U.K’s GDP Numbers for Q2 and June Take Center Stage

This week focuses on GDP reports and employment numbers. Investors will be looking at the U.K’s key figures as the country is set to release its latest GDP numbers and employment reports. The United States will also release consumer inflation and retail sales numbers, while Australia’s employment report is another area of focus for investors. 

JPY Endures a Torrid Week as Japan Enters Recession

Japan posted a third straight decline in its GDP last week, with its economy slowing down by 0.6% in the second quarter. Two consecutive declines show that the economy is now officially in a recession, despite creating an impressive 418,500 jobs compared to the estimated 395,000. The declining GDP saw the Yen perform woefully against most of its pairs. The JPY was down against the USD, CAD, CHF, and EUR. Its only positive performances were against the Pound Sterling and the NZD.

Bank of England

The Bank of England didn’t make any surprises in its announcements last week. The BOE held rates at 0.1%, though the decision wasn’t unanimous. As such, the GBP was one of the worst performers of the week, losing out against other major currencies except for the Kiwi. 

U.S Manufacturing

The U.S manufacturing sector has good news last week as the ISM Manufacturing PMI went up by 54.2 in June, up from 53.6 the previous month. A reading above the 50-level points shows there is an expansion in the sector. The NFP slowed down to 1.76 million after rising by 4.8 million the last time. Still, it was better than the 1.53 million predicted by analysts. The unemployment rate dipped to 10.2% from 11.1%, beating the estimate of 10.5%. 

Forex Weekly Outlook: August 10-14

UK Employment Report: Tuesday

Analysts are preparing for another employment decline in the U.K. The unemployment rate was pegged at 3.9% for the past three consecutive readings. Still, it is expected to rise to 4.2% in the upcoming July readings.

U.S. Inflation Report: Wednesday

In June, CPI rose by 0.6%, which ended a nasty streak of three consecutive drops. For July, the CPI is expected to increase by 0.3%, while the core estimate of 0.2% will end three straight declines. 

UK GDP: Wednesday

The United Kingdom releases its quarterly and monthly GDP figures on the same day. In the first quarter, GDP dropped by 2.0%, which shows the economic effects of the Covid-19 pandemic. Investors are now getting ready to experience an economic drop of 20.5% in Q2, which could seriously affect the GBP. In May, the U.K’s economy went up by 1.8%, which is way below the 5.5% estimate. For June, analysts are estimating an 8.1% growth in the GDP. 

U.S. Retail Sales: Wednesday

Retail sales went up by 7.5% after rising by 17.7%. The core retail sales also look good after gaining 12.4% and 7.3% in May and June. 

Australia Employment Report: Thursday

Job creation in Australia was more robust in June, with the country recording 210,800 jobs in that month after recording a loss of 227,700 in May. However, the July gains are expected to be less, at 30,000 jobs. The Australian unemployment rate went up to 7.4% in June, up from 7.1% in May. Analysts are expecting it to rise to 7.8% when the July numbers are released.