This week, after the non-agricultural super week, the market still faces multiple challenges:
On Tuesday and Wednesday, Fed President Bob will go to Capitol Hill to give semi-annual testimony on monetary policy. This will be a highly watched event in the market, as Paul's remarks may have a direct impact on market expectations.
On Thursday, the US CPI data for June will be released, which is a key economic indicator to determine whether the Fed will cut interest rates in September. The market generally expects the overall CPI annual rate in June to fall from 3.3% in the previous month to 3.1%, while the monthly rate is expected to rise slightly to 0.1%. The core CPI annual rate and monthly rate are expected to remain at 3.4% and 0.2%.
Given that the price sub-indices in the ISM manufacturing and non-manufacturing PMI surveys have both declined, analysts believe that the risk of CPI data next week may be biased to the downside. If inflation slows further, it may strengthen the market's expectations that the Federal Reserve will cut interest rates twice this year, which will put pressure on the US dollar.
In his semi-annual monetary policy testimony, Powell is likely to maintain his dovish stance, which could put further pressure on the dollar and increase the likelihood that the dollar faces a greater risk of a correction.