Quite an uneventful start to the week in terms of fundamental data releases. However, a somewhat dovish speech from Federal Reserve member Brainard led to selling pressure on the US dollar. More important events on the daily Forex news and trade opportunities.
13th September, AtoZForex – Draghi speech, German economic sentiment and more on today’s daily Forex news and trade opportunities.
#1 UK economy looks brighter for now
It was not so long ago that many expected the Brexit effect to hit the UK hard with some going so far as to predicting a recession in the economy. However, after swift action from the Bank of England and UK’s political leadership moving quickly to plug the void left after David Cameron’s resignation following the Brexit verdict, many now expect the UK’s pace of economic growth to perform much better than previously thought.
#2 Fed Brainard dovish speech: No rate hike next week?
Traders were eyeing the commentaries of Fed Governor Lael Brainard, being the last Fed official to reveal her thoughts before the FOMC meeting of next week. The Fed governor could have hinted at a Fed rate hike, which would send the USD up. Instead, Fed Brainard’s dovish speech called for prudence in the Fed’s interest rate policy. Amid the hawkish jitters of John Williams, Eric Rosengren and other Fed officials for a gradual Fed rate hike path, Lael Brainard opted for a more cautious and dovish tone.
Opportunity: Sell USDCAD on rallies
#3 S&P sounds Brexit alarm
The global ratings agency has warned that despite positive data from the UK ever since Brexit, longer term risks still exist which may hurt the economy, stating that: “While the news is encouraging” in the weeks since Brexit “we believe it has no bearing on the cloudy longer-term outlook for the U.K. economy.”
#4 UK inflation data due
The UK’s consumer price index y/y is forecast to show a 0.7% change in the price of goods and services purchased by consumers. A potential rise of 0.1% from the previous release. An uptick is expected due to the slide in the value of the pound following Brexit.
Opportunity: Buy GBPUSD on positive report
#5 German ZEW Economic Sentiment
The latest ZEW economic sentiment is set to be released. Economic sentiment in Germany is forecast for an improvement to 2.8 from 0.5 previously reported. While the Eurozone economic sentiment is forecast to come at 6.7, as against 4.6 last month. Positive results could potentially boost the euro.
Opportunity: Buy EURUSD on positive data
#6 ECB President Draghi Speaks
Following the somewhat disappointing ECB monetary policy stance released last week, Draghi is again due to speak by 10:00 am at the 2016 Alcide De Gasperi Award ceremony. More clues will be sought regarding the central bank’s outlook for the future, hence, potential market moving.
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