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.
US dollar moves down
On Monday, the evergreen buck lost versus its counterparts, suppressed by a stronger UK pound in the face of strengthening hopes of a UK-EU Brexit deal. Meanwhile, a firmer common currency on upbeat remarks from European Central Bank Mario Draghi also affected the greenback.
Estimating the US dollar’s purchasing potential versus its major counterparts the USD index slumped by 0.05% trading at 93.73.
The UK currency rallied because upbeat remarks from German officials drove investor optimism that the European Union and Britain would eventually come to a compromise on terms for Britain's future relationship with the EU.
The currency pair GBP/USD edged up by 0.41% hitting $1.3123.
Profits in the US currency were also kept in check by a strengthening common currency that had followed a positive assessment of the eurozone from ECB Governor Mario Draghi, who also repeated that the major financial institution’s plan to conclude its massive bond-buying program at year-end.
The currency pair EUR/USD managed to ascend by 0.15% trading at $1.1768.
An everlasting rally in emerging-market currencies compounded the evergreen buck’s timid jumpt to the week because Turkey’s currency as well as the South Africa rand managed to gain notwithstanding analysts warning further profits could be stifled by soaring US-China trade tensions.
Emerging-market currencies turn out to be more vulnerable to US-China trade conflict than other assets because foreign investors are simply repatriating funds in the face of soaring yields in developed markets, while emerging-market economies have forecasts undershot.
China canceled trade negotiations with America that were anticipated to occur this week after both nations slapped new levies on each other the previous week.
It provided little support for Japan’s trade-sensitive currency. Therefore, the currency pair USD/JPY jumped by 0.04% reaching Y112.65.
Moreover, the currency pair USD/CAD jumped by 0.24% trading at C$1.2947, neglecting a soar in crude prices that is prone to spurring the oil-sensitive Canadian dollar.
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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.