Weekly review 29-03-2016 by LiteForex
During last week the USD has strengthened all over the market. Terrorist attacks in Belgium triggered the decline in Euro and in the pair EUR/USD at the beginning of last week.
Migration in Eurozone strengthens centrifugal forces, which also have a negative impact on Euro.
The decline in the pair EUR/USD has restrained by the recent interest rate decision by the US Fed and comments about future monetary policy in the USA.
Market participants believe that the rise in the interest rate is possible in April due to which the pair EUR/USD will be under pressure, while the USD will receive support until the meeting of the US Fed in April.
The USD has already received support from the aggravated situation in Eurozone amid migration situation and explosions in Belgium and some comments of the key people of the US Fed in Philadelphia. President of the US Fed in Philadelphia said that positive US economic statistics are in favour of the increase in short-term interest rates. The rise may be introduces at any meeting of the US Fed even in April.
President of the US Fed in St Louis James Bullard gave interview to Bloomberg Television. He said that interest rate might be raised in April economic data will meet forecast by the US Fed. The third estimate of the GDP growth in the USA for Q4 has been revised upward from 1% to 1.4%.
The data scheduled for the release this week is as follows:
14:30 (GMT+2) – core price index on annual basis (personal consumption expenditure); The rise in the index above the forecast, along with data on the US GDP for Q4 released last Friday, will trigger the rise in the USD
A member of FOMC Mr. Williams will give a speech (11:15).
At 16:00 the data on the US consumer confidence index for March will be released. It is expected that the index will rise up to 94.0 against 92.2 in February. If the index will be up to expectations, it will trigger the rise in the USD.
14:00 – preliminary data on consumer price index in Germany for March.
14:15 – Changes in the number employees in the USA in March (Employment Report by ADP). As a rule, this data has strong effect on the price of the USD, as it is a sort of indication of the Non-Farm Payroll data, which will be released on Friday. Strong data will have a positive impact on the USD.
09:55 – Unemployment data for March in Germany.
10:30 – UK macro-economic data for February and UK GDP for Q4.
11:00 – preliminary consumer price in Eurozone for March. The rise in the index will provide support to Euro.
13:30 – Outcome of the last meeting of ECB on monetary policy and review of plans in the financial, economic and monetary policy in Eurozone.
01:50 – Tankan index from the Bank of Japan on key economic sectors of the country in Q1. Positive indices will cause the rise in the index Nikkei Stock Average and in the pair USD/JPY.
03:00 – indices of business activity in the service and manufacturing sectors of China for March. Negative data will trigger the decline in the Chinese stock indices and other Asian indices. This can also cause negative European stock indices at the European opening session and the rise in Euro and decline in price of commodity currencies, such as AUD, NZD and CAD. In case of positive data the situation will be the opposite.
14:30 – key news of Friday and of the week, which may affect the market until the end of April: number of new jobs outside agricultural sector in the USA (Non-Farm PayRolls) for March (forecast: +205 000 new jobs against +242 000 in February), unemployment rate in the USA (forecast: 4.9% against 4.9% in the previous month).
15:45 - 16:00 – important indices: PMI Markit in the manufacturing sector, consumer confidence, inflation rate and business activity ISM in the manufacturing sector in the USA for March.
Investors will be focused on the US data, as this will show chances of the possible rise in the interest rate in the USA in April and will indicate future plans of the US Fed. Positive data will show to the market participants that the rise is very likely; negative data will trigger the decline in the USD all over the market.
Prior to the American session the volume of trades and traders’ activity will be low due to Easter Monday and closure of the European stock exchanges.