The last trading session for the week in the forex market and year has a very light economic calendar with only news related to the economies of Spain, Germany and Australia. The expected volatility and price action for the majority of currency pairs should be very low, as liquidity this week is not at normal levels, and thin trading conditions are not indicative of real trends. Nevertheless some volatility spikes cannot be ruled out, especially if the very few economic events provide any substantial economic surprise, mainly for the EUR/USD currency pair.
These are the main economic events for today in the forex market:
European Session
- Spain and Germany Inflation Rate
Time: 08:00 GMT, 13:00 GMT
The Eurozone this year has witnessed economic growth but not any real or severe inflationary pressures, which may force the ECB to raise soon the key interest rate, currently being at zero level. The forecasts for the annual inflation rates, although preliminary for both Spain and Germany confirm this trend, with the expectation of a decline of the inflation rate to 1.5% for Spain, and 1.5% also for Germany, while the former readings were 1.7% and 1.8% respectively.
As the largest economy of Eurozone, Germany does not witness any severe inflationary pressures this can be considered a negative factor for the Euro. Practically this means as the ECB has recently stated, that hardly any incentive to raise the key interest rate exists. However the Euro has had a stellar year in 2017, and this strength most probably will be questioned in 2018.
Pacific Session
- Australia Private Sector Credit
Time: 00:30 GMT
The private sector credit in Australia is expected to remain unchanged to 0.4% on a monthly basis, and decline marginally to 5.2% on a yearly basis, lower than the previous figure of 5.3%. Increased or rising figures of private sector credit are considered positive for the economy and the local currency as higher credit means higher consumer and business spending, increased economic activity, and higher economic growth, measured by GDP numbers.
As the expected readings are almost unchanged, not any significant price action or volatility is expected for the Australian Dollar. Also private sector credit is reflective of consumer confidence and optimism about the economic conditions, as higher readings are positively correlated with a strong economy.
