Key Events That Could Shape the Dollar This WeekU.S. Dollar Currency IndexTVC:DXYmehrshad31đşđ¸ Key Events That Could Shape the Dollar This Week Three major catalysts are on the radar for USD traders: đ ADP Employment Report đ° Advance GDP (Q2) đ§ Fed Chair Powellâs Speech Additionally, ongoing trade developments with the EU may add to volatility. đ 1. ADP Employment Report The July ADP report is forecast to show 82K job additions. While this may seem consistent with recent NFP strength, several red flags suggest growing labor market weakness: Decline in labor force participation Slowing wage growth Emerging contraction signals in the services sector Even if ADP meets expectations, it may not reflect broad-based labor market health. Historically, ADP and NFP have often divergedâso the market reaction may be muted unless the data surprises meaningfully. đ° 2. Advance GDP (Q2) Q2 GDP is expected to show modest growth, possibly supported by: Higher tariff revenues boosting government income A weaker dollar improving export competitiveness Reduced imports due to elevated import costs However, much of this growth is likely nominal rather than real. With inflation remaining sticky, headline GDP may be inflated by price effects rather than true economic expansion. Real GDP could remain flat or weak. đ§ 3. Fed Chair Powellâs Speech This is arguably the most market-sensitive event of the week. Goldman Sachs and other major banks believe the recent resilience in U.S. data lowers the chances of a rate cut at this meeting. However, political dynamics could add nuance: With Donald Trump actively campaigningâand reportedly pressuring the Fed to ease rates to boost exports and growthâPowell may face a fine balancing act in his tone. Markets will dissect every word for clues on future policy. đ U.S.-EU Trade Developments The U.S. recently announced a new trade agreement with the EU, including a 15% tariff on selected European imports. In the short term, this could be dollar-supportive, as it: Favors domestic producers Reduces reliance on imports Potentially improves the trade balance Yet over the longer term, such tariffs can be inflationary and disrupt global supply chainsâpossibly complicating the Fedâs decision-making. â ď¸ Final Thought In times of policy uncertainty, markets lose their predictability. Tariffs, in particular, often have a stronger and more immediate impact than calendar-based economic data. As a result, traders must monitor trade-related news and tariff decisions just as closelyâif not moreâthan traditional economic releases in order to stay ahead of market direction and central bank decisions.