Weekly Market Analysis (May 24 – May 28): Know How News Impacted Your Currency

May 24

BOJ Gov Kuroda Speaks (Japan)

Pair Projection What is this news about?
USDJPY, EURJPY, CADJPY, AUDJPY, GBPJPY, CHFJPY, NZDJPY Volatility is often experienced during his speeches as traders attempt to decipher interest rate clues; JPY pairs can be volatile all day. As head of the central bank, which controls short term interest rates, he has important influence over the nation's currency value. Traders scrutinize his speeches as they are often used to drop subtle clues regarding future monetary policy and interest rate shifts;

FOMC Member Brainard Speaks (USD)

Pair Projection What is this news about?
USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY As most of the banks will remain close, not much volatility can be expected from USD pairs. Federal Reserve FOMC members vote on where to set the nation's key interest rates and their public engagements are often used to drop subtle clues regarding future monetary policy;

Swiss, French, German and Candaian Bank Holyday (Global)

Pair Projection What is this news about?
Swiss, French, German and Candaian Bank Holyday (Global)

May 25

GDP Growth Rate YoY Final (Q1) (Germany)

Pair Projection What is this news about?
EURUSD, EURJPY, EURGBP, EURCAD, EURAUD, EURNZD, EURCHF Two high possible high impact news following this will occurs. So, EURXXX pairs are highly anticipated to be volatile.

Ifo Business Climate (MAY) (Germany)

Pair Projection What is this news about?
EURUSD, EURJPY, EURGBP, EURCAD, EURAUD, EURNZD, EURCHF As this is also a high impact news, EUR might get slight to very volatile depending on the actual outcome of the news. In Germany, the IFO Business Climate Index measures entrepreneurs’ sentiment about current business situation and their expectations for the next 6 months. The survey is made by phone and covers 9,000 firms in manufacturing, the service sector, trade and construction. The Business Climate Balance is constructed as the difference between the percentage share of executives that are optimistic and the share that are pessimistic. This balance can take values between -100 (all responding firms assess their situation as poor and expect business to deteriorate) and +100 (all responding firms assessed their situation as good and expect an improvement in their business). For the calculation of the IFO Business Climate Index, the Balance is normalized to the average of a base year (currently 2015).

CB Consumer Confidence (MAY) (USA)

Pair Projection What is this news about?
USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY All the currencies related to USD and major USDXXX pairs should get volatile according to our analysis. Traders are requested to trade with caution.

May 26

RBNZ Monetary Policy Statement (New Zealand)

Pair Projection What is this news about?
All NZDXXX & XXXNZD PAIRS. In this report the RBNZ is mandated to include details on how they will achieve their inflation targets, NZDXXX pairs will most likely be very volatile. It provides valuable insight into the bank's view of economic conditions and inflation - the key factors that will shape the future of monetary policy and influence their interest rate decisions;

Crude Oil Inventories (USA)

Pair Projection What is this news about?
USOIL, USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY While this is a US indicator, it most affects the loonie due to Canada's sizable energy sector; USD and CAD will be volatile along with USOIL. It's the primary gauge of supply and demand imbalances in the market, which can lead to changes in production levels and price volatility;

Fed Quarles Speech (USA)

Pair Projection What is this news about?
USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY Volatility from USD pairs is to be expected. In the United States, the authority to set interest rates is divided between the Board of Governors of the Federal Reserve (Board) and the Federal Open Market Committee (FOMC). The Board decides on changes in discount rates after recommendations submitted by one or more of the regional Federal Reserve Banks. The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate.

May 27

Prelim GDP q/q (USA)

Pair Projection What is this news about?
USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY While this is q/q data, it's reported in an annualized format (quarterly change x4). Volatility is expected from USDXXX pairs. Prices may go on a bullish trend. It's the broadest measure of economic activity and the primary gauge of the economy's health;

Unemployment Claims (USA)

Pair Projection What is this news about?
USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY This is the nation's earliest economic data. The market impact fluctuates from week to week. Volatility is expected from USDXXX pairs. Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy;

GfK Consumer Confidence (JUN) (Germany)

Pair Projection What is this news about?
EURUSD, EURJPY, EURGBP, EURCAD, EURAUD, EURNZD, EURCHF The EURXXX pairs might get volatile during the mentioned time/ The GfK Consumer Climate Indicator is based on a survey of 2000 individuals age 14 and above. The questionnaire focuses on income expectations, buying propensity and savings. The components of the indicator are calculated as the difference between positive and negative answers to the questions asked. Their value can vary between minus 100 and plus 100 points with 0 representing the long term average.

May 28

Core PCE Price Index m/m (USA)

Pair Projection What is this news about?
USD/CAD, EUR/USD, USD/CHF, GBP/USD, NZD/USD, AUD/USD, USD/JPY Sudden volatility from this time forward is expected from USDXXX pairs. Differs from Core CPI in that it only measures goods and services targeted towards and consumed by individuals. Prices are weighted according to total expenditure per item which gives important insights into consumer spending behavior. This is rumored to be the Federal Reserve's favorite inflation measure, but CPI is released about 10 days earlier and tends to garner most of the attention;

Unemployment Rate (APR) (Japan)

Pair Projection What is this news about?
USDJPY, EURJPY, CADJPY, AUDJPY, GBPJPY, CHFJPY, NZDJPY Unemployment rate forecast seems to be low, less volatility is expected from JPYXXX but depending on the actual outcome of the news JPY can become volatile. In Japan, the unemployment rate measures the number of people actively looking for a job as a percentage of the labor force.

Economic Sentiment (MAY) (Euro Zone)

Pair Projection What is this news about?
EURUSD, EURJPY, EURGBP, EURCAD, EURAUD, EURNZD, EURCHF EURXXX pairs migght have an upsurge from this time around. Stay carefull. In the Euro Area, the Economic sentiment indicator is a composite measure (average=100) that calculates the confidence level among: manufacturers (40 percent of the index); service providers (30 percent); consumers (20 percent); retailers (5 percent) and constructors (5 percent).

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