Markets will turn their attention to the Federal Reserve's preferred inflation gauge next week as investors assess whether price pressures remain persistent enough to justify keeping US interest rates elevated.
Wednesday's Core PCE report will be the week's headline event. The monthly reading is expected to accelerate to 0.3% from 0.1%, potentially reinforcing the view that inflation is proving more resilient than policymakers would like. A stronger-than-expected reading could push back expectations for future Fed rate cuts and provide fresh support for the US dollar.
The inflation report will be released alongside updated estimates of US economic growth, durable goods orders and consumer spending, offering investors a broader picture of the health of the world's largest economy.
Our focus this week will be on Alpari's USDInd, which may be preparing for a larger breakout move as markets reassess the outlook for US inflation and monetary policy.
Markets will closely monitor the Federal Reserve's preferred inflation gauge next week as investors reassess expectations for US monetary policy. Alongside Core PCE, markets will also receive fresh updates on US economic growth and consumer spending, while business confidence data from Germany and GDP figures from Canada may provide additional insight into the global economic outlook.
Tuesday, August 25th: Germany Ifo Business Climate
Germany's closely watched business sentiment survey could provide fresh insight into the outlook for Europe's largest economy and influence the euro.
Wednesday, August 26th: US Core PCE, GDP and Personal Spending
The Fed's preferred inflation gauge will be the week's key release. Together with revised second-quarter GDP and consumer spending data, the reports could significantly influence expectations for future Federal Reserve policy and the US dollar.
Wednesday, August 26th: US Durable Goods Orders
Durable goods orders will provide another snapshot of business investment and manufacturing activity in the United States.
Friday, August 28th: Canada GDP
Canada's second-quarter GDP figures may shape expectations around future Bank of Canada policy decisions and drive volatility in the Canadian dollar.
Friday, August 28th: US Non-Farm Payrolls Annual Revision
The annual revision to US payrolls data could alter investors' assessment of labour market strength and influence expectations around the Federal Reserve's policy outlook.