On July 19, in the coming week, the manufacturing and service PMI in Europe and the United States will provide any signs of the impact of Trump's tariff policies. On the central bank front, the Federal Reserve is entering its quiet period before the July monetary policy meeting, but Fed Chairman Powell, who has recently been embroiled in a public opinion storm, will make an appearance, and market participants will be watching closely to see if he responds to Trump's recent attacks. The European Central Bank will announce its latest interest rate decision.
On Tuesday at 20:30, Fed Chairman Powell will deliver a welcome speech at a regulatory meeting;
On Thursday at 20:15, the European Central Bank will announce its interest rate decision; at 20:45, ECB President Lagarde will hold a monetary policy press conference;
On Thursday at 20:30, initial U.S. jobless claims for the week ending July 19.
This week, there were reports that Trump has discussed the idea of firing Powell with other Republicans. However, he quickly downplayed these discussions, saying it was "extremely unlikely" to fire Powell. If Powell insists on defending the Fed's independence and again emphasizes the need to be patient and wait for more data to show the impact of tariffs, the dollar is likely to extend its recovery.
That said, it is too early to start discussing a bullish reversal of the dollar. Although this global reserve currency has responded positively to recent tariff-related headlines, traders may still start to react as they did in April, selling the dollar if tariffs begin to heighten concerns about an economic recession.
