Talking Points:
- US Dollar is likely to rise as hawkish FOMC sets stage December rate hike
- Japanese Yen may gain as BOJ announcement fuels investors' skepticism
- Eurozone PMIs eyed for "Brexit" impact, RBNZ meeting may be non-event
A monetary policy announcement from the Federal Reserve headlines the economic calendar in the week ahead. The US central bank is not expected to issue a rate hike this time around but hawkish guidance in the press conference, policy statement and economic forecasts released following the outing may set the stage for tightening in December. This may boost the US Dollar.
The Bank of Japan is also due to issue a rate decision. A comprehensive review of the central bank's various stimulus efforts is set to be published alongside the policy announcement, shining a light on rumored deep divisions among BOJ members about how best to proceed. Signs of turmoil coupled with emphasis on negative rates versus asset purchases may lead the Yen higher.
The RBNZ will deliver yet another policy decision. The markets expect no change and the central bank has amply signaled as much, suggesting the meeting will pass relatively quietly compared with those of the FOMC and the BOJ. September's flash Eurozone PMI surveys may help shed a light on the cooling effects of "Brexit"-linked uncertainty on regional economic activity.
Are retail traders buying or selling the US Dollar before the FOMC meeting? Find out here !
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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