Happy with what he has
AUD is an interesting currency and this week it hits the headlines with its latest Bank Rate revelation (Tuesday 3rd 5.30am GMT). The Bank Rate has stood steady at 1.50% since it dropped by 0.25% in August 2016. While the economy has been trying to get itself back on its feet not many pundits have expected any changes.
But as things start looking better more voices are wondering when the next rise will happen. Could it be this week? Unlikely, depending on who you talk to. This means all action will be around the Rate Statement (Tuesday 3rd 5.30am) to see what the bank rate committee had to say and if change is coming on the horizon. Expect market changes for the Aussie dollar as traders analyse the comments and try to forecast where the national interest rates will go and when. It looks like they’ll be happy with things staying pretty much the same.
The week ends with a bang as Bank of England Mark Carney addresses an international climate risk conference in Amsterdam (4.15pm GMT Friday 6th). The clamour for a rate rise in the UK is growing but the mixed forecast has Bank representatives sitting on the fence. GBP traders could change their positions as the week closes if Carney drops any hints in the speech.
Federal Reserve newcomer Jermone Powell gives a speech and answers questions at the Economic Club of Chicago (Friday 6th 6.30pm GMT). If his comments look hawkish that is usually seen as good for the currency. It’s a busy week for USD traders so this could see them planning their action for Monday rather than any big changes as the week closes for trading on Friday.
Interest rates have such a crucial effect on currency value expect fluctuations around both events and enjoy your Friday afternoon trades.
One happy Trumpster
Can the US do it again? Last month’s Non-Farm Employment Change (Friday 6th 1.30pm GMT) went up by over 30% – increasing by 312K from the 239K rise in February. What makes this more impressive is that analysts saw a drop in the employment rise. This month they see an increase of 190k on the cards, which will make a solid run of 6 months of employment growth.
Forecasts also indicate growth in the Average Hourly Earnings (Friday 6th 1,30pm GMT) from 0.1% to 0.3%, which will be welcome news for US citizens struggling with high living costs and debts. The ISM Manufacturing PMI (Monday 2nd 3pm GMT) and ISM Non-Manufacturing PMI (Wednesday 4th 3pm GMT) are both looking healthy with scores safely above the 50 line between positive and negative outlooks – 60.1 and 59.2 respectively. Even if they waver, they’re unlikely to move far.
Overall, there is a positive outlook for the US economy when looking at this week’s data. But don’t forget the looming trade war sparked by Trump’s steel tariffs. Keep an eye on his Twitter feed and watch for responses from the EU, China, India and other major trading partners.