Today there are numerous important economic events with a high impact on the Euro, the British Pound and the Japanese Yen. There are a few Fed officials’ speeches, but the main focus of the forex market will be on the release of the GDP growth rate in the UK, the German Ifo Business Climate and the ECB Monetary Policy Meeting Accounts and the inflation rate in Japan. Overall moderate to high volatility is expected for the Euro, the British Pound, and the Japanese Yen.
These are the main economic events on the forex market to focus on today:
European Session
- France Business Confidence, Switzerland Industrial Production, Germany Ifo Current Conditions, Expectations and Business Climate
Time: 07:45 GMT, 08:15 GMT, 09:00 GMT
A higher than expected or rising figure for the Business Confidence in France and increased Ifo figures will be supportive and positive for the Euro, reflecting increased optimism on business and economic conditions in two of the largest economies in the Eurozone. Business confidence is a leading indicator for the economy reflecting expectations for the immediate future, and can have a positive impact on business investing and employment, while the German Ifo Business Climate Index in essence measures the current German business climate and measures expectations for the next six months.
The IFO Current Conditions and Expectations also indicate the level of optimism on the economic outlook, with rising figures being positive for the Euro as well. The forecasts are for an increase of the Business Confidence in France with a reading of 114.0, higher than the previous reading of 113.0, and a small decline for the Ifo Business Climate, with a reading of 117.2, lower than the previous reading of 117.6.
- UK GDP Growth Rate, Business Investment
Time: 09:30 GMT
GDP growth is an indicator for broader economic growth, reflecting the economic activity, with higher figures indicating economic expansion, being supportive and positive for the local currency, the British Pound. Business Investment provides fundamental insights related on the state of business activity, with rising readings indicating a robust business sector, and an optimistic economic outlook. Business Investment has a positive impact on the level of employment and consumer spending, which both are correlated with economic growth. The forecasts are for a decline of the GDP growth in UK on a yearly basis and a reading of 1.5% lower than the previous reading of 1.7%, but for an increase on a quarterly basis.
The forecast for the Business Investment is for an increase on a yearly basis with a reading of 2.5%, higher than the previous reading of 1.7%. Higher readings for GDP growth and Business Investment are indicative signs of a robust economy, and are considered positive for the British Pound. As seen from the graph the forecast for the Real GDP growth rate in UK is for an uptrend in the following years, and especially after the year 2019, when the Brexit is scheduled officially to become a reality in the global financial markets.
The statistic presents the forecasted growth rate in the real GDP in the United Kingdom (UK) from 2015 to 2021. Over the coming years it is predicted that there will be between 1.6 percent and 2 percent growth.
- ECB Monetary Policy Accounts
Time: 12:30 GMT
An important review of financial, economic, monetary issues and developments in the Euro area will provide important fundamental information related to the economic growth, and economic conditions such as the inflation rate, and can influence the Euro as there will mentions to fiscal and monetary policies and decisions, while economic risks can provide insights on what the ECB is focusing on pointing to potential shifts in monetary or fiscal policy.
American Session
- Fed Kashkari Speech, Fed Quarles Speech, Fed Dudley Speech,Fed Bostic Speech, Canada Retail Sales, EIA Crude Oil and Gasoline Stocks Change
Time: 01:15 GMT, 05:15 GMT, 13:30 GMT, 15:00 GMT, 16:00 GMT, 17:10 GMT
The forecast for the Retail Sales in Canada are for an increase on a monthly basis with a figure of 0.4%, higher than the previous reading of 0.2%, a positive factor for the Canadian Dollar. Higher figures of Retail Sales indicate strong consumer confidence and spending, leading to future economic growth. The Canadian Dollar and the USD/CAD can be influenced significantly also by the weekly release of US Crude Oil Stocks Change. For example if a decline in inventories is less than expected, then this implies a weaker than expected demand for Crude Oil Prices, and should be considered negative for the oil prices.
Asian Session
- Japan Inflation Rate, Core Inflation Rate
Time: 23:30 GMT
As seen from the chart the inflation rate in Japan is in an uptrend during the time period of 1-year, which is supportive and positive for the Japanese Yen, as it indicates inflationary pressures in the economy, and may weigh on future interest rate decisions by the BoJ ending the environment of negative interest rates. The forecast is for an increase of the interest rate with a reading of 1.1%, higher than the previous rate of 1.0%, while the Core Inflation which excludes volatile prices of fresh food is considered to remain unchanged at the rate of 0.9%.
It is noteworthy to mention that the inflation rate in Japan reached a 33-month high of 1.0% in December 2017. This uptrend must be monitored closely as it may be an early signal of a monetary policy shift.
