The US dollar’s weakness offered a boost to emerging-market currencies and oil.
5 things you need to know this week!
- The speech by the European Central bank president Mario Draghi (Mon, 16:00 MT (14:00 GMT) – the ECB president will testify before the European Parliament Economic and Monetary Affairs Committee about monetary policy. His speeches make the EUR volatile.
- The Reserve bank of New Zealand financial stability report (Tue, 22:00 MT (20:00 GMT) – the inflationary pressures in November increased, however, the RBNZ did not alter its forecast to the rate changes. The tone of the RBNZ has been more dovish than usual during the last months. If it changes the course based on inflation and employment data, we can anticipate some volatility to the NZD.
- US preliminary GDP (Wed, 15:30 MT (13:30 GMT) – the economy of the US grew by 3.5% in the last quarter, higher, than the expected 3.3% by experts. The digits came as a result of positive releases of private inventory investment, personal consumption expenditures, local and state government spending, nonresidential fixed investment, and federal government spending. On Wednesday, analysts anticipate the preliminary GDP to reach 3.6%. If this data is higher than expected, it will contribute to the rise of the USD.
- The speech by the Federal Reserve Chair Jerome Powell (Wed, 19:00 MT (17:00 GMT) – the Fed Chair will make his speech on the topic “The Federal Reserve’s Framework for Monitoring Financial Stability” in New York. Yet another possibility for the USD traders to take an advantage from the volatility.
- US Federal Open Market Committee meeting minutes (Thu, 21:00 MT (19:00 GMT) – in November the Fed downgraded its assessment of the business investment level. We expect the Thursday’s meeting to shed the light on the bank’s concern about the slowdown. In addition, the hints on December’s rate hike are expected.
- Yesterday, the British Prime Minister Theresa May got the deal from the European Commission. European leaders warned Britain that there is no plan “B”. For now, the future direction of Brexit depends on whether it can be approved by the Parliament. Politicians announced the middle of December to be the deadline for this decision. If it is no deal, then it will add the uncertainties amid the expectations of the second referendum or hard Brexit.
- One of the most anticipated events of the week is the G20 summit where the US president Trump and the Chinese president Xi Jinping will meet. If the steps resolving trade tensions are taken by both sides, it will be highly appreciated by markets. However, it will make the US Dollar weaker. In addition, the members will talk about the direction of oil prices in 2019.
- The Italian government will discuss the possibility of a lower deficit target today at 20:30 MT (18:30 GMT). Tria may present different budget goals during the meeting. However, the Italian deputy prime minister is not intended to change the fiscal measures. This can add uncertainties to the future measures of the Italian deficit.
- US, Mexico, and Canada may sign the USMCA trade agreement during this week.
Have a successful week of trading!
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.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
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.