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 inches down
On Thursday, the evergreen buck dived a bit in Europe due to the fact the common currency neglected a downbeat set of factory orders in Germany, which bode ill for a rapid turnaround in the euro zone’s number one economy.
In February, new orders to German manufacturers headed south by 4.2%, which appears to be the greatest monthly dive for two years, with the sharpest decrease coming from foreign markets beyond the euro zone. In fact, orders slumped by 8.4% on the year. There are signs that the situation didn’t get better in March, especially considering that IHS Markit’s purchasing managers’ index for Germany’s manufacturing sector headed south further to a seven-year minimum in March.
News that American leader will meet China’s rival Liu He later on Thursday had a minor impact on the currency market that seems resigned to waiting for a final agreement to be hit before making conclusions. In fact, the meeting was found a sign that negotiations are getting to their final stage, although The Wall Street Journal informed that America’s insistence on keeping some levies in place on China’s goods is still a key sticking point.
Tracking the purchasing power of the major American currency versus its primary peers the USD index was nearly intact sticking with 96.688. The common currency managed to ascend to $1.1235, the UK pound surged to $1.3178.
The UK currency jumped overnight after British lawmakers dared to ban a no-deal Brexit. It’s still the default result unless the EU’s 27 members unanimously agree to extend the fresh deadline of April 12, or unless UK lawmakers revoke their formal decision to depart from the European bloc, an option, which neither of the two sides wants.
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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.