This week there are some major events and reports that will have significant impacts across the world’s Forex markets so we’re bringing you our selection of the most significant events. The Forex trading week ahead will see news from the US, the UK and the Eurozone that will play their part in the fortunes of currency pairs at Forex trading sites such as ForexYard.
On Tuesday morning we will hear news from the UK when the Bank of England regarding the UK’s annual inflation rate. Inflation has been on the rise in the UK during recent months thanks to a rise in the price of just about everything from fuel to shopping. However, even though the new 20% VAT rate is expected to push the UK’s CPI to 4% it is believed that inflation will remain at 3.3%.
As another year draws to a close we’re hearing that Japan may be ready to intervene, once again, in the Yen’s fortunes. The ever-strengthening Yen may need moderating in the not too distant future, according to Japan’s finance minister, Yoshihiko Noda. This move will be closely followed by Forex traders as there may be some profitable positions to be had.
Back in September we heard the news that Japan had sold billions of yen in a bid to devalue the Asian currency and increase manufacturing and export orders, a move that saw many currency pairs rise sharply against the yen but it is believed that another round of economic intervention is in the pipeline for the ever-strengthening yen. If Japan were to intervene in the fortunes of the yen then Forex traders at sites such as ForexYard would be in line to make a quick profit once again from buying at just the right time.
With the ongoing intervention from Central Banks across the world many Forex traders at ForexYard and other online Forex brokers are talking about the possibility of a global Forex war breaking out. However it would appear as though such a war has already begun and could be set to escalate. Both China and the US have already started to weaken their own currencies in a bid to boost their domestic economies.
Over the weekend a meeting between the International Monetary Fund and the World Bank took place in Washington, however the US and China failed to agree on a common position regarding domestic currency regulation, a disagreement that could well perpetuate the Forex war. The issue of currency will surely be raised again when representatives from the US and China meet again at the G20 summit in November.
The Japanese Government finally bowed to pressure and sold yen for the first time in six years. The rise of the yen was starting to make dents in the Japanese economy and therefore the government intervened, selling somewhere between 300-500 billion yen ($3.6 billion-$6 billion), according to Forex insiders however others believe this figure could actually be much lower. This morning Forex traders at eToro saw many currency pairs rise sharply against the yen following Japan’s currency sale.
Traders at ForexYard witnessed Stirling fall to a one-month low against the US dollar during this morning’s trading session. Forex traders are giving the pound a wide berth following a fall in European share prices and recent comments made by the Bank of England which have slowed trading of the UK currency across the board.
Traders at ForexYard and other markets across the globe have shown a distinct decline in support for the British currency in the wake of comments made by the Bank of England’s policymaker Martin Weale. While making these eagerly anticipated comments Weale suggested that the UK’s economy was heading in the wrong direction, sliding back into a state of upheaval. Following these predictions the pound slid nearly one per cent against the dollar, its weakest position since June.
Reports showing that US durable goods and new homes sales increased for April saw the US dollar strengthen during Wednesday’s sessions. This encouraging data boosted the US dollar against the euro, Swiss franc and New Zealand dollar while the greenback fell against the British pound, Canadian dollar, Australian dollar and the Japanese Yen.
Forex trades at Forex WebTrader saw the US dollar face mixed results in the wake of the two major economic reports. US new home sales rose during April as American home buyers took advantage of the final month of an $8,000 tax credit currently available. Purchases of new homes in the US rose to an annual rate of 504,000 in April, a 14.8 percent increase from the previous month.
The week ahead is set to be volatile and turbulent for Forex traders at 4XP and the many other Forex brokers around the world and remember that a volatile Forex market can offer profits for the well-informed and shrewd trader.
We expect the week ahead to see a continuing lack of faith in the Euro, with fears that some Euro zone states will head into the same financial difficulties as Greece has faced. The massive budget cuts which were announced by Greece last week were received badly by its people, with protesters taking to the streets rioting and three bank workers killed in the melee.
Following the extended weekend due to the Easter holidays traders at sites including Spread Co saw commodities rally as the US dollar felt the pinch, with Crude Oil, Gold And Silver Experiencing Brisk Trade On Monday. Both gold and crude oil rose to record highs today with Nymex crude oil prices rising to a 17-month high.
Oil trading resumed in a brisk fashion after the Easter holidays with investors speculating that demand for ‘black gold’ will increase as the world economy starts its recovery from the global recession witnessed over the last couple of years. The price of crude oil for delivery in May rose by well over $1.00 during the extended weekend, climbing as high as $85.97 a barrel during after-hours electronic trading on the New York Mercantile Exchange. This is crude oil’s highest value since the 9th of October 2008.
Forex traders at sites such as 4XP witnessed a week in which the British Pound Rallied Against The US Dollar and even in the wake of encouraging US job data the UK currency still managed to keep ahead of its Transatlantic counterpart.
As a growth of appetite for risk has returned to Forex markets across the globe the UK pound has been seen as a preferred currency. On Thursday the GBP/USD pair hit 1.5298, its highest price for two weeks. However, following the release of better than expected job figures the pair had fallen back to 1.5192 by the close of business on Friday but this was just a minor setback in a week which saw the pair rise by well over 200 pips from its rate at the start of trade on Monday, which was 1.4955.
A bigger than expected rise in inflation for China has led to speculation that the Asian super-power will create new inflation-halting monetary policies, which in turn has seen traders and investors at various forex, commodities, stocks and other Trading Markets Across The World Slow Down. This has had an effect on markets such as the FTSE, which struggled to make any advances on Thursday morning.
China’s National Bureau of Statistics released a report today stating that the country made a 2.7% year-on-year gain in its consumer prices during February. Along with the advancing consumer prices China’s industrial production rose by 20.7% during January and February, the biggest increase for the first two months of the year for over five years. Yesterday’s economic report also showed a much bigger than expected 46% year-on-year increase in exports for February.
