Forex Market Outlook For The Week August 26 – 30, 2019

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Last week, the markets continued to digest the all-important speech delivered by Jerome Powell, the Fed Chair, as it rocked the dollar. In the upcoming week, traders will keenly watch the second estimate of the June quarter GDP growth data along with personal spending as well as durable goods orders that are also scheduled to be released. Australia will reveal the building permits data and private sector capital expenditure, while Canada is set to release the monthly GDP growth rates. Having said that here is an outlook on a few key releases from around the world:

#1: G7 Meetings (08/24/2019 Saturday to 08/26/2019 Monday)

France hosts the 45th G7 summit in Biarritz. The leaders from the G7 countries will discuss several global economic issues. They include trade policies and matters related to cryptocurrencies. Finance ministers and top central bank officials from seven industrialized nations (The US, The UK, Canada, Italy, France, Germany, and Japan) attend G7 meetings which are not open to the press. However, the officials often talk to the reporters throughout the day and issue formal statements as regards policy shifts and objectives after the conclusion of the meetings. Their comments and statements often create market volatility. G7 is not an institution, but it is a highly influential global policy-setting body that operates at the highest level. Their policies and initiatives have a significant impact on the currency markets.

#2: U.S. Core Durable Goods Orders (08/26/2019 Monday 12:30 GMT)

forex market outlookIn the US, new orders for long-lasting goods manufactured in the country, excluding transportation goods, zoomed 1.2 percent on a month-on-month basis in June after the reading for the previous month was revised to 0.5 percent increase. The reading for the month beat analysts’ expectations for a gain of 0.2 percent.

Forecast for July 2019: New orders for core durable goods are expected to increase by 0.2 percent

#3: U.S. CB Consumer Confidence (08/27/2019 Tuesday 14:00 GMT)

In the US, the Consumer Confidence Index reported by the Conference Board rebounded in July after registering a decline in the prior month. Currently, the Index stands at the 135.7 level, up from the 124.3 level in June. While the Present Situation Index rose from the 164.3 level to the 170.9 level, the Expectations Index increased from the 97.6 level to the 112.2 level.

Forecast for August 2019: 130.0

#3: U.S. Crude Oil Inventories (08/28/2019 Wednesday 14:30 GMT)

In the United States of America, the crude oil stocks dropped by 2.732 million barrels during the week ended August 16, following the 1.58 million barrel increase in the prior week. Analysts had expected crude oil stocks to drop by 1.889 million barrels. Gasoline inventories rose by 0.312 million barrels, following the 1.412 million barrel fall in the previous period. Analysts had expected the gasoline stocks to increase by 0.169 million barrels.

#4: New Zealand ANZ Business Confidence (08/29/2019 Thursday 01:00 GMT)

In New Zealand, the Business Confidence Index reported by ANZ dropped unexpectedly to the -44.3 level in July from the -38.1 level in the prior month. Analysts had expected the index to come in at the -34.9 level. This is by far the worst reading ever since August 2018, when the index stood at the -50.3 level. Employment intentions slumped as business sought to cut down jobs and capacity utilization reduced to its lowest level ever since 2009. Further, activity outlook and export expectations deteriorated. Additionally, profit expectations declined further and investment intentions turned negative. Meanwhile, pricing intentions remained unchanged amid easing cost pressures. Inflation expectations edged down to the near 2-year low level. Among sectors, commercial construction and residential buildings retraced to the negative territory, indicating a rapid decline in activities in the near future.

#5: Australia Private Capital Expenditure (08/29/2019 Thursday 01:30 GMT)

In Australia, private capital expenditure unexpectedly dropped by 1.7 percent on a quarter-on-quarter basis during the three-month period to March after the reading for the prior period was revised downward to an increase of 1.3 percent. The reading for the month came in much below analysts’ expectations for a gain in private capital expenditure of 0.5 percent. Expenditures fell for buildings and structures and plant equipment, and machinery.

Forecast for the three-month period to June 2019: Private capital expenditure is expected to increase by 0.4 percent

#6: U.S. GDP (08/29/2019 Thursday 12:30 GMT)

The American economy expanded by an annualized 2.1 percent during the second quarter of this year, according to the preliminary estimate, and beat analysts’ expectations for a growth of 1.8 percent. In the prior period, the economy had expanded 3.1 percent. Government spending and household consumption rose at faster rates, while exports and inventory buildup contributed negatively to growth.

Forecast for the second estimate of GDP growth for the second quarter of 2019: 2.0 percent

#7: Australia Building Approvals (08/30/2019 Friday 01:30 GMT)

In Australia, the building approvals fell by 1.2 percent on a month-over-month basis in June after the reading for the previous month was revised downward to a gain of 0.3 percent. Analysts had expected building approval to drop by 1.0 percent. While the permits for private sector dwellings, which exclude houses, declined further, approvals for house construction in the private sector rose. Among states and territories, the total number of approvals declined in Tasmania, Western Australia, New South Wales, and Queensland. However, it remained flat in South Australia. In Victoria, the number of approvals actually increased.

Forecast for July 2019: Dwelling approvals are expected to remain flat

#8: Canada GDP (08/30/2019 Thursday 12:30 GMT)

Canada’s GDP advanced 0.2 percent on a month-on-month basis in May, easing from the 0.3 percent expansion in the prior month. Analysts had expected a growth of 0.1 percent. GDP advanced for the third consecutive month as goods-producing industries grew by 0.6 percent and services-producing industries registered an expansion of 0.1 percent. Manufacturing grew 1.2 percent as durable manufacturing increased by 2.3 percent. Further, the construction sector rose by 0.9 percent, while the warehousing and transportation sector jumped 1.0 percent. However, wholesale trade declined 1.4 percent and quarrying, mining, and gas and oil extraction sector contracted 0.8 percent.

Forecast for June 2019: GDP is expected to grow by 0.1 percent

#9: U.S. Personal Spending (08/30/2019 Thursday 12:30 GMT)

In the US, personal spending rose by 0.3 percent on a month-on-month basis in June after the reading for May was revised upward to an increase of 0.5 percent. Personal spending was mainly boosted by services and non-durables consumption.

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