The markets look to the next week as it marks the start of a new trading month. Economic data remains on the forefront especially with the US nonfarm payrolls figures due on Friday. Following a weak print in September, investors will be keen to see how many jobs the US economy added.
In the UK, all eyes turn to the Bank of England’s meeting on Thursday. The central bank is expected to hike interest rates by quarter basis point this week. This comes amid a slightly better than expected GDP number.
Elsewhere, the BoJ meeting is also lined up over the week including the FOMC meeting on Wednesday. With a busy week packed with both economic data as well as three central bank meetings, the markets will be kept busy.
Here’s a quick recap into this week’s economic calendar for the currency markets.
Bank of England to hike rates
Officials at the Bank of England this week will be looking to raise the interest rates in the UK. After lowering rates to 0.25% marking a historic low, policymakers are looking to rein in inflation which surged to 3% last month. The decision to hike interest rates by quarter basis point comes as policymakers will have to debate the risks.
Wages in the UK have remained muted, rising on average of 2.1%. However, with inflation pushing higher and standing at a full percentage point above the BoE’s inflation target, the rate hike comes at a risk of further putting a squeeze on the UK households.
Although the preliminary GDP data released last week showed that the UK economy expanded at a pace of 0.4%, which surprised to the upside, growth remains fragile. The Brexit talks that continue to take place took a new turn as both parties are now seen preparing for a no-deal. The British pound remained volatile, and the initial gains on a rate hike speculation remain faded for now.
Read more: https://www.orbex.com/blog/2017/10/fx-week-ahead-boe-expected-hike-rates