Trading on key Forex news: we are waiting for the publication of the RBA's decision on the interest rate, the minutes of the June meeting of the Fed on monetary policy, and the publication (Friday) of data from the US labor market for June.
On the last day of the last week, the dollar declined. Investors closed long positions on the dollar and consolidated their profits.
It is worth noting that last Friday was also the last day of the week, month, quarter, and the half-year.
The correction of the major dollar pairs was significant. The EUR/USD, for example, grew by 116 points (+ 1.0%). DXY futures index of the dollar reflecting the value of the dollar to the basket of the six major currencies, fell on Friday by 0.7% after on Thursday DXY updated its annual high near the mark of 95.25. Despite the corrective decline on Friday, the positive dynamics of the dollar persists.
The focus of the traders' attention this week will be the meetings of the RB of Australia and the decision on the interest rate, the publication of the Fed's minutes of the June meeting on monetary policy, and the publication (Friday) of data from the US labor market for June.
As always, a number of the most important macroeconomic data and several important news are expected to be published this new trading week.
Monday, June 2
There are no important marco economic news planned
Tuesday, July 3
07:30 (GMT + 3) AUD The decision on the interest rate. The accompanying statement of the RBA.
Forecast: the rate will remain at the same level of 1.5%. As stated in the previous accompanying statements of the RBA, "strengthening the Australian dollar will complicate the adjustment of the economy", and "maintaining rates unchanged corresponds to the goals in relation to GDP and inflation". If, in the subsequent accompanying statement, the RBA shows rough rhetoric about the economic forecast and the probability of an early rate hike, this will be a bullish signal for the AUD.
Wednesday, July 4
There are no important marco economic news planned
Thursday, July 5
13:00 GBP Speech by Mark Carney, head of the Bank of England
The participants of the financial markets are expecting him to clarify the situation regarding the future policy of the central bank of Great Britain. Volatility during his speech usually grows abruptly in the pound trade and in the FTSE index of the London Stock Exchange if Mark Carney gives any hints about tightening or easing of the monetary policy.
If he does not touch upon the questions of the monetary policy of the Bank of England, the reaction to his speech will be weak.
21:00 USD FOMC minutes
This document may contain indications of the future of US monetary policy. The publication of the minutes is extremely important for determining the course of the current policy of the Fed and the prospects for raising the interest rate in the United States.
Tighter financial conditions will further strengthen the dollar. Volatility in the trading of the dollar and US stock indices usually increases sharply at the time of publication of the minutes. The soft tone of the minutes will positively affect the stock indices and negatively - the US dollar. The Fed raised interest rates three times in 2017; three increases are scheduled for 2018. However, recently, Fed officials have been hearing statements that testify to the Fed's inclination to have 4 interest rate increases in 2018.
Friday, July 6
15:30 USD Average hourly wages. New jobs created outside the agricultural sector. Unemployment rate
These are most important indicators of the labor market in the US in June. Forecast: + 0.3% (against + 0.3% in May) / 190 000 (against 223 000 in May) / 3.8% (against 3.8% in May).
In general, the indicators can be referred to as strong. If they coincide with the forecast or come out better, this will have a positive effect on the USD. However, it is often difficult to predict the market reaction to the publication of indicators. In any case, when these indicators are published, a surge in volatility is expected in not only in the USD, but throughout the financial market. Probably the most cautious investors will prefer to stay out of the market in this period.
15:30 CAD Change in the number of employed people in Canada. Unemployment rate in Canada
Statistics Canada will publish the data for June. Previous value was -7,500 employees (in May). If the number of employees in June decreases again, the Canadian dollar may react with a decline. The forecast: +17 500 employed. Unemployment in May was 5.8%. If the unemployment increases, the Canadian dollar will decrease. If the data prove to be better than the forecast, the Canadian dollar will strengthen.
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