Forex - Weekly Outlook: July 23 - July 27

© Reuters. Dollar tumbles after Trump comments

Investing.com - This week, investors will have a chance to see how the U.S. economy performed in the second quarter. Friday’s GDP report is expected to show that the economy rebounded in the three months to June, boosted by an increase in consumer spending.

Markets will also get an update on the health of the housing market, with reports due out on existing and new home sales.

In Europe, monetary policy will be in focus, with the European Central Bank expected to leave rates on hold at its meeting on Thursday, following policy changes at its last meeting.

Investors will also be monitoring developments in the intensifying global trade conflict, which has roiled markets.

U.S. President Donald Trump indicated Friday that he is prepared to slap tariffs on all Chinese imports to the U.S., worth around per year. Trump made the threat in a pre-recorded interview with CNBC that aired on Friday.

The comments came after Trump , claiming that their plans to raise U.S. interest rates risked undermining his efforts at strengthening the economy.

Trump ratcheted up his on Friday, taking to Twitter to claim that tighter monetary policy was penalizing the U.S. by contributing to a stronger dollar.

He also accused China and the European Union of currency and interest-rate manipulation that he claims has put the U.S. at a disadvantage.

The dollar fell against a basket of the other major currencies on Friday, snapping a rally that had seen it hit one-year highs in the previous session.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.77% at 94.25 in late trade, after hitting a high of 95.44 on Thursday, the most since mid-July 2017.

It was the largest one-day percentage decline in three weeks, and was enough to turn the dollar index lower for the week and for the month. For the week, the index was down 0.29% and it is down 0.11% for the month to date.

The drop in the dollar saw other major currencies regain ground, with climbing 0.67% to 1.1712 late Friday.

The dollar was sharply lower against the yen, with tumbling 0.88% to 111.46, retreating from Thursday’s six month peaks of 113.16.

The pound was also higher, with adding on 0.89% to trade at 1.3129.

, Investing.com has compiled a list of significant events likely to affect the markets.

Monday, July 23

The U.S. is to release data on existing home sales.

Tuesday, July 24

The euro zone is to release data on manufacturing and service sector activity.

Wednesday, July 25

New Zealand is to release trade data.

Australia is to produce data on consumer price inflation.

The Ifo Institute is to report on German business climate.