The last trading session for this week has economic data related mainly to the American Session, with the key economic events being the inflation rate and the retail sales for the US economy. There is also an important economic survey about economic trends for the economy of Japan. Moderate to high volatility is expected for the USD/JPY currency pair and the US Dollar against a basket of other currencies, as especially the inflation rate figure will be monitored closely by the forex market participants as it has the potential to affect directly the interest rate path the Fed will follow in 2018.
These are the main economic events in the forex market for today to focus on:
European Session
- Sweden Inflation Rate, Italy Industrial Production
Time: 08:30 GMT, 09:00 GMT
Higher than expected or rising inflation rate for the economy of Sweden is considered positive for the Swedish Krona, as sustained inflationary pressures may lead to higher future interest rates by the central bank of Sweden. The forecast is for an increase in the inflation rate in Sweden on a monthly basis, with a reading of 0.4%, higher than the previous reading of 0.2%.
The industrial production for Italy measures the output of the industrial sector of the economy, with rising figures reflecting increased consumer spending and higher exports, with both of these economic factors being supportive and positive for the economy of Italy and the Euro. On a monthly basis the forecast is for an increase of the industrial production in Italy with a reading of 0.6%, a bit higher than the previous reading of 0.5%.
American Session
- US Retail Sales, Retail Sales Excluding Autos, Inflation Rate, Core Inflation Rate, Business Inventories, IBP/TIPP Economic Optimism
Time: 13:30 GMT, 15:00 GMT
The main economic events that can move the US Dollar today are the release of the inflation rate and retail sales figures. Higher than expected and rising figures for both inflation rate and retail sales will be considered supportive and positive for the US Dollar, reflecting the presence of inflationary pressures in the economy, and increased consumer spending, which is a key driver of economic growth measured by the level of GDP. On a monthly basis the US retail sales are expected to increase but at a lower growth rate, with a forecast of 0.4%, lower than the previous reading of 0.8%.
The inflation rate is expected to decline on a monthly basis with a reading of 0.2%, less than the previous reading of 0.4% and on a yearly basis as well. Furthermore the core inflation rate which excludes the volatile food and energy prices, and is a more conservative measure of inflation, is expected to increase marginally on a monthly basis with a figure of 0.2%, higher than the previous reading of 0.1%, but remain unchanged at 1.7% on a yearly basis. This will indicate the absence of real inflationary pressures in the US economy, and may have a negative influence on the US Dollar, as with not any significant inflationary pressures, the Fed will have less motivation to alter its monetary policy to fight inflation.
For business inventories and Economic Optimism Index, lower than expected readings for the business inventories and higher for the Optimism Index, will be positive for the US Dollar. An increased level of business inventories may signal over time lower business economic conditions and activity, while increased economic optimism reflects higher optimism of the consumers and businesses, which can lead to higher economic growth in terms of higher consumer spending, employment, investments, durable goods orders.
Asian Session
- Japan Eco Watchers Survey Current
Time: 05:00 GMT
An economic survey with important insights on economic trends such as employment, household activity and corporate activity, with a level over 50.0 indicating optimism. The forecast is for a marginal increase with a reading of 55.2, higher than the previous reading of 55.1, which may be positive for the Japanese Yen.
