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Key Forex and Crypto fundamentals: Fed to cut interest rate 0.25%

Key Forex and Crypto fundamentals: Fed to cut interest rate 0.25%

September 16, 2019, | AtoZ Markets – The US dollar has been on the back foot as the US and China got closer. The British pound extended its advance as Brexit is fading away, and the euro recovered from the ECB’s stimulus. What’s next? The Federal Reserve is in the spotlight in the upcoming week, but the BOE and the BOJ will also compete for attention. 

On the other hand, after going above $10k mark, the Bitcoin price was able to extend its upward trend to $10,300 before retracting 10,500 today and Bitcoin dominance stays near 70%. Bitcoin hash rate keeps on increasing despite the current bearish market. The hash rate could hit a record 100 EH/s before the year ends. This has probably helped the BTC price to maintain a moderate decline since late June unlike most of the top cryptos. Here are the Forex and crypto events that will happen this week, let’s dive deep into it!

Chinese Industrial production impacts global sentiment  

On Monday at 2:00 Chinese Industrial production data will be live. The world’s second-largest economy suffered its slowest year growth in industrial output back in July, with an expansion of only 4.8%. An acceleration to 5.2% is projected now. The data has an impact beyond China’s borders as it impacts the global sentiment.

German ZEW Economic Sentiment

Tuesday, 09:00, German ZEW Economic sentiment will be live. The institute’s early release of its survey of around 300 investors and analysts has been on a free-fall in recent months. It hit a low of -44.1 points in August reflecting substantial pessimism. Economists expect a minor increase to -38 points, still pointing an outright recession in the continent’s largest economy.

Federal Reserve decision 

Fed Reserve decision for a rate cut will take place on Wednesday at 18:00. The Federal Reserve is set to cut interest rates by 0.25% for the second time in a row. While the US and China have recently gotten closer, trade tensions have taken their toll and the job market has seen fewer job gains. Markets are fully pricing in a reduction, and Chair Jerome Powell refrained from pushing back against these projections.

UK inflation figures 

Wednesday, 8:30. Britain’s Consumer Price Index has been hovering around the 2% level the Bank of England’s target for several months. After surprising with an increase to 2.1% year on year in July, a drop to 1.8% is on the cards now. In the case of inflation significantly dropping, the pressure to raise rates will diminish. However, the fall of the pound during August may have pushed prices higher.

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Japanese rate decision

Thursday, early in the morning Japanese rate decision will be live. The Bank of Japan has only several hours to digest the Fed’s decision before it makes its own. While negative interest rates have been hurting commercial banks, there is growing pressure on the Tokyo-based institution to decrease its interest rate from -0.10% to -0.20%.

The BOJ is competing with the Fed and with the ECB which are both easing their monetary policy. Governor Haruhiko Kuroda and his colleagues have very few tools in their shed.

UK rate decision

Thursday, 11:00. The Bank of England has its hands basically tied due to Brexit. While wage growth is robust and it would like to raise rates to combat potential inflation down the road, the BOE may have to slash rates if the UK leaves the EU without a deal and the economy tanks. In this September decision, the “Old Lady” is forecast to leave its interest rate unchanged at 0.75%.

Crypto Weekly Outlook – EOS, Tron and Binance coin

The total crypto market cap is climbing higher and it may soon break the $250 Billion zone soon. This week, we will see how the price of EOS, Tron and Cardano coin reacts in an upcoming day.

Read more: Top 10 Cryptocurrencies 2019

EOSUSD – EOS coin price outperformed in the past few days and it broke the main $3.850 resistance zone. The upward move was such that the price even surpassed the $4.0 resistance level. The coin is now trading above the $4.100 level (the press time) and it seems like there could be a minor downside correction towards the $4.000 level.

TRXUSD – Tron price remained in a bearish zone below the $0.01650 and $0.0160 resistance level. Tron price is currently trading near $0.0158 mark and it might continue to face hurdles on the upside near the $0.0165 level.

ADAUSD – Cardano price tested the $0.0450 mark and recently started an upside correction. The coin price climbed above the $0.0465 level and it seems like it could continue to rise. The main resistance on the upside is near the $0.0500 level, above which it could test the $0.0520 resistance level.


Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.

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