Macroeconomic Outlook for Next Week: Powell Will Appear Under Great Pressure

On July 19, in the coming week, the manufacturing and services PMIs in Europe and the United States will provide any signs regarding the impact of Trump's tariff policy. On the Central Bank front, the Fed is entering a quiet period before the July interest rate meeting, but the Fed Chairman Powell, who has recently been caught in a storm of public opinion, will make an appearance, and market participants will hold their breath to see if he will respond to Trump's recent attacks. The European Central Bank will announce its latest interest rate decision. On Tuesday at 20:30, Fed Chairman Powell will deliver a welcome speech at a regulatory meeting; on Thursday at 20:15, the European Central Bank will announce its interest rate decision; at 20:45, ECB President Lagarde will hold a monetary policy press conference; on Thursday at 20:30, initial claims for unemployment benefits in the U.S. for the week ending July 19 will be reported. Reports this week indicate that Trump has discussed the idea of firing Powell with other Republicans. However, he quickly downplayed these discussions, stating that it is 'highly unlikely' he would fire Powell. If Powell insists on defending the independence of the Fed and reiterates that patience should be maintained while waiting for more data to show the impact of tariffs, then the dollar is likely to extend its recovery. That being said, it is still too early to start discussing a bullish reversal for the dollar. Although this global reserve currency has reacted positively to recent tariff-related headlines, if tariffs begin to exacerbate concerns about an economic recession, traders may still start reacting as they did in April, which is to sell the dollar.