We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • RT @next_china: U.S., China chief trade negotiators spoke by phone on Saturday, Xinhua reports https://t.co/dMQtd0g4jY
  • The $AUDUSD and $EURUSD downtrend may prolong as traders counterintuitively buy into their descent. Meanwhile, the USD/CAD uptrend may accelerate on rising net-short bets. Get your market update from @ddubrovskyFX here: https://t.co/dlzJ31kf3f https://t.co/xp8P9MmCgb
  • As we head into next week, Cable is continuing to digest the massive leg higher last month, which at some point soon could mean another surge. Get your $GBPUSD technical analysis from @PaulRobinsonFX here: https://t.co/LJ42YhDe3X https://t.co/5hGwhGBpLB
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia from @DavidCottleFX here: https://t.co/E2hqoRdO7q https://t.co/urMnUCq4fn
  • RT @markets: White-hot pot stocks have flamed out in spectacular fashion https://t.co/3GsVsRyZaZ
  • What is the best time to trade #forex? Find out: https://t.co/M9R46r5ewa #tradingstyle https://t.co/gJ1QDrox67
  • #Gold prices may be given a tailwind from the FOMC minutes and escalating trade war risks if they fuel demand for anti-fiat assets amid expectations of additional Fed easing. Get your $XAUUSD market update from @ZabelinDimitri here: https://t.co/OJ7WUY9W7E $gld https://t.co/kBp3opzptm
  • Why should you set trading goals? How can it help regardless of what your #tradingstyle is? Find out: https://t.co/AYdD7ODlv1 https://t.co/G0ftVurNNN
  • Manning the penalty box today...i hope there aren't too many visitors https://t.co/1y81Li7laL
  • Do you think your #tradingstyle is of a #FOMO trader? Find out how you can turn that to #JOMO? Find out: https://t.co/79Q4pYdVEd https://t.co/S82AOd5AeP
FX Week Ahead: Inflation Data Due from Eurozone, UK, Japan, and Canada

FX Week Ahead: Inflation Data Due from Eurozone, UK, Japan, and Canada

2018-09-17 15:00:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

Talking Points:

- Trade tensions are back in the spotlight after Friday’s announcement that US President Trump was ordering tariffs on $200 billion of Chinese imports.

- Inflation figures due out over the coming week may not carry the potency that they usually do – but the Canadian CPI report seems like it has the greatest potential to leave an impact.

- Retail trader sentiment is starting to turn back in the US Dollar’s favor after a disappointing week of trading.

Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.

09/17 Monday | 09:00 GMT | EUR Eurozone Consumer Price Index (AUG F)

The final August Eurozone Core CPI is due in at +2.0% (y/y), a slight drop from the initial reading reported in at +2.1%. The final core reading for August is set to be confirmed at +1.0% (y/y), down from +1.1% in July. The Euro, on a trade-weighted basis, is down over the past year, so it stands to reason that inflation has a natural cushion underneath it for the foreseeable future. As was confirmed at the September ECB rate decision, policy remains on a preset course – ending QE in December 2018 and raising rates in “summer 2019” – as the Governing Council has greater confidence in the path that inflation will take moving forward. Accordingly, there is only limited scope for a significant move in the Euro around the release.

Pairs to Watch: EUR/GBP, EUR/JPY, EUR/USD

09/19 Wednesday | --:-- GMT | JPY Bank of Japan Rate Decision

Bank of Japan policymakers are highly unlikely to change policy when they meeting in the coming week, for several reasons. On the data front, inflation remains well-below its price stability target of +2% over the medium-term, a fact that will be confirmed later in the week when the August CPI report is due. On the policy front, not enough time has passed since the July meeting, where tweaks were made to allow the BOJ to keep rates lower for longer via new yield control measures. Another change in such close proximity to the last one would only serve to erode confidence in the BOJ. Finally, the external trade environment continues to weaken, now that US President Trump has set the US trade deficit with Japan in his sights.

Pairs to Watch: AUD/JPY, EUR/JPY, GBP/JPY, USD/JPY

09/19 Wednesday | 08:30 GMT | GBP Consumer Price Index (AUG)

According to Bloomberg News, economists are forecastingfor inflation to have increased month-over-month in August by +0.5% after holding flat in July. But price pressures are down over the past year, dipping to +2.4% from +2.5% (y/y). The data should only have a limited impact on price action, given what was revealed by the Bank of England at its September policy meeting. With policymakers still focusing on scenario planning for various Brexit outcomes, BOE officials have made clear that no shift in monetary policy is to be expected before the March 2019 exit deadline. Given that the BOE has a penchant for changing policy only at meetings when it has new economic forecasts – much like the Fed or the ECB – the first meeting that produces a new Quarterly Inflation Report after the Brexit deadline is in May. Until the Brexit path is decided (which should be in the coming weeks), UK economic data will likely have a limited impact on GBP-crosses.

Pairs to Watch: EUR/GBP, GBP/JPY, GBP/USD

09/20 Thursday | 23:30 GMT | JPY National Consumer Price Index (AUG)

Japanese inflation figures are expected to edge higher again, due in at +1.1% in August from +0.9% in July (which itself was an uptick from +0.7% in June (y/y)). But price pressures have been muted for most of 2018, ever since the February reading peaked at the fastest rate of price pressures since April 2015 – when Shinzo Abe government enacted the (unpopular) sales tax reform. Considering that the target for price stability sits at +2% over the medium-term, headline inflation at nearly half that rate means the BOJ won’t be shifting policy anytime soon.

Pairs to Watch: EUR/JPY, GBP/JPY, USD/JPY

09/21 Friday | 12:30 GMT | CAD Consumer Price Index (AUG)

Following a rebound in the Canadian Dollar over the summer, Canadian inflation rates are expected to have regressed in August. The surge in price pressures seen in July (+3.0% versus +2.5% expected (y/y)) should cool off, with the August reading due in at +2.8% (y/y). But this marks the seventh month in a row where inflation has been in the upper half of the Bank of Canada’s inflation target range. Despite recent improvements in the labor market, figures from Statistics Canada showed that overall wage growth is barely off of its lowest levels since 1990. With both inflation and labor market data trending in the right direction, odds have turned higher for the Bank of Canada to raise rates again at least once more this year: overnight index swaps are pricing in a 86% chance of a 25-bps rate hike by October.

Pairs to Watch: CAD/JPY, EUR/CAD, USD/CAD

Read more: DXY Index at Critical Juncture Following BOE, ECB Meetings

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com.

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.