Fundamentals: 11/22/21 - 11/26/21
Reassuring news for the USD.
Last week, the news was again very favorable for the Dollar with better than expected figures, once again. If there was any doubt about the economic health of the US, the results prove the opposite every week.
The FED had announced its optimism for the future and had announced that it wanted to wait and see how the economic situation in the country would evolve before making any decision regarding interest rates. Was this a successful strategy, or just the calm before the storm? No one knows, but the strategy seems to be paying off for now.
Last week’s major news regarding inflation, a highly watched indicator:
CPI – 0.9% vs 0.6% expected, which is excellent for the USD.
Core CPI – 0.6% vs 0.4% expected, which is excellent for the USD.
However, inflation remains the focus of all concerns and a single piece of bad news could reignite the flame of uncertainty and panic in the markets. In Europe too (EUR pairs), inflation is raging with numbers well above the usual.
Indeed, the ECB is responsible for keeping inflation below 2% in the Eurozone as a whole, yet many countries (France, Germany …) are exceeding 3 – 4% inflation with prices continuing to rise. In addition, Austria is the first European country to re-confine following the 5th wave of the virus … increasing once again the tension of the European economy. As a result of this climate of uncertainty, the Euro plunged again this week against the dollar.
The economic news to watch closely this week:
Tuesday, November 23rd
EUR – German Flash Manufacturing PMI & German Flash Services PMI
This news is always very important to watch as Germany is considered the economic engine of the Euro Zone. Therefore, its results can greatly impact the Euro’s price.
Wednesday, November 24th
NZD – Official Cash Rate & RBNZ Monetary Policy Statement
This is the most important news of the month for the NZD. The central bank gives details on the upcoming economic policy and gives an update on the situation of the country.
USD – Prelim GDP q/q
GBP is the broadest measure of economic activity and the primary gauge of the economy’s health
USD – Core PCE Price Index m/m
This is rumored to be the Federal Reserve’s favorite inflation measure. Therefore, this news could have a strong impact on the market as inflation is the focus of all discussions.
USD – FOMC Meeting Minutes
This is a detailed record of the FOMC’s most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates
Thursday, November 25th
USD – Bank Holiday
Beware, there will be no New York session on this day and the movements may be different from what you usually see, with less volume in the market.
GBP – BOE Gov Bailey Speaks
As head of the central bank, which controls short term interest rates, he has more influence over the nation’s currency value than any other person.
We hope that this article will help you prepare for another week of trading, and that we have helped you to better understand what happened the week before. We put education first and do everything we can to help you progress.
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Have a great trading week everyone, and thank you for your loyalty.