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 strengthens on Brexit vote defeat
On Wednesday, the UK currency managed to strengthen after a dive overnight when the British main legislative body overwhelmingly voted down the country’s Prime Minister Theresa May's Brexit agreement, thus contributing to uncertainties surrounding Great Britain’s withdrawal from the EU.
As a matter of fact, the currency pair GBP/USD hit 1.2862 having tumbled to 1.2667 late on Tuesday.
On Tuesday, the UK parliament voted 432-202 against her deal, which appears to be the worst parliamentary defeat for the country’s cabinet in recent UK history.
The UK pound had gone down over 1% versus the evergreen buck in the wake of the vote, before bouncing off because the sizable defeat for the country’s Prime Minister was making the United Kingdom pursue different options.
However, there’re also fears that the given result may provoke political upheaval, which could result in a disorderly Brexit.
As some financial analysts explained, while the margin of Prime Minister’s loss appeared to be a surprise, but the defeat itself was something financial markets had been pricing in for a long time. As a result, traders covered their short positions in the UK currency following the vote.
March 29 turns out to be the deadline for Brexit, although with the clock rapidly ticking down an extension of the deadline currently seems more probable.
The UK pound was nearly intact versus the common currency. The currency pair EUR/GBP demonstrated a reading of 0.8874.
The euro stood still versus the greenback. The currency pair EUR/USD showed 1.1419.
As for the Japanese yen, it surged a bit versus the evergreen buck. The currency pair USD/JPY went down by nearly 0.12% being worth 108.53.
Gauging the evergreen buck’s actual purchasing power against its main peers the USD index tumbled by about 0.18% being worth 95.50.
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.