Forex Major Currencies Outlook (July 13 – July 17, 2026)

Week Ahead Summary

BoC meeting, inflation data from the US, Q2 GDP and economic data from China as well as employment data from Australia and retail sales from the US will highlight the week ahead of us. Q2 earnings are heating up as we have big banks reporting this week.

USD — US Dollar

US – Iran renewed hostilities. In response to Iran attacking ships near Oman the US has reinstated sanctions on Iranian oil which moved oil prices above $70. US military has then started launching attacks on Iran. CENTCOM has stated that it hit over 80 planned targets in Iran. Iran has responded by attacking US base in Bahrain as well as issuing a statement in which they condemn US for violating ceasefire deal. US president Trump spoke at the NATO meeting in Ankara and used his diplomatic language to call Iran “dirty players” and “scum”. He also stated that the ceasefire “is over.” Later on he has followed it with a milder comments along the lines of they want to make a deal and thus lowered tensions. Additionally, talks between countries are still ongoing.

ISM services for June came in at 54 as expected, down from 54. in May. The report showed improvement in employment index which returned to expansion. Additionally, prices paid component eased below the 70 level indicating softer inflation pressures. New export orders moved further into expansion. New orders and business activity though declined but are still holding at a healthy expansionary levels. Inventories dropped from above 60 to barely above 50 and this could indicate that we are about to see renewed strength in the reading in the coming months as activity quickens so those inventories could be rebuilt.

FOMC minutes from Kevin Warsh’s first meeting as Fed Chairman showed two scenarios, first one delayed rate cuts if inflation declines aand the second one immediate rate hike if inflation remains high. Minutes have a hawkish sound to them as most participants expressed their desire to remove easing language from the statement with several participants stating that they do not see current policy stance as restrictive. Fed Governor Christopher Waller stated merits of forward guidance in conducting monetary policy, adding when used flexibly. Chairman Warsh is against it so this creates a divide within Fed.

The yield on a 10y Treasury started the week at 4.48%, rose to 4.59% and finished the week at around 4.56%. The yield on 2y Treasury started the week at 4.14%, rose to 4.24% and finished the week at around 4.21%. Spread between 2y and 10y Treasuries started the week at 35bp and finished the week at 35bp. FedWatchTool sees the probability of a no change at a July meeting at around 76% while probability of a 25bp rate hike is at around 24%. WTI prices started the week at around $70 and dipped below it during the week before returning above it by the end of the week. Gold briefly fell below $4000 and finished around $4100.

This week we will have inflation data for June expected to show no change in core and easing in headline number. Additionally, we will get Chairman Warsh’s testimony in front of the Senate as well as retail sales.

Important news for USD:

Tuesday:​

• CPI​

• Fed Chair Warsh Testimony​

Thursday:​

• Retail Sales​

EUR — Euro

Member of ECB Executive Board Isabel Schnabel reiterated her cautious approach stating that although falling oil prices are welcome sign the economy is still not back to pre-war levels. She also warned that core inflation is elevated and that there are dangers of second-round effects. Schnabel is a well-known hawk.

GBP — British Pound

This was a great week for GBP as it managed to strengthen against all majors, except for NZD which was pushed up by hawkish RBNZ. Andy Burnham has been backed by 322, a curious number, out of 403 Labour MPs for the place of next party leader and will take the role of Prime Minister on July 20. Ed Miliband has the best chances to become the next Chancellor of Exchequer followed by Wes Streeting.

AUD — Australian Dollar

June inflation data from China showed CPI easing to 1% y/y from 1.2% y/y in May and lower than 1.1% as expected as inflation declined 0.3% m/m. Drops in non-food inflation and transportation fuel were the main drags while healthcare prices rose. PPI, on the other hand, rose 4.1% y/y thus reaching new four-year high although monthly figure also showed a 0.3% decline. Increases in crude oil, coal and non-ferrous metals prices as well as prices for raw materials pushed the PPI to above 4%. The divergence between what higher cost for companies and lower revenues will negatively impact profit margins.

This week we will have employment data from Australia as well as Q2 GDP and economic activity data from China.

Important news for AUD:

Wednesday:​

• GDP (China)​

• Industrial Production (China)​

• Retail Sales (China)​

Thursday:​

• Employment Change​

• Unemployment Rate​

NZD — New Zealand Dollar

RBNZ delivered a 25bp rate hike as was widely expected thus lifting Official Cash Rate (OCR) to 2.50.. This was the first hike in three years, 4 -2 vote, and was accompanied by a hawkish message as they warn about inflation risks. Inflation is expected to peak at 3.9% in June quarter, then fall to 3.3% in September quarter and finally return to 1-3% targeted range by mid-2027. Growth has been stalled in June quarter due to energy shocks but it is expected to resume in September quarter. The board is divided as two members see inflation risks skewed to the upside while four members see risks as broadly balanced. The committee agreed that further rate hikes will be necessary to prevent easing of financial conditions, but the timing of those hikes is uncertain. RBNZ Governor Breman stated that neutral rate is not known but her estimate is that it is somewhere in a 2.5-3.5% range. Given that we are only now entering that range it is another signal for more rate hikes to come.

CAD — Canadian Dollar

Employment report for the month of June showed economy add 18.2k jobs, more than 10k as expected. The unemployment rate ticked down to 6.5% while participation rate stayed the same at 65%. Average wages rose to 3.7% y/y from 3.2% y/y in May. Throwing a shade on otherwise great report is the composition of jobs as it showed that the economy added only 0.6k full-time jobs while it added 17.5k part-time jobs.

This week we will have BoC meeting. There will be no change at this meeting as with oil prices coming down and inflationary pressures being contained there is no need for bank to act and given the strong jobs report it may switch towards hawkish rhetoric.

Important news for CAD:

Wednesday:​

• BoC Interest Rate Decision​

JPY — Japanese Yen

May wages rose 3.2% y/y, slowing down from 3.6% y/y in April. Household spending declined 0.4% y/y in May after falling 0.5% y/y the previous month but dropping much less than 2.5% y/y as expected. PPI jumped 7.1% y/y in June making it the highest print in over three years. Oil and petrol, electricity and plastics prices have been the biggest contributors to overall increase.

Finance Minister Katayama stated that government is seeking ways to encourage Japan’s largest pension fund GPIF, and other pension funds, to invest more in JGBs as well as other domestic assets. JPY has gained strength on this news because if GPIF decides to allocate even a small percentage of their total assets to JGBs it will lead to increased demand for JPY and massive JPY buying.

CHF — Swiss Franc

SNB total sight deposits for the week ending July 3 came in at CHF479.2bn vs CHF474.7bn the previous week. Third straight week of rising deposits and new high for the year as SNB keeps pumping liquidity into the markets thus taming Swissy’s strength.

You can follow all economic events on the Economic Calendar page on our Website. MT server time is set to GMT+3 and if you need assistance converting MT server time to your local time you can use some of the online time converters such as WorldTimeBuddy.

Please note that this analysis should not be used as investing advice as it is only an overview of the economic events influencing the markets. Please remember that our accounts have Market Execution. Please note how Execution works during high impact news and other times of low liquidity.