The economic calendar will include several important events this week.
U.S. nonfarm payrolls data will be released on Friday.
Other important events include decisions by the Bank of England and the Reserve Bank of Australia.
July was a bad month for the US Dollar Index (DXY). It fell more than 4%, making it the worst month in over a decade. On the euro, the Norwegian krone, the Swedish krona, the pound sterling and the yen had their best months this year. So will the dollar weakness continue? Let's take a look at the main events that can be seen in the economic calendar this week.
Pay slips outside of agriculture
On Friday, the Bureau of Labor Statistics (BLS) will release U.S. nonfarm payroll numbers from the United States. Analysts interviewed by Reuters believe the US economy created more than 1.65 million jobs in July after having created 4.8 million in the previous month.
If the analysts are correct, it means that the United States has created 8.9 million jobs in the past three months. It also means that the economy still has 11 million jobs to be lost during the pandemic.
The data will be available at a time when the number of Covid 19 cases is increasing in the United States. There will also come a time when data from the BLS shows that more and more Americans are submitting data on unemployment claims.
Other important events related to the US dollar in the economic calendar include initial jobless claims, PMI in manufacturing and non-manufacturing, trade and factory orders.
Bank of England rate decision
The British pound had a great July. The GBP / USD pair rose almost 5%, while the pound index rose 5.10%. Will this trend continue? Perhaps the answer could come on Thursday when the Bank of England closes its two-day monetary policy meeting.
Analysts are expecting the bank to leave interest rates unchanged at 0.10%. You can also see that the quantitative easing plan remains intact as they raised the cap in the previous session. It is important that traders wait for signs of negative interest rates in the UK. While negative interest rates worked well in other countries, Analysts bewarethat they will be bad for Britain, which has a substantial financial sector.
Other events in the economic calendar include the UK PMI data and the Halifax property price index.
RBA rate decision
The Reserve Bank of Australia (RBA) will start its monthly session on Monday and make its rate decision on Tuesday. The meeting will take place at a time when the number of Covid 19 cases in Australia is increasing. It will also come when the AUD / USD pair has just risen more than 3.2%. Analysts expect the RBA to sound cautious at this meeting, but it won't manipulate interest rates. The yield curve control program will also be maintained.
Other important events in the economic calendar include the Australian PMIs, China's trade data, the AIG construction index and the Chinese manufacturing PMIs.
Japan GDP data
Japan, as the third largest economy in the world, is an important player in the global economy. Indeed, the Japanese yen is widely regarded as a safe currency. In July, the USD / JPY pair fell more than 1% as investors went safe as the number of Covid 19 cases continued to rise in the United States. Increasing tensions between the United States and China also played a role.
This week, the USD / JPY pair will respond to Japan's GDP data to be released tomorrow. Analysts expect the data to show that the economy contracted sharply in the quarter. On Tuesday, the statistical office will publish the CPI numbers, followed by data on overtime wages and household expenses.
There will be other important events in the economic calendar this week. On Tuesday, SECO will publish the consumer climate survey data, while the Turkish statistical office will publish the CPI data for July. On Wednesday, the Swedish Statistical Office will publish data on GDP and industrial production. In the meantime, we will receive Canadian job data on Friday.