The Week Ahead for Forex

The Week Ahead for Forex


The Week Ahead in Forex

The  Federal Reserve’s decision to delay an interest rate hike sets the tone for what could be a volatile week for traders and investors.

For the week of September 20 to September 25, central banks and economic leaders will likely react to the Fed’s statement on Thursday that global economic factors (without specifically mentioning China) had factored into the rate decision.

Here are the top stories to watch this week.

This Week’s Key Events

September 20

In a low turnout election — Greek voters again elected Alexis Tsipras’s left-wing Syriza into power. This was the nation’s fifth election in six years. The nation remains in turmoil after defaulting on its international debt earlier this year. The euro could continue its slide against the greenback in the wake of Sunday’s vote on Greece. The election had little to do with who is the head of the nation’s leadership, and more to do with the faith that Greeks have lost in their politicians. Following Syriza’s decision to recognize the severity of its situation and cut a deal with creditors, Greeks have largely lost faith in every political party and its financial prospects. The news will likely affect the EUR/USD during Monday trading.

September 21

On Monday, the USD/CAD will be in focus when Bank of Canada Governor Stephen Poloz delivers a speech called Riding the Commodity Cycle: Resources and the Canadian Economy in Calgary. The speech will center on the impact of falling oil prices on the Canadian economy and its impact on the central bank’s views on monetary policy. Oil prices will remain in focus this week following the Fed’s decision and broader concerns about global demand.

September 22

On Tuesday, China will announce the Caixin Manufacturing PMI Flash report for the month of September. The update will provide greater transparency into the nation’s economic growth. In August, the PMI data indicated that the country’s manufacturing sector fell at the fasted pace in more than six years. Any further slowdown will likely affect the USD/JPY and the AUD/USD, as both the Japanese and Australian economies rely heavily on economic trade and development from China.

September 23

On Wednesday, European Central Bank President Mario Draghi will testify at European Union headquarters. The central bank is under increased pressure from bureaucrats to further cut interest rates after the Federal Reserve’s decision to maintain its zero-interest-rate policy (ZIRP). With the ECB set to meet on monetary policy on October 10, the country  under pressure and could trigger a rate cut as soon as October 10 when the Monetary Policy meeting takes place in Brussels. Confidence has remained uneven among manufacturers across the continent, as broader concerns about Germany accelerate. The EUR/USD will be in focus.

September 24

On Thursday, U.S. Federal Reserve chair Janet Yellen will make her first public speech since announcing the Fed’s rate decision. Yellen will deliver a speech at the University of Massachusetts Amherst’s Department of Economics called “Inflation Dynamics and Monetary Policy.” Inflation concerns were central to the Fed’s decision on whether to raise interest rates in September. Although it’s unlikely, investors will look for any clues from Yellen or any other members of the Fed Open Market Committee on when the central bank might tighten monetary policy. The central bank’s next public meeting will take place in October.

September 25

On Friday, the U.S. Commerce Department will release its final revision of the second quarter GDP report. It is the third and final GDP, although the Commerce Department occasionally offers revisions in the future. Following a lackluster first quarter, investors anticipated that the U.S. economy saw 3.7% growth in the second quarter, a figure that exceeds expectations. Despite the positive momentum, even if the report exceeds expectations, it’s unlikely that the dollar will see a significant boost.

Check back tomorrow at FXHQ.com for a breakdown on the impact of the Greek election, falling oil prices, and an update on the U.S. housing market, which could see a boost due to the Fed’s decision to delay an interest rate hike.

About FXHQ.com

FxHQ.com is a global financial website providing news, technical analysis, market quotes, data, and financial tools on a variety of topics including Currencies, Commodities, Stocks, Futures, Options, Economic news and Interest rates.


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