Next week, the financial market will usher in a series of key events, especially the minutes of the Federal Reserve meeting and the July 9 tariff exemption deadline, which may cause large fluctuations in the foreign exchange market. The policy directions of central banks in various countries are obviously divergent, and the US dollar, British pound, Japanese yen, euro, Australian dollar and Canadian dollar are all facing their own interest rate or data pressures. Traders are focusing on whether the Federal Reserve hints at a rate cut, whether the UK GDP boosts confidence, and the policy trends of the Reserve Bank of Australia. Overall, the market is tight and sentiment is volatile. Once there is any disturbance, the exchange rate may react quickly.

USD: Policy minutes and tariff timeline will guide direction

Next week, the Federal Reserve will release the minutes of the last FOMC meeting, and the market is paying close attention to whether it will send a signal of possible interest rate cuts in the future. Analysts pointed out that if the minutes are dovish, it means that policymakers are cautious about the economic outlook, and the US dollar may face correction pressure; on the contrary, if the necessity of maintaining high interest rates is emphasized, it is expected to boost the strength of the US dollar. Although the US macro data next week is limited, the previous June non-farm payroll data was strong and the unemployment rate fell, providing some support for the US dollar.

In addition, July 9 is the deadline for tariff exemptions set by the Trump administration. Analysts believe that if no agreement is reached with major trading partners by then, market expectations will quickly reflect the rise in risk aversion, and the US dollar may benefit, but it may also trigger sharp fluctuations in the foreign exchange market.

GBP: Economic data and policy divergences exacerbate volatility

The UK will release its GDP data and manufacturing output for May next Friday, which will become the key variables affecting the trend of the pound. Analysts believe that if the data shows that economic activity is picking up, it may support the pound; otherwise, it will increase concerns about the weakness of the UK economy.

At the same time, there are clear divisions within the Bank of England. Monetary Policy Committee member Alan Taylor pointed out the existence of cracks in the labor market and advocated up to five interest rate cuts by 2025, which is a clear deviation from current market expectations. Analysts believe that such dovish remarks may drag down the performance of the pound, and the market will also pay close attention to whether more officials follow up and form a consensus on the policy path shift.

Yen: Policy expectations and external risks intertwined

Although the Bank of Japan has not released any major data, recent statements by top officials have caused the market to reassess the direction of its policy. Governor Kazuo Ueda said that underlying inflation was slightly below 2%, while board member Sou Takada directly pointed out that the current rate hike is just a pause and policy tightening may still occur in the future. Such remarks are interpreted by the market as implying hawkish tendencies, which helps the yen remain strong.

However, the uncertainty of the Japan-US trade negotiations remains a major risk factor. Analysts believe that if no agreement on tariffs can be reached before July 9, the yen may be pushed up by rising risk aversion, while it may also be under the pressure of uncertainty brought about by policy games.

Euro: Slowing inflation and confidence index will guide expectations

In the eurozone, Germany's HICP rose by only 2% year-on-year in early June, lower than the expected 2.2%, indicating that inflation momentum has weakened, weakening the basis for the European Central Bank to tighten policy. The market will pay close attention to the Sentix Investor Confidence Index to be released next week. The performance of this indicator will become an important reference for judging the economic sentiment in the eurozone.

Nevertheless, the European Central Bank President Christine Lagarde stressed that the euro will continue to deviate from the inflation target with a strong response, and her tone was slightly hawkish, which provided short-term support for the euro. Analysts believe that if the Sentix index improves, it may provide an opportunity for the euro to recover, otherwise it will continue to be weak.

Australian dollar: interest rate decision in focus

The Reserve Bank of Australia (RBA) will hold an interest rate meeting next week. The market has currently factored in an 84.6% probability of a rate cut, and the expectation of three rate cuts this year is still brewing. Analysts believe that if the statement further confirms the pace of easing, the Australian dollar may be under pressure; but if the tone is cautious and the rate cut is suspended, the Australian dollar may recover from its short-term weakness.

Although the manufacturing PMI in June was slightly lower than expected, it was still above the boom-bust line (50.6), indicating that the manufacturing industry has not yet fallen into recession. However, analysts believe that the trade surplus in May has shrunk significantly, suggesting that external demand has weakened, and we need to be vigilant about the pressure on the Australian dollar.

Canadian Dollar: A Triple Event Driving the Market

In Canada, June employment data and Ivey PMI will be released next week, both of which will directly reflect the vitality of the Canadian economy. If the employment data shows strong resilience in the labor market, the Canadian dollar may be boosted; if the PMI is higher than the previous value, it will also enhance market confidence.

In addition, the OPEC meeting is expected to be held on July 5, and the expected adjustment of crude oil production and prices will have a key impact on the trend of the Canadian dollar. As a resource-based currency, the Canadian dollar is extremely sensitive to the energy market, and traders will pay close attention to the results of the meeting to determine the future direction of the market.