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.
Time to buy the world’s worst currencies
A top strategist, Charlie Robertson, said that these days we could gain from buying emerging-market currencies such as South African rand, Mexican peso and Brazilian real.
He strongly believes that these currencies are ready to reverse as they hit their bottom. In his opinion, this is the cheapest opportunity in over 20 years. Robertson’s main arguments are the upcoming weakness of the US dollar and the financial support of developing countries from the International Monetary Fund and World Bank. In addition, he said that crude oil prices may rise up to $45-50 per barrel in the mid-term with relevant rebound of the Russian ruble.
It’s hard to believe, but Charlie Robertson had already made forecasts that turned to be true. He was right about Romanian bonds in the late 1990s and South Africa’s rand in 2016. Who knows, maybe this time he is correct again.
The analyst's idea is that it's time to sell such pairs as USD/ZAR.
Let’s have a look at the USD/ZAR chart. The South African rand exceeded the 17.9 mark that equals to the pick of 2016. After that, it returned to this level again.
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.