Week Ahead on Wall Street and Forex trading platforms

Published on: 10/23/18 11:34 AM

Tags: Forex market, Forex News, Forex trade, trading platforms

A busy day on all trading platforms highlighted by the continuing strength of the US Dollar (USD) as the week on Wall Street and other international markets kicked off.

The USD opened strong despite the disappointing news of Friday’s Non-Farm Payroll (NFP) report that showed 134,000 jobs added to the domestic economy in the month of September, a number far less than the expected 185,000 gain. The USD was buoyed by the better than anticipated unemployment rate of 3.7 percent. This figure represents the lowest unemployment rate in nearly 50 years. The Average Hourly Earnings came in solid at .3 percent, giving investors further encouragement surrounding the overall employment picture.

A relatively light weekly economic calendar is on the horizon with only a few macro indicators due. Investors and analysts will be looking to Thursday’s release of the inflation rate as well as a few speeches from speakers from the Federal Reserve. The second week of the fourth quarter will also begin to see a few third-quarter earnings reports begin to trickle in and possibly make an impact on trading.

Continued uncertainty with Italy’s forex markets is spurring a selloff of the Euro during Monday’s trading hours. Klass Knot with the European Central Bank (ECB) took the opportunity on Monday to hint at some near-term rate hikes. Knot said that the ECB will begin discussion of a possible rate hike at its January meeting. Although he continues to maintain that rates will remain steady at current levels through next summer, he said this was just an expectation and not a hard and fast rule.

Elsewhere

Elsewhere, the USD/CNH (Chinese Renminbi) landed above 6.90 on Monday on the heels of the People’s Bank of China’s (PBOC) decision to cut reserve ratios for the fourth time this year. On October 15th, the required reserve ratio (RRR) on the majority of banks in China was cut by one percent. This decision to cut the RRR will release 1.2 trillion yuan, the equivalent of $175 billion.

Over the course of the last few months, the bank has made a shift to looser policies as a result of economic expansion being threatened by both the concern of growing trade tensions with the US as well as Beijing’s decision to focus on economic tightening. As it becomes more apparent to all on the global trading scene that US President Donald Trump does not plan on backing down from his plan to impose sanctions on Chinese goods, Chinese officials are making decisions to support the domestic economy above all else.