The week ahead features more central bank meetings, with the Fed, BoJ, SNB and BoE all set to decide on the direction of their respective monetary policies. In addition, we will have a handful of market-moving macro pointers from the likes of Australia and New Zealand. But the early part of the week will be dominated by the aftershocks of the ECB’s policy decision from Thursday and fresh data from China. Here are the week’s data highlights: 

  • Monday: Chinese industrial production, fixed asset investment and retail sales
  • Tuesday: German ZEW economic sentiment and US industrial production, among a handful of other second tier data
  • Wednesday: UK and Canada CPI; FOMC and NZ GDP (early Thursday morning NZ time)
  • Thursday: Australian employment; BoJ; SNB and BoE rate decisions.
  • Friday: Canadian retail sales

Clearly, most of the attention will be on the Federal Reserve next week. A 25-basis point rate cut is widely expected, and it would be a major shock if the Fed doesn’t deliver. But some, including Donald Trump, want more than just 25 basis points. In fact, the US President has called for “boneheads” Fed to cut rates to zero or lower in a tweet this week. Understandably, with US data not deteriorating as badly as, say, Germany, the Fed is reluctant to cut aggressively and rightly so. The risk therefore is that the Fed refuses to provide a dovish outlook for interest rates. In this potential scenario, a rate cut might only weigh on the dollar momentarily. With most other major central banks already being or turning dovish, the Fed will also need to be super dovish for the dollar to end its bullish trend. Otherwise, the greenback may find renewed bullish momentum, even if the Fed cuts by 25 basis points.

As far as the other central banks are concerned, well we don’t expect too much market reaction from their actions – or lack thereof. That being said, it will be interesting to see what – if anything – the Swiss National Bank will have to say about the European Central Bank’s decision to resume bond buying, given the recent appreciation of the franc against the shared currency. The Bank of Japan, on the other hand, is unlikely to respond to the ECB’s resumption of bond buying. We think it will keep the current policy of controlling the yield curve. For one, the global economy hasn’t deteriorated too significantly to exacerbate deflationary pressures in the export-oriented Japanese economy. For another, the there’s only limited number of policy options left at the BoJ's disposal. Thus, cutting short-term interest rates further into the negative – as some have suggested – may be an option, but to be used on another occasion. Finally, the Bank of England is likely to retain its status as one of the most boring central banks out there on Thursday. Don’t expect anything – you will be disappointed. Reason? UK data has been not bad enough to warrant a cut, and inflation has not been high enough to warrant a hike.

Risk Warning Notice Foreign Exchange and CFD trading are high risk and not suitable for everyone. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. Margin and leverage To open a leveraged CFD or forex trade you will need to deposit money with us as margin. Margin is typically a relatively small proportion of the overall contract value. For example a contract trading on leverage of 100:1 will require margin of just 1% of the contract value. This means that a small price movement in the underlying will result in large movement in the value of your trade – this can work in your favour, or result in substantial losses. Your may lose your initial deposit and be required to deposit additional margin in order to maintain your position. If you fail to meet any margin requirement your position will be liquidated and you will be responsible for any resulting losses.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD holding onto range amid trade tensions, ahead of FOMC minutes

EUR/USD is trading above 1.1050, within familiar ranges. The US Senate's support of Hong Kong protesters has aggravated tensions with China. The Federal Reserve's meeting minutes are eyed.

EUR/USD News

GBP/USD is on the back foot after the Johnson-Corbyn debate

GBP/USD is trading closer to 1.29, after Labour leader Corbyn beat expectations in his debate with PM Johnson. Further opinion polls are awaited. 

GBP/USD News

USD/JPY reverses an early dip to near 1-week lows, focus shifts to FOMC minutes

Reviving safe-haven demand benefitted the JPY and exerted some follow-through pressure. A modest USD rebound helped bounce off lows ahead of the latest FOMC meeting minutes. A sustained move beyond 109.00 handle (200-DMA) needed to confirm near-term bullish bias. 

USD/JPY News

US Dollar Index extends gains to the 97.90 region, focus on Fed, trade

The greenback, when tracked by the US Dollar Index (DXY), is adding to Tuesday’s gains in the 97.90 region. US 10-year yields drop to 2-week lows around 1.75%. FOMC minutes will be the salient event later today.

US Dollar Index News

Gold climbs to near 2-week tops, beyond $1475 supply zone

Gold edged higher through the early European session on Wednesday and climbed to near two-week tops, just above the $1475 region in the last hour.

Gold News

Forex Majors

Cryptocurrencies

Signatures