FX Week Ahead Overview:
- The RBA rate[1] decision on Tuesday will produce another rate hike, while the ECB rate[2] decision on Thursday will pave the path to one.
- The May Canada jobs report is likely to produce another strong reading, giving the BOC more ammunition for further rate increases.
- Incoming US inflation data are likely to only show modest signs of disinflation, potentially revitalizing Fed rate hike odds and thus helping the US Dollar[3].
For the full week ahead, please visit the DailyFX Economic Calendar[4].
06/06 MONDAY | 21:00 GMT | GBP Boris Johnson No-Confidence Vote
A series of missteps and public embarrassments – from ‘Partygate’ to being booed at a Jubilee event – UK Prime Minister Boris Johnson is facing a snap no-confidence vote late in the day on Monday. Prediction markets suggest that Johnson will survive the vote, but the margin of victory is key: while only 180 votes are needed to continue on as prime minister, anything fewer than 260 may be considered a sign of weakness. With a cost of living crisis growing day-by-day and by-elections showing the Tory party falling out of favor, Johnson’s time as prime minister may be running out, regardless of Monday’s outcome.
06/07 TUESDAY | 04:30 GMT | AUD Reserve Bank of Australia Rate Decision
The RBA surprised markets with a 25-bps rate hike in May, eschewing conventional wisdom that policymakers would wait until after Australian federal elections to begin their rate hike cycle. But with the Australian unemployment rate at multi-decade lows – below the RBA’s projected level for year-end 2022 – as well as inflation rates pressing higher, the RBA has decided that swifter action is needed. Another 25-bps rate hike is anticipated (bringing
