As far as economic and political events, this week is starting off slow and will quickly ramp up each day as we get closer to the G-7 meeting in Quebec this weekend. U.S. trade policy continues to be a main concern, propelling a risk-on sentiment in the market.
Dollar weakness subsides Monday
The dollar started off Monday morning down across the board with the euro and pound advancing earlier in the day.
The greenback was able to fight back against both currencies despite worst-than-expected factory orders for April.
EUR/USD is trading down around 1.169 after reaching 1.174 earlier Monday. Cable is also falling back after reaching fresh highs. The GBP/USD pair attempted to regain 1.34 earlier and now trades around 1.331.
Tuesday gets busy
The economic events for the week start getting more serious on Tuesday, starting with the Reserve Bank of Australia’s monetary policy statement and interest rate decision. RBA is expected to hold rates at 1.5%.
A series of services and composite PMIs for the Eurozone and the U.S. will trickle out throughout the rest of the day, with most expected to remain steady from the previous reading.
The U.S. ISM non-manufacturing PMI is expected to grow to 57.5 for May from 56.8 the previous month.
Aussie dollar still in focus midweek
The Australian dollar will be the main event as we wake up Wednesday. The Q1 GDP for Australia is due and expected to show growth of 0.8% quarter over quarter.
In the afternoon, the U.S. trade balance could impact the pairs.
Eurozone GDP Thursday
We’ll get a better idea of the Euro-area growth for Q1 on Thursday with a GDP reading. Most are expecting steady growth from the region, which has been plagued by slow growth lately.
We’ll see if that can help the euro hold up against the USD, which has experienced weeks of advances against the common currency.
Trade, N. Korea still major factors
On Thursday, preparations for the U.S.-North Korea summit next week will ramp up when Japanese Prime Minister Shinzo Abe visits The White House. He is expected to discuss the North Korean summit with Trump.
As a close neighbor, the Japanese have a vested interest in the security and peace of the region, including North Korea’s denuclearization.
Then this weekend, criticism of U.S. trade policy will likely continue at the G-7 meeting in Quebec. Although, this time possibly in front of Trump himself. The President is scheduled to attend with other leaders of the G-7 member countries.