Key events to monitor this week: BoE gov Bailey's speech, German CPI, US core CPI, BoC interest rate decision
BoE Gov Bailey Speaks (on July 09): Bank of England (BOE) Governor Andrew Bailey (Mar 2020 - Mar 2028) is to speak. As head of the BOE's Monetary Policy Committee (MPC) which controls short term interest rates, Bailey has more influence over sterling's value than any other person. Traders scrutinize his public engagements for clues regarding future monetary policy.
His comments may spark a short-term positive or negative trend. German CPI (MoM) (Jun) (July 11): The Consumer Price Index (CPI) measures the change in the prices of goods and services from the perspective of the consumer. As Germany has the largest output of any country in the euro-zone, the European Central bank pays very close attention to this figure in its role of maintaining price stability.
A reading that is stronger than forecast is generally supportive (bullish) for the EUR, while a weaker than forecast reading is generally negative (bearish) for the EUR. US Core CPI (MoM) (Jun) (July 12): The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The Central bank pays very close attention to this figure in its role of maintaining price stability.
Because the Fed believes that core inflation is a better gauge of underlying price pressures, it is more closely watched than overall inflation which tends to be more volatile. A reading that is stronger than forecast is generally supportive (bullish) for the USD, while a weaker than forecast reading is generally negative (bearish) for the USD. BoC Interest Rate Decision (July 12): The Bank of Canada (BOC) publishes its decision on where to set the benchmark interest rate.
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