviate the housing market, lower borrowing costs, and boost the housing sector by lowering interest rates.

In addition to housing market data, oil price trends also need to be considered. The monthly reports from OPEC (Wednesday) and IEA (Friday) may guide investors in their judgment of supply and demand dynamics. The increase in demand in an environment of reduced supply may push up oil prices and boost investor demand for the Canadian dollar.

AUD

On Monday, July 8th, housing market data in Australia may affect investor interest in buying the Australian dollar. Housing loan and investment loan data will attract the attention of investors. The increase in demand for housing loans may indicate a tightening of housing market conditions and an increase in rent. The increase in rent may drive demand driven inflation through property services and increase investor expectations for the Reserve Bank of Australia (RBA) rate hikes.

Consumer and business confidence data will attract the attention of investors on Tuesday. The significant decline in consumer confidence may have a greater impact on the Australian dollar/US dollar. The decline in consumer confidence may suppress consumer spending and weaken demand driven inflation.

In addition, investors should also consider economic indicators and commodity price trends from China, especially iron ore prices.

New Zealand Dollar

On Wednesday, July 10th, the Reserve Bank of New Zealand (RBNZ) and NZD/USD will be the focus. Economists expect RBNZ to maintain a cash interest rate of 5.50%. Unless there is an unexpected interest rate cut, the interest rate statement may provide investors with conditions for a rate cut.

Although RBNZ's interest rate decision is the focus, Friday's economic indicators also need attention. The Commercial Purchasing Managers Index and electronic card retail sales data may affect investors' expectations of RBNZ's interest rate cuts, which may have a greater impact on RBNZ's interest rate path. Consumer spending trends affect demand driven inflation and RBNZ's monetary policy goals.

Japanese Yen

On Monday, July 8th, overtime pay and average cash income in Japan may affect investor demand for the Japanese yen. Wage increases may increase disposable income, driving household spending and demand driven inflation. A significant wage increase may alleviate the pressure of Japanese government intervention to boost the yen.

On Wednesday, July 10th, producer prices will attract the attention of investors. The upward trend in producer prices may indicate a rebound in consumer price inflation and increase bets on the Bank of Japan (BoJ) rate hike in July.

The machinery orders on Thursday, July 11th and industrial production data on Friday, July 12th may affect consumer confidence and the interest rate path of the Bank of Japan. The weakening of demand may affect the manufacturing industry and labor market conditions. Consumer confidence may weaken, thereby affecting household spending and consumer price trends.

China

On Wednesday, July 10th, China's consumer and producer price inflation data will attract investor attention. The increase in annual inflation rate may indicate an improvement in the demand environment, supporting the demand for risky assets.

Trade data also requires investor attention. The upward trend of imports and exports may alleviate concerns about a slowdown in the Chinese economy. The improvement of the Chinese economy may boost trade dependent economies such as Australia and New Zealand.

In addition, investors should pay attention to the tariff negotiations between the European Union and China. Failure to cancel tariffs may lead to comprehensive trade tariff issues, which in turn could have a negative impact on market risk sentiment.