Forex Weekly Outlook: All Eyes On Fed Decision

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Fed Decision Conference Highlight of the Week

The Fed decision and the first press conference by new Fed chair Jerome Powell will head the events of the week. It is expected that the issue of dot plot will be discussed.

Monday 19th March: Yen Gains as Fed Decision Causes Jitters

JPY

The Yen has been taking advantage of market events over the past few days and today isn’t any different. The JPY started the day in a slow manner before recovering to lead the market after some traders began getting worried about a hawkish fed decision.

EUR/JPY plunged by 43 pips or -0.33% and now trades at 129.80; GBP/JPY also plunged but by 38 pips or -0.26% to trade at 147.33, and CHF/JPY pair is down by 31 pips or -0.28% and is currently trading at 110.94.

EUR

The EURUSD started the day lower than it ended last week, dropping by 0.1% to hit 1.2275. The EUR/USD has plunged by roughly 200 pips over the past five days.

GBP

The sterling jumped against the USD to a high of  1.4045 as it posted its biggest gain in more than a month over hopes on Brexit.

Forex Outlook For the Week: Fed Decision and Powell’s Press Conference Highlight of the Week

UK inflation data: Tuesday, 9:30.

The inflation rate in the UK is 3% with the BOE still looking into the possibility of raising the rates in May. The core inflation currently stands at 2.7% and it is expected the data to be released tomorrow will impact the decision of the bank later on.

UK jobs report: Wednesday, 9:30.

In their last report, wages went up by 2.5% y/y as expected even though it was still below the inflation level. The unemployment rate rose to 4.4%. The jobless claim fell by 7.2K back in January.

Fed decision: Wednesday, 18:00, press conference from 18:30.

It is expected that Fed Chair Jerome Powell will raise interest rate, marking his first decision since he took over last month. Powell had earlier hinted that the proposed hikes this year will serve as an avenue of gradual withdrawal of accommodation.

It is expected that there will be an upgrade to the four hikes but nothing is concrete at this time. The US Dollars will initially react to hike plot. After the statement, Powell will engage in his first press conference.

Australian jobs report: Thursday, 00:30.

The job report for the month of February will be released on Thursday. For January, the country reported a 16K increase in employment which is below the levels attained in prior months. The employment rate was 5.5%. Despite the market strength, policymakers in the country are concerned about the seemingly slow rise in wages and other household debt.

UK rate decision: Thursday, 12:00.

Back in February, the UK announced that it will raise its rates faster and earlier than initially planned. This news ultimately saw the pound surge higher. The market is expected to look into the possibility of the BOE hiking its rates by May. The reaction of Governor Mark Carney and his colleagues to the resulting figures will be interesting.

US durable goods orders: Friday, 12:30.

This data is a measure of the investment and feed into a country’s GDP. Back in January, the durable goods orders plunged by 3.6% while the core orders also plunged by 0.3%.

US New Home Sales: Friday, 14:00.

The last event of the week is the new home sales in the U.S. This data usually leads to a broader economic activity. The sales dropped in January to an annualized level of 593K though it is expected to rise above 600k for February.

Forex Signals

Our Forex Signal trading team is closely monitoring the Forex market for opportunities to trade in the week ahead.

 

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