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 is suppressed by German surge fears
On Thursday, the common currency nursed losses versus the evergreen buck having slumped to a 22-month minimum on a shocking dive in a leading gauge of economic activity in Germany, boosting fears a deceleration in the EU’s number one economy.
In April, German business morale decreased, bucking hopes for a minor improvement due to the fact trade tensions put pressure on the German economy, thus leaving domestic demand to underpin decelerating surge.
The evergreen buck went up to a 23-month peak of 98.189 versus a group of major counterparts overnight having surged over 0.5%, mostly backed by the euro's weakness. By the way, the index last traded a bit lower, demonstrating a reading of 98.096.
In fact, yesterday's strength of the evergreen buck was quite exaggerated by the weakness in other countries, except America, as some analysts explained.
The common currency hit $1.1153, having faced its greatest one-day dive versus the evergreen buck since early March when the ECB pushed back its plans for the first post-crisis interest rate lift.
Besides this, the euro also decreased by about 0.4% versus the Japanese yen overnight, hitting 125.125.
The Japanese yen headed south to a 2019 minimum of 112.40 yen per greenback for the last session, with investors eyeing a BOJ policy decision later on Thursday for trading prompts.
The BOJ is anticipated to keep monetary policy on hold on Thursday and forecast that inflation is going to fall short of its 2% objective for three more years, indicating that its huge stimulus will persist for the near future.
The evergreen buck dived a bit versus the Japanese yen, hitting 112.12 yen.
As for the Australian dollar, it stood still, sticking with $0.7017.
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.