26th January 2020 – 31st January 2020
• EUR: IFO Business Climate • USD: New Home Sales This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany.The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish). The number of New Home Sales released by the US Census Bureau is an important measure of housing market conditions. House buyers spend money on furnishing and financing their homes so as a result the demand for goods, services and the employees is stimulated. Generally, a high reading is seen as bullish for the USD, whereas a low reading is seen as bearish. • USD: Nondefense Capital Goods Orders Excluding Aircraft, Consumer Confidence The Nondefense Capital Goods Orders Excluding Aircraft, released by the US Census Bureau, measures the cost of orders received by manufacturers for capital goods (capital goods are durable goods used in the production of goods or services), which means goods planned to last for three years or more, excluding the defense and aircraft sectors. As those durable products often involve large investments, they are sensitive to the US economic situation. Generally speaking, a high reading is bullish for the USD, while a low reading is seen as Bearish. The Consumer Confidence released by the Conference Board captures the level of confidence that individuals have in economic activity. A high level of consumer confidence stimulates economic expansion while a low-level drive to economic downturn. Generally, a high reading is also positive for the USD, while a low reading is negative. • AUD: Consumer Price Index • USD: Fed Interest Rate Decision The Consumer Price Index released by the RBA and republished by the Australian Bureau of Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services . The purchase power of AUD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or Bearish). With a pre-set regularity, a nation's Central Bank has an economic policy meeting, in which board members took different measures, the most relevant one, being the interest rate that it will charge on loans and advances to commercial banks. In the US, the Board meets at intervals of five to eight weeks, in which they announce their latest decisions. A rate hike tends to boost the local currency, as it is understood as a sign of a healthy inflation. A rate cut, on the other hand, is seen as a sign of economic and inflationary woes and, therefore, tends to weaken the local currency. If rates remain unchanged, attention turns to the tone of the FOMC statement, and whether the tone is hawkish, or dovish over future developments of inflation. • GBP: BOE Interest rate decision • EUR: Harmonized prize index • USD: Gross domestic product BoE Interest Rate Decision is announced by the Bank of England. If the BoE is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the GBP. Likewise, if the BoE has a dovish view on the UK economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish. • GBP: Brexit deadline • EUR: Gross domestic product & Consumer price index Brexit to become official, so the United Kingdom will leave the European Union. The move is a result of the EU Referendum in 2016. A transition period to arrange all the details will start then, with the new status quo starting from January 1st, 2021.Monday
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