Market Analysis

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August 10, 2020 10:08 am

Fundamental Forex forecast for the week of August 10-14

Monday, August 10


The beginning of the week will traditionally be calm, and the only thing that can be paid attention to on Monday is the data on unemployment in Switzerland, as well as on the number of vacancies in the US labor market. Switzerland's unemployment rate remained unchanged at 3.2%, while analysts had forecast a rise to 3.4%.


Tuesday, August 11


The main event of Tuesday will be the report on the labor market in the UK, which is likely to have a negative impact on the dynamics of the pound sterling. As experts expect, the unemployment rate should rise from 3.9% to 4.2%, employment should be reduced by 180 thousand, and the number of applications for unemployment benefits may increase by 70 thousand.


In contrast to the pound, the US dollar will have an opportunity to strengthen on Tuesday, as the pace of the decline in producer prices is expected to slow from -0.8% to -0.7%. On a monthly basis, prices may rise by 0.3%. Given the fact that this is a leading indicator for inflation, we can conclude that inflation is unlikely to decline.


Wednesday, August 12


Wednesday will begin with a meeting of the Board of the Reserve Bank of New Zealand, which, however, will not have any impact on the New Zealand dollar. The point is that all parameters of monetary policy should remain unchanged. However, the regulator can make a number of statements regarding future plans: and if they relate to the likelihood of introducing additional stimulus measures, the New Zealand dollar will be under pressure.


Wednesday could be a black day for the pound as a number of macroeconomic statistics are released in the UK. Firstly, this is the publication of preliminary data on the country's GDP in the second quarter: the indicator should show the acceleration of the economic decline from -1.7% to -23.0%. At the same time, data on industrial production may slightly smooth out the overall negative, since the rate of their decline should slow down from -20.0% to -10.0%. The situation is similar in the eurozone, where the rate of decline in industrial production may slow down from -20.9% to -12.0%, which will provide strong support for the euro.


The most important publication on Wednesday will be the US inflation data. Experts predict an increase in the indicator from 0.6% to 0.7%. If the forecasts are confirmed, the US dollar will be able to show a good strengthening.


Thursday, August 13


Thursday will begin with a weakening of the Australian dollar after the release of data on unemployment in the country. The indicator should rise from 7.4% to 7.6%. In the evening hours, you should pay attention to the data on the number of applications for unemployment benefits. Their number is expected to decrease, which will positively affect the rate of the American currency.


Friday, August 14


Friday could be a tough day for the single European currency as Q2 GDP data are released. The indicator should demonstrate an acceleration in the rate of economic decline from -3.1% to -15.0%.


And the US dollar, on the contrary, on Friday will receive additional growth stimulus in the form of data on retail sales, the growth rate of which should accelerate from 1.1% to 1.9%.


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Risk Warning:
Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.
Foreign exchange trading carries a high risk of losing money due to leverage and may not be suitable for all investors. Before deciding to invest your money, you should carefully consider all the features associated with Forex, as well as your investment objectives, level of experience, and risk tolerance.