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.
UK pound goes up on Brexit agreement
On Monday, the UK pound went up because a Sunday Times report told that the United Kingdom was approaching a deal for breaking up with the European bloc and an all-UK customs pact would be part of it.
With negotiations at an impasse five months before the UK leaves the EU, traders are getting anxious and the UK pound is moving steeply on any news of a probable breakthrough.
For the last 10 months of this year the UK pound has lost nearly 3.6%.
However, on Monday, the UK pound managed to ascend by 0.3% hitting a 10-day maximum against the evergreen buck - $1.3065. Against the common currency, it rallied to 87.33 pence, which is its highest outcome since October 11.
The UK pound was backed by a report over the weekend, which told that an all-UK customs deal is going to be written into the legally binding the pact, which governs the United Kingdom’s withdrawal from the European bloc.
It would suggest an Irish "backstop" deal to dodge a hard border between the Irish republic and the UK province of Northern Ireland, isn’t required, as the Times informed. Eventually, the issue has appeared to be the key obstacle to Brussels and London agreeing a deal.
On Thursday, the previous week the UK currency had its best day of 2018 versus the evergreen buck on Thursday.
It’s believed that an agreement with Brussels on the terms of divorce will remove a big uncertainty overshadowing the British economy and the Bank of England as it attempts to tame inflation.
This week the European bloc and the UK government official have played down expectations for an inevitable Brexit deal, stressing that while a pact is close the two sides still have much to do.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
As Europe moves into recession, next week may provide us with some amazing trading opportunities. Here they are!
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.