Limited top-tier economic data puts USD dynamics further into focus

Economic events this week largely focused around the FOMC meeting minutes on Wednesday, which showed “a number of participants” suggesting that QE tapering should be discussed at upcoming meetings in the event of sustained strength in incoming economic data. Despite the market reaction to the minutes, the calls by some FOMC members to discuss QE tapering provided no new information for markets as subsequent commentary by the likes of Robert Kaplan had already aired this view. Other data points saw Canadian CPI jump in April and the reopening effects spill into UK retail sales and PMIs. Next week, the economic calendar is light on major market moving events. US PCE inflation stands out as the most high profile data point on the calendar along with the latest RBNZ rate decision, while the focus will remain on central bank speakers as markets try to gauge policy-makers interpretations of the incoming economic data.

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