Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
Common currency dives on Italy woes
On Tuesday, the common currency went down in the face of new worries over Italy's fiscal issues. Meanwhile, the safe haven Japanese yen managed to rally because the boost to risk appetite from the re-negotiated NAFTA deal receded.
The currency pair EUR/USD slipped by 0.41% being worth 1.1530, which is the lowest value since September 10.
The slip in the common currency showed up after head of the lower house's budget committee, Claudio Borghi told that Italy would have tackled its fiscal issues with its own currency.
The comments contributed to a clash with the European bloc over the populist government’s budget proposal seeking to ramp up spending and reduce taxes, although would increase Italy's debt and also have EU budget rules breached.
The common currency slumped versus the Japanese yen. The currency pair EUR/JPY lost 0.58% trading at 131.14.
The evergreen buck slumped from 10-month maximums versus the Japanese currency. The currency pair USD/JPY lost 0.15% trading at 113.75.
The Japanese yen was backed because market sentiment from a fresh update of the North American Free Trade Agreement actually faded. Experts are afraid that the current US presidential administration is going to take a harder line in its trade stance against China, utilizing trade deals with Mexico, South Korea, and Canada as leverage.
Tracking the evergreen buck’s purchasing potential versus a number of its key rivals the USD index surged by up to 0.28% trading at 95.19, which is the highest result since September 12.
The UK currency slipped. The currency pair GBP/USD slid by 0.43% trading at 1.2985 due to the fact that market participants were still pessimistic about prospects for Brexit talks between the European Union and the United Kingdom.
The Australian dollar declined. The currency pair AUD/USD declined 0.54% being worth 0.7186 after Australia’s major financial institution left interest rates intact at record minimums overnight, in what was a widely anticipated move.
Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.