Forex Market Outlook For The Week November 19 – 23, 2018

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The greenback extended its gains last week not only on its own strength but also on Italian and Brexit issues. However, the U.S. dollar lost ground later on as officials from the Fed expressed concerns. Italy continued to remain defiant even as the deadline to respond to the European Commission as regards the budget expired. Meanwhile, Brexit negotiations continued to linger on mostly because the British government officials could not come to an agreement amongst themselves. In the U.S., the Fed Chair Jerome Powell said that global headwinds remained relatively confident. However, the comments from Kaplan, Harker, and Clarida raised worries. They were also in no hurry to raise rates.

The upcoming week is relatively light in terms of economic data releases. The US is scheduled to announce the durable goods orders. This is the main event next week. Now, here is an outlook on the next week’s releases:

#1: Australia Monetary Policy Meeting Minutes (11/20/2018 Tuesday 00:30 GMT)

forex market outlookThe Reserve Bank Board’s Minutes of the Monetary Policy Meeting released on October 2, 2018, showed that the global economic condition continued to remain positive for the country even though the global economic projections reflected a certain amount of risk. Further, the members considered the developments related to the international trade policy as a source of uncertainty. However, higher bulk commodity and energy prices supported the terms of trade of Australia. As a result, the Board members decided that maintaining the interest rate at 1.5 percent would help sustain growth and achieve the inflation target.

#2: Japan BoJ Governor Haruhiko Kuroda Speaks (11/20/2018 Tuesday 03:30 GMT)

Haruhiko Kuroda, Governor of the Bank of Japan, is scheduled to speak in Tokyo at the Paris EUROPLACE International Financial Forum. The audience is expected to ask questions. Markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates in the future.

#3: Australia RBA Governor Philip Lowe Speaks (11/20/2018 Tuesday 08:20 GMT)

Philip Lowe, Governor of the Reserve Bank of Australia, is scheduled to deliver a speech on “Trust and Prosperity” in Melbourne at the annual dinner of the Committee for Economic Development of Australia. Markets often remain volatile during his speeches as traders make an attempt to understand the direction of interest rates in the future.

#4: U.K. Inflation Report Hearings (11/20/2018 Tuesday 10:20 GMT)

Earlier this month, the Bank of England decided to leave the interest rates unchanged. In the upcoming week, the Governor of the Bank of England Mark Carney is scheduled to testify before the Treasury Select Committee on the central bank’s views as regards the performance of the British economy. As the Brexit negotiations deadline comes closer, the central bank has downgraded the fourth quarter outlook for the economy to 0.3 percent. However, the bank is that the third quarter reading would come in at 0.6 percent.

Early data supports this view, but recent economic data does not indicate that the economy is on its back foot. However, the decline in business investments is a matter of concern. This indicates that businesses are cautious about investment and future spending.

#5: U.S. Core Durable Goods Orders (11/21/2018 Wednesday 13:30 GMT)

In the U.S., new orders for durable goods, excluding transportation, rose by 0.1 percent on a month-on-month basis in September after the reading for the prior month was revised upward to an increase of 0.3 percent. Forecast for October 2018: an increase of 0.4 percent is expected

#6: Canada CPI (11/23/2018 Friday 13:30 GMT)

In Canada, the consumer prices decreased 0.40 percent on a month-on-month basis in September. Analysts had expected a gain of 0.1 percent. This is by far the biggest monthly decline this year. Further, this is the first back-to-back monthly declines ever since 2016. Consumer prices fell 0.1 percent in August.

#7: Canada Core Retail Sales (11/23/2018 Friday 13:30 GMT)

In Canada, retail trade excluding autos fell 0.4 percent on a month-over-month basis in August against analysts’ expectations for an increase of 0.2 percent. The reading for the prior month was revised downward to an increase of 0.8 percent.

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