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 rallies on US-China trade deal expectations
On Monday, the evergreen buck jumped reacting to news that China and America were close to making an agreement to finish a long lasting trade conflict.
On Sunday, the Wall Street Journal informed that the US cabinet could raise most or all of its levies on China’s goods, while a summit between Donald Trump and his Chinese rival Xi Jinping to sign a final trade agreement could occur later this month.
It followed remarks from Trump the previous week that he had asked Beijing to immediately remove all duties on American agricultural products because trade negotiations were progressing well.
Assessing the purchasing potential of the evergreen buck versus a number of its primary counterparts the USD index accounted for 96.51, demonstrating its best outcome since February 22.
Investors looked past remarks from American leader who told that the major US bank’s tight monetary policy was contributing to a firm greenback and affecting America’s competitiveness.
Versus the Japanese yen, the evergreen buck surged to 111.93, which is not far from Friday’s maximum of 112.07.
The common currency went down by 0.3% hitting $1.1336, which is the lowest value since February 25. Financial markets are closely watching the ECB’s monetary policy gathering later this week for further clues on whether it intends to have its Targeted Long-Term Refinancing Operation relaunched or not.
In addition to this, the UK pound gained support on easing worries that the United Kingdom will leave the EU without a deal after Prime Minister Theresa May told the previous week UK lawmakers would vote on a delay to Brexit if they decide not to approve her withdrawal pact.
Eventually, the UK pound rallied by 0.2% hitting $1.3238, making its way towards its eight-month maximum of $1.3351 recorded the previous week.
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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.