Special Consultant to the FPA
Forex News Trading Strategy for the 5th of September - 10th of September
This week began with a holiday with U.S. and Canadian markets closed for Labor Day. However, we still saw significant data out of the UK, and heard comments from the BOJ’s Kuroda.
Bank of Japan Gov. Haruhiko Kuroda basically ruled out more stimulus reduction by acknowledging the downsides of negative interest rate policy. Kuroda said "that such developments can affect people's confidence by causing concerns over the sustainability of the financial function in a broad sense, thereby negatively affecting economic activity."
Also on Monday, the UK Services PMI came in ahead of expectations. Much like the manufacturing print we saw last week, the more significant services data beat the 49.1 consensus, coming in a very solid 52.9. Ultimately, fears of an immediate economic collapse in the UK after the vote to leave the Bloc have been dialed back with job growth, activity, and confidence all showing some strength.
Coming up for Tuesday we have the RBA rate decision. The RBA is expected to keep rates on hold so any AUD movement will likely be determined by the tone of the statement. During Tuesday’s New York session, the ISM Non-Manufacturing PMI data, which has been signaling solid strength for the economy all year, will be released. Once again the data are expected to show solid strength with the consensus at 55.4 for the print. Later on Tuesday, we will see the latest dairy prices with the release of the GDT data. The most recent data has been NZD supportive with gains of 6.6%, and 12.7% for the past two prints.
Wednesday begins with the Australian GDP data for the second quarter. Q1 GDP increased more than expected at 1.1%, and was up 3.1% for the y/y. Later on Wednesday we will see the Inflation Report Hearings from the UK. Which will be followed by the Bank of Canada rate decision.
Thursday brings the third and final central bank rate decision for the week when the ECB announces the results of their monetary policy meeting. The announcement will be followed by a press conference 45 minutes later. Outside of any surprise during the announcement, we normally see the most volatility during the press conference.
Friday’s calendar is fairly light overall. It begins with inflation data out of China with the CPI and PPI prints. During New York, the latest Canadian employment figures for August are scheduled to be released. Last month the Canadian labor market failed to live up to expectations for a rebound after a very soft June, actually seeing a much sharper decline in overall employment.
Other Forex news trading events taking place this week can be found here: Forex Factory Calendar.
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