The season of vacations has ended and Forex market trading should become more active. Traders face rather busy first week of autumn as many central banks will announce their rate decision. What can be expected for the dollar during the trading week?
Federal Reserve Chairman Ben Bernanke drove the US currency lower last week, giving hints that the third round of quantitative easing is possible. The Fed will not hold its policy meeting this week, but that does not mean that there will be nothing interesting from the United States to watch for. On the contrary, the employment data will be released on Friday and it is expected to be moderately positive. If that is the case, there will be less incentive for the US central bank to act immediately, meaning that QE3 will be postponed, and that, in turn, should benefit the greenback.
The interest rate decision of the European Central Bank on Thursday is another very important event. Analysts expect that ECB President Mario Draghi will reduce the main rate 0.75 percent to 0.5 percent and he may even initiate a bond buying program. In that case the dollar will gain on the euro and will fall against other currencies.
The central banks of Great Britain, Canada and Australia will also announce their policy decisions this week. Specialists predict that there will not be any change to the policies.
All in all, this week should be rather important for the future of the dollar. Yet it is rather hard to predict what the week will bring. Traders should be cautions in trading. It is rarely wise to take risk ahead of major events.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.
Be First to Comment