Week Ahead: All Eyes on RBA Rate Statement and UK GDP

　　

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.

What happened in the market last week?

• United States Q4 Economic Outlook:
  • Q4 starting slower after a strong Q3
  • The labor market showing moderation in job growth, with 150,000 new jobs in October
• Bank of Japan’s Monetary Policy:
  • Q4 economic outlook similar to the US
  • Bank of Japan adjusting monetary policy
• Interest Rate Watch – FOMC’s Hawkish Stance:
  • FOMC held off on rate hikes for the third time in four meetings
  • Possibility of future rate increases, but higher bar than a few months ago

Source: VT Markets MT4

Last Week’s Market Pair Changes (All data is taken from the MT4 VT Markets)

The US dollar reached a six-week low following weaker-than-expected job creation data, which heightened expectations that the Federal Reserve might not change interest rates at its December meeting. The dollar index, which measures the greenback against a basket of major currencies, fell by 1.1% to 105.03, touching its lowest level since September 20. This drop constituted the largest one-day decline in months, and for the week, the dollar was down 1.4%, marking its worst weekly performance in that same time frame.

• USOUSD decreased by 4.8%
• XAUUSD decreased by 0.57%
• USDJPY lost by 0.1 percent%
• EURUSD increased by 1.55%
• GBPUSD rose 2.09%
• DJ30 price rose 5.11%
• NAS100 increased by 5.95%

Source: VT Markets Economic Calendar

What to focus on this week?

Significant economic events are expected to impact the forex market this week. Traders should closely monitor the Reserve Bank of Australia’s rate statement and the UK’s Gross Domestic Product (GDP) release. These indicators could substantially sway market conditions, underscoring the importance of staying abreast of recent developments to ensure a successful trading week.

Here are some notable highlights for the week:

Reserve Bank of Australia Rate Statement (7 November 2023) 

The Reserve Bank of Australia (RBA) considered raising its cash rate in October 2023 but chose to maintain it at 4.1% for the fourth consecutive month.

Analysts anticipate the central bank will increase its cash rate to 4.35% at its next meeting on 7 November.

Takeaway: The RBA’s interest rate decision this week is expected to create significant volatility for the Australian Dollar. Market experts anticipate that the central bank will hold the interest rate steady, a move that could potentially weaken the currency.

New Zealand Inflation Expectations (8 November 2023)

Inflation expectations in New Zealand rose to 2.83% in Q3 2023, up from 2.79% in Q2 2023. 

The data for Q4 2023 is scheduled to be released on 8 November, with analysts forecasting a decline to 2.6%.

Takeaway: The inflation expectations in New Zealand, which showed an increase in the previous quarter but are projected to slow down in Q4, indicate a deceleration in the country’s inflation rate. This trend could have a positive impact on the New Zealand Dollar.

UK Gross Domestic Product (10 November 2023)  

The British economy expanded by 0.2% month-over-month in August 2023, following a contraction of 0.6% in July.

The figures for September are due to be released on 10 November, with analysts predicting a 0.1% growth in the country’s GDP.

Takeaway: The British economy’s growth in August has fostered a positive sentiment in the market. Furthermore, the projected GDP increase for September suggests the potential for sustained growth momentum, which could positively influence the value of the British Pound.

University of Michigan Consumer Sentiment Index (10 November 2023)

The University of Michigan’s consumer sentiment index for the US was revised upward to 63.8 in October 2023 from the preliminary estimate of 63. 

Analysts anticipate the next report will reflect a sentiment index of 65.

Takeaway: The rise in consumer sentiment reflects growing consumer optimism about the economy, which could boost spending and contribute to economic growth. Additionally, this higher sentiment reading may positively affect the US Dollar.

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.