Very few chances for traders to relax from here until the end of the week. A jam-packed economic calendar will deliver blow after blow from this point onwards. The Bank of Japan just kicked things off with its latest interest rate decision: a rate hike to 0.25% from 0.1%. Over the last three weeks, the Japanese Yen has regained much of the losses sustained against the Dollar this year and the rate hike will no doubt come as a welcome development for many. The chapter hasn’t closed on the pair just yet however, as the Federal Reserve is set to deliver its own interest rate later today, adding another page to the ongoing interest rate battle.
But enough of the Yen. The Australian Dollar continued to slide this morning after lower-than-expected CPI data, down almost one percent at the time of writing. High inflation numbers were the one guardrail potentially limiting further downside, forcing the Reserve Bank of Australia to maintain high rates. Given the figures published this morning it seems this last defence is crumbling. Tomorrow attentions will shift to the Bank of England, whose next interest rate decision is anyone’s guess. Current odds favour a 25 basis point cut although this is far from priced in.
Almost too much to mention on the economic calendar over the next three days. Besides the aforementioned central bank decisions, traders will also have to contend with manufacturing PMIs from China, the EU, the UK, the US and Canada. On top of that, unemployment and inflation publications will continue to make the rounds today and tomorrow but the pièce de résistance arrives on Friday in the form of Non-Farm Payrolls.
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