What Currency Will Overperform?

What Currency Will Overperform?

Flash Manufacturing PMI

January 24, 11:30 GMT+2

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.

The index calculates according to the purchasing managers' assessments of the business conditions' relative level, including employment, production, new orders, prices, supplier deliveries, and inventories.

The previous Flash Manufacturing PMI release on December 16 caused a 600-points plunge in GBPUSD due to the lower-than-expected actual number.

finex 19 GBPUSD.png

  • If the result is higher than expected, GBP may rise.
  • Otherwise, GBP will go lower.

Instruments to trade: GBPUSD, EURGBP, GBPJPY

 

BOC Monetary Policy Report

January 25, 17:00 GMT+2

The Bank of Canada will release its Monetary Policy Report, Rate Statement, and Overnight Rate on January 25, at 17:00 GMT+2. These releases provide valuable insight into the bank's view of economic conditions and inflation, the key factors that will shape the future of monetary policy. The BOC recently raised the key rate by 50 basis points to fight inflation. As a result, the inflation slowed down in December to 6.3% versus 6.8% in November, opening a door for the Bank of Canada to pause the rate hikes.

This time, investors expect the BOC to increase the rate by 25 basis points, hitting 4.50%.

The latest rate hike by the Bank of Canada on December 7 caused the USDCAD to decline by 500 basis points within an hour.

USDCADH1.png

  • If BOC is hawkish, the CAD may rise.
  • Otherwise, CAD will drop.

Instruments to trade: USDCAD, CADCHF, CADJPY.

 

US Advance GDP q/q

January 26, 15:30 GMT+2

The US Bureau of Economic Analysis will release Advance Gross Domestic Product (GDP) q/q, on January 26, at 15:30 GMT+2. GDP is the broadest measure of economic activity and the primary gauge of the economy's health. It measures an annualized change in the inflation-adjusted value of all goods and services produced by the economy. Experts predict the US Gross Domestic Product will gain 2.6% in Q4 of 2022. 

The last GDP release on October 27 caused a 3500-point plunge in EURUSD within a week since the result exceeded expectations by 0.3%.

EURUSDH4.png

  • If the result is higher than expected, USD may rise.
  • Otherwise, USD will go lower.

Instruments to trade: EURUSD, USDJPY, XAUUSD.

 

Similar

US Dollar Prepares for the Pump
US Dollar Prepares for the Pump

On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies. 

Uptrend in Gold Starts Now
Uptrend in Gold Starts Now

Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!

Gold and USD ahead of the Fed
Gold and USD ahead of the Fed

Yesterday, the release of the US Inflation rate came out lower than the forecasts (0.1% vs. 0.3%). The soft figures pulled the US dollar index down by almost 1%. At the same time, S&P500, EURUSD, and gold strengthened. Today, the Fed will hold a meeting at 21:00 GMT+3. The Federal Reserve is widely expected to raise the interest rate by 50 basis points.

Latest news

USD Holds the Line
USD Holds the Line

The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now. 

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