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.
Evergreen buck goes down for the third day
On Tuesday, the evergreen buck went down versus key counterparts, slumping for a third day in a row because signs of decelerating inflation cemented market hopes that the Fed will have its rates cut in 2019.
Gauging the greenback’s purchasing power against its primary peers the USD index headed south by about 0.3% showing 97.34.
On Tuesday, policymakers started a two-day gathering, widely anticipated to bring no changes to interest rates when the decision is revealed a day later.
In 2019, the major US bank changed its tune because fears over global surge as well as poor inflation made it retreat from previous estimates that it would lift rates twice this year and also be patient enough with further tightening.
However, financial markets have gone further, pricing in over a 60% likelihood that the major US bank will have interest rates cut in December.
Last Friday, the evergreen buck started its current stretch of dives against the backdrop of signs of decreasing price pressures. Additionally, inflation data uncovered with first-quarter surge numbers the previous week as well as the core personal consumption expenditures price index for March have seen the greenback rebound from near two-year maximums.
The currency pair rallied versus the evergreen buck because better-than-anticipated economic surge in the euro zone backed the euro.
Furthermore, cable was boosted on reports that cross-party negotiations between ruling Conservatives as well as the opposition Labour Party over Brexit, and Britain’s departure from the EU is demonstrating decent progress.
Tokyo markets are unavailable this week for a holiday that experts tell exacerbate volatility because of the lack of liquidity, although the Japanese yen still managed to go up to three-week maximums.
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.