Fed Chair Jerome Powell’s comments on the Jackson Hole Symposium resulted in the worst weekly candle in US500 since June.
US PCE May Soar Soon
What will happen?
The United States Bureau of Economic Analysis will release monthly Personal Consumption Expenditures (PCE) on June 30, 15:30 GMT+3. PCE Index is quite similar to Consumer Price Index (CPI). The only difference is that CPI excludes foods and energy. Food and energy can take up to 25% of PCE, but they are highly seasonal. Without these volatile components, investors consider PCE a more accurate inflation indicator.
Why is it important?
Traders keep a close watch on PCE because of the rumors that this is the Fed’s favorite inflation measure. The release in May matched the expectations. However, the EURUSD pair moved 400 points higher and 480 points lower the same day. This time volatility may be the same (or higher) as the inflation in the US is at a 40-years high. You would have earned around $400 per trade if you traded one lot.
How to trade on the US PCE release?
The results will have an impact on all the USD pairs.
- If it turns out to be higher than expected, the USD will rise.
- Otherwise, USD will fall.
Check the Economic Calendar
Instruments to trade: USDJPY, USDCAD, EURUSD.
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 United States will publish the Inflation Rate and Core Inflation Rate, also known as US CPI and Core CPI, on August 10 at 15:30 GMT+3.
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.