The main takeaways for me last week were that the FOMC of the US is likely to pause (for at least one meeting) its current interest rate cutting cycle and the Bank of Canada is musing on whether to join the central bank bandwagon and cut Canadian interest rates at its next meeting.
This week I shall be following closely the currency combinations of AUDNZD, EURGBP and USDCAD, as there are several data announcements which could affect these pairs. There are also potentially market-moving speeches from new ECB president Lagarde and Bank of England governor Carney.
First up, ECB president Christine Lagarde will speak in Berlin on Monday evening. The market will be analyzing her speech for policy clues.
Tuesday morning and the Reserve bank of Australia is expected to keep interest rates on hold at 0.75%, signaling a pause in its dovish cycle. US ISM non-manufacturing data is the main event of the afternoon and analysts are looking for a rise to 53.4 for October versus the September reading of 52.6. New Zealand employment numbers are released late Tuesday evening and the consensus is for a rise in New Zealand unemployment (Q3) to 4.1%.
Thursday and the focus moves to Europe as the EU Commission issues its economic forecasts. The Bank of England will deliver its interest rate announcement with UK rates expected to stay on hold at 0.75%. The Bank of England will also release its latest inflation report.
Friday’s main data comes in the from of a Canadian employment report and US University of Michigan consumer sentiment index. Expectations are for a net change in employment of 10,000 new jobs created in Canada with the unemployment rate static at 5.5%.
The last two Canadian employment reports have been stellar. There may, therefore, be some currency volatility around this release depending on which side of 10,000 the actual number is. The University of Michigan sentiment index released later in the afternoon is considered a timely indicator of consumer confidence. November’s figure is expected not to deviate from last month’s 95.5.
Good luck and good trading! Ben Robson
Ben Robson is the CEO of Spectrex Commodities and author of Currency Kings- How Billionaire Traders Made Their Fortune Trading Forex And How You can Too.
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