Weekly Trading Forecast: Fed and BoJ Rate Decisions, Brexit Fears Carry More than Currency Risks
Event risk over the coming week will no doubt present a high level of volatility risk for key FX players. But, beyond the currency reactions, we will be tapping into themes essential to financial conditions.
The outlook for the Dollar through the coming week is both highly uncertain and a clear risk of extreme volatility. Regardless of asset, the lightning rod for investors ahead is the FOMC rate decision on Wednesday, September 21st.
There aren’t many meaningful data due out over the coming days, so traders’ collective attention shouldn’t be trained on the economic calendar. Instead, EUR-crosses are likely to prove highly volatile throughout the week thanks to central bank interference: there are five ECB speakers between Monday and Friday; and the Federal Reserve and Bank of Japan both meet from September 20-21.
A highly-anticipated Bank of Japan policy decision is second to only the US Federal Reserve's meeting in importance for the week ahead. Suffice it to say it will almost certainly prove an eventful 12 hours for the USD/JPY exchange rate.
With market attention turning to the Federal Open Market Committee’s (FOMC) September 21 interest-rate decision, GBP/USD stands at risk of giving back the rebound from the August low (1.2854) should the fresh batch of central bank rhetoric boost expectations for a 2016 rate-hike.
The sentiment- and yields-sensitive Australian Dollar may fall for a third consecutive week if the FOMC delivers a hawkish monetary policy
When the RBNZ cut the overnight cash rate in August, few probably would’ve expected what would happen next.
The loonie is sliding, and there is no lack of reasons to blame. In fact, this week we’ve seen new worries added to the reasons for the Canadian economy’s pending weakness similar to what we’ve seen in the Mexican Peso.
The offshore Yuan touched the strongest level in three weeks despite no Yuan reference rate was issued by the PBOC beginning on Thursday, due to a 3-day national holiday.
Gold prices are lower this week with the precious metal off 1.46% to trade at 1308 ahead of the New York close on Friday.
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