On The Slate This Week >>> 

  • NZD Interest Rate decision and Monetary Policy statement

Forex trading this week is likely to be more driven by political unrest and rhetoric rather than actual releases. We have the German elections happening on Sunday which, several months ago, everybody was concerned about the impact of, but now Chancellor Merkel is almost certainly going to be re-elected it should provide little volatility. There are also a number of central bankers speaking this week including Yellen, Kuroda, Draghi and Carney, several at multiple times during the week. Whenever they are speaking we need to be mindful of increases in volatility as it is not uncommon for them to use these opportunities to drive currency prices either higher or lower depending on economic need. Finally, we also cannot forget the escalating tensions between US and North Korea. It is starting to look like things are getting a little out of control, and if fear creeps into the market because of it we can see currencies such as the yen and commodities such as gold increasing in value. We may also see the euro doing quite well as there may also be some fear around buying the usual safe haven yen as they could be one of North Korea’s targets if the worst happened.

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Now let’s look at the rest of the Forex trading week.

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Sunday 24th September

All day | EUR | German Federal elections

After risks earlier in the year Chancellor Merkel is now expected to have a decisive win.

Monday 25th September

2 p.m. | EUR | ECB President Draghi speaks

Although speaking a couple of times this week this is probably the more important as he testifies in front of the European Parliament Economic and Monetary Affairs Committee.

Tuesday 26 September

5:45 p.m. | USD | Fed Chair Yellen speaks

Whenever Yellen takes the stage everybody listens but after her very optimistic statement last week it’s hard to see how this will have a significant impact. The topic being discussed is Inflation, Uncertainty and Monetary policy, so it is quite topical. I can’t see any further forward guidance being released beyond last week but we could see some volatility around the speech.

Wednesday 27th September

1:30 p.m. | USD | Core Durable Goods | Prior 0.6% | Expected 0.2%

Unlikely to significantly move the market but is a good indication of confidence in the economy as these are high-priced items that either consumers or businesses only invest in if they are feeling optimistic.

9 p.m. | NZD | Interest Rate Decision and Monetary Policy statement | Prior 1.75% | Expected 1.75%

It would be a huge shock if the RBNZ changed interest rates at present and the vast majority of analysts expect this to not be the case. The RBNZ has already exhibited concerns around the value of the New Zealand dollar and with Australia last week rolling out any short-term interest rate increases it would be extremely unlikely for the RBNZ to act despite recent positive figures around both growth and inflation.

Thursday 28th September

1:30 p.m. | USD | Final GDP | Prior 3.0% | Expected 3.1%

The least volatile release when it comes to GDP figures from the US as this is simply confirming previous releases. There is expectation for a slight increase but not significant. Watch to see if this supports the hawkish comments last week from the Fed.

Friday 29th September

2:45 a.m. | CNY | Caixin Manufacturing PMI | Prior 51.6 | Expected 51.5

With China’s credit rating being downgraded last week it’s important to start watching China as the 2nd largest economy in the world, it can have significant impacts on global wealth.

9:30 a.m. | GBP | Final GDP | Prior 0.3% | Expected 0.3%

Much like the US final GDP it’s unlikely to have a material impact on the value of sterling unless we see a significant revision. At the moment sterling is far more reactive to Brexit discussions than it is economic releases.

10 a.m. | EUR | CPI | Prior 1.5% | Expected 1.6%

Probably the most important release of the week as we look to see if the Eurozone continues to strengthen economically. There are expectations for a slightly better inflation figure than last month but the release be even stronger than expect significant buying of the Euro.

1:30 p.m. | CAD | GDP | Prior 0.3% | Expected 0.3%

Canada is unique in releasing monthly GDP figures. We have seen the Canadian economy strengthen recently with continued talks around interest rate rises, this could begin to set a tone for expectations in December.

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