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.
Greenback leaps vs. its rivals
On Friday, the evergreen buck was braced for a weekly loss versus its counterparts notwithstanding a leap due to the fact that investors discussed the likelihood of the American government shutdown.
Measuring the purchasing potential of the greenback against its main counterparts the USD index acquired 0.70% demonstrating 96.95.
On Friday, American leader told that ahead of a midnight deadline a long government shutdown would be real. This scenario will come true if the US legislative body fails to pass spending legislation, including $5 billion to have his border wall funded.
The firm profits for the evergreen buck arose even as a mostly negative American economy powered some fears about economic surge.
As a matter of fact, the country’s gross domestic product grew at a 3.4% annual rate for the July-September period. That’s what the Commerce Department disclosed in its final forecast, which appears to be below a previous one of 3.5%.
Moreover, the Federal Reserve's favorite inflation gauge, the personal consumption expenditures price index without energy and food managed to acquire 1.9% for the 12 months through November.
Apparently, core PCE prices turned out to be a bit weaker-than-anticipated, hinting that the key US bank might freeze its rate lifts in the first quarter without being concerned about inflationary pressures.
Early this week Federal Reserve Chair Jerome Powell told that monetary policy verdicts would depend on data. He also emphasized that rate lifts would be put on hold if inflation dives below the major bank’s 2% objective.
The evergreen buck was also underpinned by a slump in the common currency as well as a dive in the value of the UK pound.
The currency pair EUR/USD went down by 0.67% hitting $1.1369, while GBP/USD slipped by 0.15% ending up with $1.2639.
USD/JPY gained 0.04% trading at Y111.32.
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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.