From persistent turmoil from the Euro area to expectations of further easing initiatives from China and the United states, the directives continue to come in thick and fast for the Australian dollar, and the week ahead promises to be little different. Locally, this week will see the focus turn to second-quarter consumer price data due for release on Wednesday. Headline inflation is expected to rise 0.6 percent in the second quarter, representing yearly growth of 1.3 percent, from a previous 1.6 percent. The RBA's preferred measures of inflation which excludes the most volatile prices on the scale, is forecast to rise 0.6 percent on quarter to represent annual growth of 1.9 percent - below the RBA's 2-3 percent target range. This round of data is of course a timely and influential gauge of inflation growth ahead the RBA's next policy meeting in early August. While slower consumer price growth provides further breathing space for the RBA, it's unlikely to represent the evidence needed to prompt Stevens and Co to further cut the official cash rate when the bank meets on August 7. A speech by RBA Governor Glenn Stevens on Tuesday will also be watched closely for any clues ahead of the next policy meeting. Local factors aside, risk sentiment from abroad will remain a dominate factor this week, with U.S corporate earnings and quantitative easing expectations to dictate demand for the U.S dollar, and by default the local unit. Expect further conjecture over near-term easing prospects from China this week with the closely watched HSBC flash Manufacturing PMI (JULY) due for release on Tuesday.

Among a host of other top-tier releases, the week ahead in the United States will see second quarter GDP take centre stage. Recent weeks have seen growth concerns from the U.S lead to a notable shift in stimulus expectations, in turn providing intermittent headwinds for the U.S dollar. Gross Domestic Product is expected to record annual growth of 1.4 percent from a previous 1.9 percent, while personal consumption data accompanying the release is expected to slide to 1.4 percent in the second quarter, from previous growth of 2.5 percent. Also on the docket this week is Markit preliminary PMI on Tuesday, Durable goods orders on Wednesday and University of Michigan consumer confidence later on Friday, while the health of the ailing housing sector will get the usual degree of attention with the release of new home sales data. We've also seen U.S corporate earnings play an important role in recent sessions which has provided intermittent support across benchmark indices. Corporate America will remain a primary directive this week with heavy weights such as Apple and Facebook due to release earnings.

Despite moderate gains across the risk spectrum, the Euro's fortunes were marred by continued adversity last week, with the shared currency outpaced by both the perceived safety of the greenback and its high-beta counterparts. The Euro closed the week at fresh two-year lows against the greenback amid a succession of Euro-era lows throughout the week against the in-form Australian dollar, and near 12-year lows against the Japanese Yen. The approval of Spain's banking bailout on Friday failed to allay broader concerns the nation may be next in line to seek a bailout, after the city of Valencia formally requested financial aid from Spain's internal government rescue fund. Spanish 10-yr bond yields spiked beyond the 7 percent region, while 5 and 30-yr yields climbed to Euro-era highs, prompting wide spread concerns that Spain will be the next on the list of bailout casualties. Among the usual headline risk flowing from the region, the macro week ahead will see the regions flagship economy Germany take centre stage with IFO series of economic conditions and preliminary inflation data for July on the agenda. Earlier in the week the European Commission will release Euro-Zone preliminary consumer confidence data which is forecast to show morale remained at subzero levels of -20, slightly lower than -19.8 recorded in June. The Markit Economics gauge of Services and Manufacturing PMI for Germany and the Euro area will also be an important driver of sentiment on Tuesday.

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