The Friday Forex Takeaway – Episode 39

<h2>Key Points from This Week</h2>
<p><strong>Fed Calls for More Support</strong></p>
<p>Fed chairman Powell called on the government to offer further support during a testimony to Congress this week. Echoing his message at the June FOMC, Powell warned that the recovery process in the US will be a very long one and noted a great deal of uncertainty in the economic outlook. With risks of a second wave emerging, Powell warned that the downside risks were rising and urged the government not to pull away from fiscal support too early, instead saying that now was the time to do more.</p>
<p><strong>Trump Considering New Stimulus Package</strong></p>
<p>President Trump announced this week that he and his team were working on a new “phase 4” stimulus package due to be announced soon. There has been much debate in Congress over the need to add further support and with the Fed also calling on further support it appears the president is listening. Details are yet to be announced but some media reports suggest that the package might include a massive $1 trillion infrastructure spending package.</p>
<p><strong>COVID-19 Second Wave Fears Increase</strong></p>
<p>While equities have been supported over the week by speculation around a potential infrastructure spending package from the president, fears of an emerging second wave of the virus have been offsetting these gains. Reports of steady increases in new infections in parts of the US along with Beijing being placed back in quarantine following a fresh outbreak there, have rattled investors, raising fears over the potential for a further global outbreak as lockdowns continue to ease.</p>
<h2>Key Events Next Week</h2>
<p><strong>Eurozone &amp; UK Manufacturing Data</strong></p>
<p>The next set of factory sector data for the Eurozone and UK is due next week. These releases will eb closely watched following a small rebound over the prior month. With lockdowns having eased further since then, a further recovery higher is expected which should help add some relief. However, any unexpected weakness is likely to see both GBP and EUR back under selling pressure</p>
<p><strong>RBNZ June Meeting</strong></p>
<p>The RBNZ meets for its June monetary policy review next week and while no further adjustments are expected at this stage, the bank is likely to reiterate its message of willingness to act if necessary, to help further support the recovery. Unlikely to be too market moving for NZD unless we see any surprise action. Focus will be on the RBNZ’s view on the world economy and how this impact’s NZD export outlook.</p>
<h2>Keep An Eye On</h2>
<p><strong>Trump Headlines</strong></p>
<p>With Trump’s first 2020 election campaign rally due on June 20^th, expect a lot of coverage on the president over the weekend and into next week. Special attention will be paid to Trump’s comments regarding the COVID-19 crisis as well as the Black Lives Matter protests as well as tensions with China and his new standoff with social media companies.</p>
<p><strong><i>Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.</i></strong></p>
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