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.
The US inflation: getting worse?
The US CPI and core CPI are due at 15:30 MT time on May 12.
Instruments to trade: EUR/USD, GBP/USD, USD/JPY, USD/CAD
The consumer price index (CPI) measures the majority of overall inflation. It demonstrates the change in the value of goods and services purchased by customers over a certain period. The core level does not take into account food and energy prices due to their volatility. It is not a secret that the inflation is falling right now amid the lockdown in the American cities. We have already seen a decline in CPI indicators in March. Both measures fell lower than analysts predicted: headline indicator was down by 0.4% (vs. -0.3% expected) and core figures shrugged off experts’ anticipation of a rise of 0.1% with -0.1% reported. With the situation not getting any better, we may expect even lower figures on May 12. Will we see a surprise?
• If the indicators are higher than the forecasts, the USD will rise;
• If the indicators are lower than the forecasts, the USD will fall.
Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
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.
Every week we expect many interesting events that can shake the market.