Expectations surrounding monetary policy in Japan and the US are increasingly seen as likely to affect foreign exchange markets. With the second preliminary GDP estimate and major indicators from the ECB, the UK and the US due this week, market reactions are expected.
Among the economic indicators scheduled for release from 7 to 11 September, those from Japan, the US and Europe will attract attention, with expectations for monetary policy seen as likely to drive market trends.
Japan's April-June second preliminary GDP estimate is expected to show growth of 0.4% quarter on quarter, or 1.8% annualized. While the first preliminary estimate pointed to weak capital investment, corporate statistics indicated resilience in investment, raising the possibility of an upward revision in the second preliminary estimate. If the figure is viewed as an upside surprise, expectations for an additional rate hike could strengthen ahead of the Bank of Japan's policy meeting.
The European Central Bank is expected to raise its policy rate by 0.25%. The euro's direction could be influenced by President Lagarde's press conference and the outlook she presents.
In the US, August CPI is expected to rise 0.4% month on month, with core CPI up 0.2%, while signs of renewed tariff effects are emerging. An upside surprise could ease expectations for Federal Reserve rate cuts and support dollar buying, while a downside surprise could strengthen rate-cut expectations and weigh on the dollar.
Major indicators from China, Turkey and the UK are also scheduled for release, increasing overall attention on the foreign exchange market.