Overview of the main events of the Forex economic calendar for the next trading week from August 20, 2018 to August 26, 2018

Trading on key Forex news: we are expecting the publication of the minutes from the July meetings of the Federal Reserve and the ECB, and the news from the annual economic symposium in Jackson Hole.

A sharp decline last Friday erased the entire dollar's gain over the past week. The DXY dollar index, which tracks the exchange rate of the US currency against the basket of 6 other major currencies, updated the annual high near the 96.86 mark last Wednesday.

However, on Friday, the dollar fell sharply. Futures for the DXY dollar index finished the trading day on Friday at 96.00, which is 25 points lower than the opening price at the beginning of last week.

The US dollar declined on Friday, as investors took profit before the weekend in long positions in the dollar, which reached its highest level in more than a year.

Strong US economic data, a high probability of another 2 interest rate increases by the Fed, as well as turbulence on emerging markets, contributed to the growth of the investment attractiveness of the dollar and its purchases. The dollar grew by 4.5% over the past year, reaching the highest levels since June 2017 against other major currencies.

According to market participants, the dollar will continue to be in demand in anticipation of further tightening of the monetary policy by the Fed, as well as as a safe haven in the escalation of international trade conflicts.

Unlike the dollar, the main US stock indexes strengthened at the end of the week, which allowed them to complete the week in positive territory. The main US stock indexes continue to grow against the background of strong macroeconomic indicators. The trade contradictions between the USA and other countries have so far apparently come to the fore.

The next week's attention will be focused on the publication of minutes from the ECB meeting (July 26) and the Fed (July 31-August 1). Tough rhetoric of the Fed regarding the prospects for monetary policy, combined with positive economic forecasts will push the dollar to further strengthening.

Against the backdrop of the soft tone of the report from the ECB's July meeting on monetary policy and in conjunction with the rhetoric of the Fed's leaders, the Eurodollar may step up the decline and head to the 1.1150 mark, through which the bottom line of the descending channel goes in the weekly EUR/USD chart.

Market participants will also follow the upcoming week following the economic conference in Jackson Hole organized by the Federal Reserve. Unexpected statements by management representatives of the world's largest central banks at this conference can increase volatility in financial markets, which are already in the turbulence zone due to the escalation of international trade conflicts.

As always, a number of important macroeconomic data and several important news are expected to be published on the new trading week.

Monday, August 20

There are no important macroeconomic news planned.

Tuesday, August 21

01:00 (GMT+3) AUD Speech by the head of the RBA Philip Lowe

In his speech, Philip Lowe will assess the current situation in the Australian economy and point to further plans for the monetary policy of the department. Any signals from him regarding the change in the RBA monetary policy plans will cause a sharp increase in volatility in the auctions of AUD and on the Australian stock market.

04:30 AUD Publication of minutes of the RBA meeting

The minutes from the last meeting of the RBA are published two weeks after the meeting and the decision on the interest rate. If the RBA positively assesses the state of the labor market in the country, the GDP growth rate, and also displays a hawkish attitude toward the inflation forecast in the economy, the markets will regard this as a higher probability of a rate hike at the next meeting, which is a positive factor for the AUD. The bank's soft rhetoric regarding, above all, inflation puts pressure on the AUD.

Wednesday, August 22

15:30 CAD Retail sales index

This index is published monthly by the Statistics Canada and estimates the total amount of retail sales. The index is often considered an indicator of consumer confidence and reflects the state of the retail sector in the short term. The growth of the index is usually a positive factor for the CAD; the decline in the figure will negatively affect the CAD. The previous value of the index is 2.0%. Forecast: in June, retail sales grew in Canada by 1.1%. If the data is even weaker, then CAD will decrease.

17:30 USD Weekly report of the Energy Information Administration of the US Department of Energy on oil and petroleum products in the US

A decline in the reserves, as a rule, favorably affects oil prices. The publication of data is usually accompanied by a surge in volatility in oil prices, which are denominated in US dollars. The previous value of the indicator was + 6.805 million barrels of oil and oil products.

OPEC, as well as the largest partner of the cartel - Russia, agreed to gradually increase oil production at the end of June. Thanks to this decision, oil prices fell by about 10% from the highs reached in the spring. The risks of increased oil production by Saudi Arabia and Russia, as well as in the US, can increase pressure on prices. Strengthening of the dollar is also one of the reasons for the drop in oil quotations in the last two months.

21:00 USD Minutes of the last meeting of the FOMC of the Federal Reserve System

The publication of the minutes is extremely important for determining the course of the current policy of the Fed and the prospects for the interest rate hike in the United States. According to interest rate futures, the probability of two more Fed rate increases this year is more than 70%.

The volatility of trading on financial markets during the publication of the protocol is usually increased, since the text of the minutes often contains either changes or clarifications for the details of the outcome of the previous FOMC meeting of the Fed.

A soft tone of the protocol will positively affect the stock indices and negatively affect the US dollar. Tough rhetoric of the Fed leaders regarding the prospects for monetary policy will push the dollar to further growth.

Thursday, August 23

Annual Economic Symposium in Jackson Hole

Organized and sponsored by the Federal Reserve. At the symposium, representatives of world central banks and academic economists discuss issues of the world economy and speak about the prospects for monetary policy of central banks.

14:30 EUR Information about the ECB meeting on monetary policy

This document contains an overview of the current policy of the ECB with the planned changes in the financial and monetary spheres. The publication of this document may cause a surge in volatility in trading in the euro and the European stock market. Investors will carefully study the text of the minutes from the July meeting of the ECB to catch additional signals regarding the completion of the QE program. Despite the expectations of investors, ECB President Mario Draghi repeatedly said earlier that the time for the end of the QE program in the Eurozone has not yet come. Moreover, the quantitative easing program can be re-expanded if necessary. In recent years, weak macro data from the Eurozone have been showing that the growth of the European economy is slowing.

Nevertheless, volatility in EUR trading could rise sharply if the minutes of the July meeting of the ECB contain unexpected statements or new information regarding the prospects for the QE program.

Friday, August 24

Annual Economic Symposium in Jackson Hole

Organized and sponsored by the Federal Reserve. At the symposium, representatives of world central banks and academic economists discuss issues of the world economy and speak about the prospects for monetary policy of central banks.

Price chart of EURUSD in real time mode

Economic calendar for the week 20.08 - 26.08.2018

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

Need to ask the author a question? Please, use the Comments section below. .
Start Trading
Follow us in social networks!
Live Chat
Leave feedback