The British monthly GDP is announced on Friday at 09:00 MT time.
5 important things this week will bring us!
- Rate statement by the Reserve bank of Australia (Tue, 07:30 MT) – Will the RBA change its interest rate? The forecasts are unclear. Some of the analysts are sure about the possible rate cut during this meeting. They mention the lower levels of GDP growth and inflation as the main reasons behind it. If the rate cut happens, the AUD will slump. On the other hand, if the RBA keeps the rate on hold and provides positive comments on the economic outlook, the Australian dollar will get positive momentum.
- Rate statement by the Reserve bank of New Zealand (Wed, 5:00 MT) – As for the second Antipodean bank, analysts expect it to keep its interest rate unchanged at 1.75%. As usual, any hawkish hints on the future step by the bank will push the kiwi up.
- Canadian trade balance (Thu, 15:30 MT) – If the actual figures of the trade balance are higher than the forecasts, the CAD will rise.
- British GDP growth and manufacturing production (Fri, 11:30 MT) – According to analysts, the level of GDP growth will stay the same, while the indicator of manufacturing production will increase by 0.1%. Higher-than-expected releases will be supportive for the British pound.
- US CPI and core CPI (Fri, 15:30 MT) – The level of consumer inflation for the US is forecast to advance by 0.4%. Its core level is anticipated to increase by 0.2%. Higher levels of these indicators will move the USD up.
- The US president Donald Trump announced the increase in tariffs on $200 billion of goods from 10% to 25% on Friday. According to his comments, the trade deal with China is moving “too slowly”. This statement hurt the risk sentiment in the market. The trade negotiations between the US and China are expected to continue on May 8 in Washington unless China cancels its delegation due to the unexpected comments by Mr. Trump.
- Also, the US president is expected to present new Iran sanctions this week. If it happens, the oil prices will go up.
- The British Prime Minister Theresa May has held secret discussions over a second referendum. It happened ahead of the meeting with the opposite Labour party to make a cross-party Brexit agreement.
- South African national elections will hold parliamentary and provincial elections on Wednesday. The market anticipates the ruling African National Congress to win and bring some clarity to the policies of the president Cyril Ramaphosa. If it happens, the African rand will strengthen.
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The US unemployment claims are out on Thursday at 15:30 MT time.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.