The strong return of the US dollar, the global foreign exchange market changed last week, how will the euro and Canadian dollar change this week?

foreign exchange trading platform- last weekforeign exchange marketThe main points of interest are the safe-haven demand of the US dollar, the central bank intervention of the Japanese yen and the pick-up in inflation, the retail sales data of the British pound, the silent wait-and-see of the euro, and the weakness of retail sales of the Canadian dollar. Volatility in the foreign exchange market is expected to continue against the backdrop of global economic uncertainty and geopolitical risks. Investors need to pay close attention to next week's economic data and central bank developments to capture new developments in the market. There will be a number of key economic data releases this week, including the Chicago Federal Reserve National Activity Index, existing home sales data, merchandise trade balance, Standard & Poor's global manufacturing and services PMI preliminary values, etc. These data will have an important impact on the foreign exchange market. At the same time, speeches by officials from the Federal Reserve and other major central banks will also provide further guidance to the market.

Dollar: A strong rebound in safe-haven demand

This week, despite market expectations for the Federal Reserve's September interest rate cut and the fragility of the US labor market weighing on the dollar, the dollar's role as a safe-haven currency was once again highlighted under the impact of the global service sector shutdown and uncertainty over the Biden administration's restrictions on technology exports to China. The dollar, as measured by the dollar index, continued to rebound, breaking through the 104.00 mark. As of press time, it is now at 104.38, an increase of 0.19%.

Analyst's opinion:
Daragh Maher, head of Americas research at HSBC: "The dollar is being capitalized as a safe-haven currency, and market concerns about technology service disruptions and Biden's electoral prospects are key factors contributing to the dollar's strength."
Investment analyst Raffi Boyadjian: "Falling markets tend to favor the dollar, and the dollar's safe-haven status benefits it during times of volatility."

(One-hour chart of the US dollar index)

The Euro: A Look Before the Silence Period

The euro fell 0.16% this week to $1.0878, ending a two-week winning streak. The European Central Bank left interest rates unchanged and gave no hints of its next move, and markets remained on the sidelines ahead of a period of silence.

(One-hour chart of EUR/USD)

Analyst's opinion:
Eurozone market analyst: "The European Central Bank's quiet period has left the market without fresh impetus, and investors are seeking new trading leads."

Canadian Dollar: Weak retail sales data

The Canadian dollar was hit this week by weak retail sales data for May, which contracted faster than expected, raising the prospect of further interest rate cuts by the Bank of Canada. USD/CAD further rose to around 1.3750 and is now trading at 1.37278, up 0.19%.

Analyst's opinion:
Katherine Judge, Head of Economics at CIBC Canada: "The June CPI data does set the stage for another rate cut by the central bank, suggesting that last month's unexpected rise in inflation was just a blip in the overall deflationary trend, paving the way for the Bank of Canada to cut rates next week."

Looking ahead to next week:

The Chicago Federal Reserve National Activity Index on Monday (July 22) is expected to reflect the overall picture of U.S. economic activity.
Existing home sales data Tuesday (July 23): The performance of the real estate market could affect the trend of the dollar.
Commodity Trade Balance Wednesday (July 24): Trade data could have an impact on commodity-related currencies such as the Canadian dollar.
Standard & Poor's preliminary global manufacturing and services PMI (July 24): The performance of manufacturing and services will provide clues to the state of the global economy.
New home sales data (July 24): Further data on the housing market could impact the U.S. dollar.
Durable goods orders and preliminary second-quarter GDP growth Thursday (July 25): These data will provide key indicators of the health of the U.S. economy.
Inflation Tracked by PCE Friday (July 26): As the Federal Reserve's preferred inflation indicator, PCE inflation data will have a direct impact on the dollar.
Michigan Consumer Confidence Final (July 26): Changes in consumer confidence could affect market sentiment and currency movements.