Your Weekly Fundamental View (4-8 September)

September 04, 2017 08:30

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Need to Know

The upcoming trading week offers quite a few high-level news events. The most noticeable ones are three interest rate decisions in Australia, Canada, and the Eurozone. There are also six balance of trade figures released throughout the week, including the U.S., the UK, Canada, Australia, Germany, and China.

Coming Up

Australian Interest Rate Decision on Tuesday, 5 September

The Reserve Bank of Australia (RBA) will announce its interest rate decision for Australia. The RBA will add an official statement and policy report to provide investors, and the general public, with more information about the economic outlook as well as the conditions and trends behind the rate decision.

Why should you care? Traders could benefit from short-term volatility in AUD crosses once the report has been released. The RBA is expected to leave the rate unchanged. Traders should be paying attention to the statement as a hawkish or dovish statement might open trading opportunities. The previous interest rate is 1.5%, with the current forecast remaining at the same level.

Balance of Trade from Canada and the U.S. on Wednesday, 6 September

The balance of trade shows the difference between the imports and exports of goods from and to Canada and the U.S. The U.S. is a major importer of goods and services.

Why should you care? A raise or fall in the balance of trade is expected to impact the Canadian and US Dollar versus other currencies. An increase in imports means more currency weakness, whereas an increase in exports means more currency strength. The previous trade balance in Canada is C$-3.6B, whereas in the U.S., it's $-43.6B (*). The current forecast for Canada stands at C$-3.3B, and for the U.S., at $-44.6B (*).

Canadian Interest Rate Decision on Wednesday, 6 September

The Bank of Canada (BOC) will release its interest rate decision for Canada. The BOC is expected to communicate its vision on the current economic conditions and economic outlook via a rate statement.

Why should you care? The BOC is expected to leave the rate unchanged. The previous interest rate is 0.75%, with the current forecast remaining the same at 0.75% (*).

Balance of Trade from Australia on Thursday, 7 September

Like the US and Canada, Australia is also expected to release its balance of trade figures, which explains the difference between imported and exported goods.

Why should you care? The previous trade balance is A$0.86B, whereas the current forecast for Australia is A$0.875B (*).

Eurozone GDP Growth Rate on Thursday, 7 September

Traders can expect quarterly and yearly Gross Domestic Product (GDP) figures to be announced for the Eurozone. The GDP figures are an overall indication of economic expansion or contraction.

Why should you care? The previous quarterly GDP is 0.5%, and the previous yearly GDP, 1.9% (*). The current forecasted quarterly GDP is 0.6%, with the current forecasted yearly GDP standing at 2.2% (*).

Eurozone Interest Rate Decision on Thursday, 7 September

The European Central Bank (ECB) will announce its interest rate decision for the Eurozone. The ECB will also host a press conference that will address questions from the press.

Why should you care? Traders could benefit from short-term volatility in Euro crosses once the report has been released. The EBC is expected to leave the rate unchanged. Traders should be paying attention to the statement as a hawkish or a dovish statement might open trading opportunities. The previous interest rate is 0.0%, with the current forecast remaining exactly the same.

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Source: Interest rate development in the Euro from 2011 to 2017

Balance of Trade from China, UK, and Germany on Friday, 8 September

The balance of trade will provide data on the difference between imported and exported goods from and to the UK, China, and Germany in the previous month. A positive figure means that exports exceed imports, and a negative one indicates the opposite.

Why should you care? Export and import numbers from China have a large impact on the global economy as China produces and exports many products to the West, but also imports many inputs to manufacture and deliver the products. The previous figure for China stands at $46.78B, whereas the previous figure for Germany is EUR 22.3B and the UK has GBP -4.56B (*).

Canadian Unemployment Percentage on Friday, 8 September

The unemployment rate shows how many people failed to find employment in the past three months, as compared to the overall labour force.

Why should you care? Lower unemployment is beneficial for the economic health of Canada. The previous unemployment rate is 6.3%, with the current forecast remaining the same.

(*) Admiral Markets – Forex Calendar

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