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 surges
On Tuesday, the evergreen buck rallied a bit versus its counterparts backed by an abrupt dive in the UK currency on Brexit fears as well as data disclosing a dive in the British services sector.
Gauging the American dollar’s purchasing potential versus a number of its peers the USD index surged by up to 0.17% ending up with 96.02.
The currency pair GBP/USD went down by 0.64% being worth $1.2952 due to the fact that the British services PMI index headed south to its lowest value since July 2016, driving fears about the health of the British economy with less than the two months to go until Great Britain departs from the European bloc. Losses in the UK currency versus the evergreen buck were exacerbated because fresh worries of a no-deal Brexit tacked on to the fore.
On Tuesday, British Prime Minister Theresa May told that she’s on the verge of looking for changes to the Irish backstop, although would stop short of looking for its removal from the withdrawal pact, thus driving some fears that she was wavering on her commitment to underpin the "Brady Amendment, proposing to replace the backstop with alternative solutions.
The evergreen buck was held back from dismal American services data, notwithstanding experts reaffirming the services sector was still firm.
The services side of the American economy is still performing great as the index is still staying in expansionary territory. That’s in line with the average level observed since mid-2017.
The currency pair EUR/USD went down by 0.22% being worth $1.1410 on mixed eurozone economic data disclosing a dive in retail sales, although better-than-anticipated surge in the EU’s services sector.
The currency pair USD/JPY managed to ascend by 0.09% being worth Y109.98. At the same time, the currency pair USD/CAD jumped by 0.18% hitting $1.3134.
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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.