The week of 22nd-26th July 2024- President Biden gives way.

In a courageous move, faltering President Joe Biden has announced that he will not stand again for President and has endorsed Vice President Kamala Harris for the Democratic nomination. The FX Market took the news in its stride. Major currencies were little changed on London’s open aside from possible intervention from Japanese authorities to strengthen the yen following on from confirmed intervention last week.?

In a quiet week for data the main releases are a Bank of Canada interest rate decision and US PCE figures.?

There seems to me to be a growing acceptance that a 2% target for inflation in many countries is proving difficult to achieve, that some central banks are waiting for the Fed to buckle and many central banks? are itching to cut interest rates. It’s obvious to me that the current Fed Chair Powell is a dove. We will see what the Fed does next week. The Bank of Canada is expected to cut Canadian interest rates on Wednesday this week from 4.75% to 4.5% after favourable inflation figures last week (Headline 2.7%: Core 1.9% for June).?

On the inflation side last week was very interesting; it fell in Canada, New Zealand and Japan, while holding steady in the UK and Eurozone. The Fed will be looking for an improvement in this Friday’s PCE numbers- their preferred gauge of inflation- which posted 2.6% y.o.y for both Core and Headline last time out.?

Other data this week includes German Consumer Confidence on Wednesday, with analysts predicting a slightly more sanguine print, a German IFO business assessment on Thursday with similar up-beat forecasts, and US Durable Goods Orders (also on Thursday) with a more positive July number expected. Michigan Consumer Sentiment (Friday) is likely to be slightly lower at 66 for July vs 68.2 for June.?

Keep your eye on Gold which bounced and retraced last week and the yen and its crosses. Japanese intervention around interest rate decisions is always a possibility (however late in the Japanese day) and so CADJPY may see some attention on Wednesday.?

Good Luck and Good trading!

Ben Robson?

Ben Robson is Head of Institutional E-FX at Swiss Finance Corporation. He is also the Amazon Best Selling Author of Currency Kings – How Billion traders Made their Fortune Trading Forex. McGraw Hill