GDPs and Rate Decisions
Over the next few weeks, the major events in the Forex market will be GDPs and rate decisions by major central banks. Let’s see what’s ahead.
The Japanese Yen was one of the biggest losers overall in the market in October as risk-friendly vibes returned to the market. It lost value against its major competitors like the USD, EUR, and the GBP and is likely to continue lower as the BOJ is expected to leave interest rate at its current level. Yet spotting a break in its sell-off, the Forex Signal Trading Team sent a signal to sell the USD and buy the JPY on October 25th at 112.31 and the trade proceeded to reach all three of our Targets.
Prior, we also sent a Forex signal to sell the EURJPY on October 23rd at the entry point of 128.74, which also proceeded to reach all three of our Take/Profit targets.
The sharp decline in the U.S. equities markets has led to a decrease in demand for the greenback which has caused the currency to lose value against some of its competitors. The trend might change if the USA NFP data comes out favorable on November 2nd.
Major events the rest of October and November
Euro-zone GDP (Tuesday, October 30)
This GDP will have a significant impact on the price of the shared currency which has slipped following hard discussions about Brexit. The initial GDP data would not include data from Germany and a growth of +0.4% is expected to be recorded in the third quarter of the year, similar to what was achieved in the second quarter of the year.
BOJ rate decision (Wednesday, October 31)
The Bank of Japan is considered the most dovish central bank among the developed countries. It is expected that the bank will leave the interest rate at its current 0.1% as it continues to stock to its 10-year yields at low levels.
BOE decision (Thursday, November 1)
This is one of the most important events as the Bank of England will publish its rate decision while also making its Quarterly Inflation Report (QIR) public.
The announcement will be followed by a press conference by Governor Mark Carney and some of his colleagues. It is expected that the BOE will leave its decisions unchanged with the interest rate currently at 0.75% and their QE program at 435 billion pounds. The country’s Monetary Policy Committee (MPC) agreed to maintain its current policy during their last meeting and the same is expected to happen this time around. Any change in that will lead to an immediate reaction by the GBP.
Growth forecast could go in any direction due to the current uncertainty surrounding the Brexit negotiations with the EU. The BOE is looking to rate interest rates slowly, with two hikes expected to take place next year.
US Non-Farm Payrolls (Friday, November 2)
The all-important US jobs report is one of the events that would happen at the start of next month. Salaries in the country have been stable over the past few months while the change in jobs has been volatile recently. The two figures will compete to get attention in the next NFP data. Last month, 134K jobs were gained in the US which is worse than had been expected while the wages grew by 0.3% m/m and 2.8% y/y/. Unemployment fell to a nearly 50-year low of 3.7% even though the participation rate dropped to 62.7%
Jobs gained is expected to reach 191K for October while wages will experience a slower growth of 0.2%. The unemployment rate meanwhile is expected to rise to 3.8%. The data published would play a role in shaping the Fed’s policy.
Other Important Events
Other important events in November include FOMC Interest Rate Decision (Thursday, November 8), Japanese GDP (Tuesday November 13), and the Eurozone core CPI (Friday, November 16).