The dollar is surrounded, but not defeated

Last week the dollar fell against European opponents. The currencies were influenced by the general market sentiment, that has developed in favor of purchases of risky assets. Forgetting Brexit stock indexes plunged into euphoria. Only by the end of the week European markets went out of the race, being under the influence of the tragic events in Nice. However, as a rule, factors like these are played fairly quickly, after which investors are switching to the usual drivers.
A good recovery we have seen in the pair GBP/USD. Pound was supported by the resolving of the political situation in the country, where there was a change of the Prime Minister, although it was expected that this process will continue until the autumn. Meanwhile, the Bank of England "spared" the currency, hinting at easing during the next meeting. In addition, the recent collapse, the British currency has settled at attractive levels for purchases. These factors, coupled with the widespread demand for higher-yielding assets fueled interest in the pound, which rose from lows below 1.29 to the area of ​​1.33, recovering from losses from the previous week.

Friday's American statistics helped the dollar somewhat to rehabilitate. In June, retail sales reflected the significant growth - an indicator excluding autos jumped to 0.7% from 0.4%. Meanwhile, core inflation has reached the forecast level of +0.2%. In response to releases, the dollar added to the price. However, in fact, there is nothing enchanting in these figures. Retail sales increased mainly due to the downward revision of the May values, and the main CPI remained at 0.2% instead of the expected 0.3%. So that the current bullish momentum may soon exhaust itself. In addition, the Fed is now in the background, and the focus is on the central banks, which are expected to launch easing - the Bank of England and the Bank of Japan.
Next week there will be a meeting of the ECB. However, markets do not expect easing from the regulator in response to the risks that accompany Brexit. First, even the Bank of England refrained from adopting stimulus measures in the past week. Second, in the financial markets it is not panic observed, which would indicate major impact from Britain's exit. Finally, in March, the regulator introduced a wide range of measures, the effect of which has not yet manifested itself in full volume. Thus, I do not expect any serious pressure on the euro in the light of this event.