The British monthly GDP is announced on Friday at 09:00 MT time.
Important events this week will bring us
Australia will publish its inflation figures on Wednesday at 2:30 MT time. According to the forecasts, the headline CPI will advance by 0.6%. This indicator will be closely watched by the Bank of Australia, which is considering the rate cut due to unfavorable economic conditions. Higher figures will reduce the chances of a cut and, therefore, will push the Australian dollar up.
The Fed: the current stance is appropriate
The Federal Reserve is going to have a meeting on Wednesday, January 29 at 21:00 MT time. While the market euphoria surrounding the US-China phase one trade deal shrug off the possibility of a rate cut during the upcoming meeting, it would be interesting to hear the comments by the Fed Chair Jerome Powell on the further plans including the changes to the interest rate and the path of the quantitative easing program. If Mr. Powell provides an optimistic outlook, the USD will be supported.
Will the BOE keep its tone?
The next important event this week will be the meeting of the Bank of England on January 30 at 14:00 MT time. The reduction of the Brexit uncertainties doesn’t mean the end of them, as a result, some of the analysts suggest the regulator is going to cut the current 0.75% rate. From their point of view, we may see the weaker figures of the business confidence based on the complicated future reality of the UK-EU trade relationship. Nevertheless, we recommend paying attention to the tone of the statements and the votes of the bank’s members. If more of them vote for a cut, we may expect the GBP weakness.
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
The US unemployment claims are out on Thursday at 15:30 MT time.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.