Important fundamental events for the forex traders. Weekly outlook. 5th December – 9th December


The mighty dollar has slipped lower against its all major rivals in the forex industry in last Friday as the forecasted monthly wage growth declined to a great extent. However, data showed that they have added more jobs to the market but unfortunately it wasn’t good enough to give the dollar a strong boost in the market. U.S dollar index is one the crucial element that every trader look to measure the strength of the U.S dollar against a basket of six major currencies was also down by 0.27 percent. Currently, the value is slightly below the below the support level which gives early warnings to the traders that the value might fall from 100.75 to 100.25 in the upcoming week. The index was down by 0.68% in the last week and it’s the sharpest decline in the last four weeks.

According to the U.S labor department, they unemployment rate has been dropped by 4.6% and they have been able to add 178k jobs in the U.S economy which is the lowest level in nine years. According to the leading U.S economist, the non-farm payroll has data is still positive compared to the last month data of 175k.however the dollar becomes severely weak against its major rivals upon the release of the data even though the unemployment rate remained 4.9 percent. The last two-month performance of the U.S economy was significantly great and compared to that performance the average hourly earnings dropped by 0.1% from the month of October whereas the wage growth was 0.3 percent in the market. The recent U.S pending interest rate hike decision is also one of the major issues since investors over the world is cautiously waiting for the FED’s final decision. So researchers are suggesting that an imminent rate hike in the month December might not be suitable for the U.S economy since the recent performance is stable compared to the last few month performance.

The global economy is extremely confident that the FED will hike their interest rate in the month of December in their upcoming FOMC meeting minutes. But the recent poor performance of the U.S economy has created small confusion into the mind of leading economist whether the FED will hike their interest rate in the upcoming FOMC meeting minutes or wait for the more stable economy. According to FED rate hike monitor tools investors are now assuming that there is 91.3 percent chance of rate hike in the month of December. So if the FED comes up with an unexpected statement then the whole global economy will be greatly shaken. This strong expectation of rate hike has boosted the value of the dollar to an extreme level and some leading traders are thinking that whether they are buying the rumors or not.

The dollar becomes significantly weak against the Japanese Yen and it was down by 0.52% comprising 0.77% of the weekly gain. In general, higher interest rate expecting generally strengthen the currency in the forex market since higher borrowing cost makes it a lucrative investment. On last Friday the EURUSD pair tried to rally but ended up near the opening of the day and resulted in a flat movement. On the contrary, the Great Britain Pound found extensive buying power in the market for the event of the recent weakness of the U.S dollar. The Great Britain pound rose more than 1% against the mighty dollar and Euro. This intensive gain has eased the Brexit loss of the Britain economy to a great extent and professional traders are expectation further rise in the GBPUSD pair. On the contrary, the EURGBP pair sharply dropped in the market for near about 1.02% before the market closing.

On Monday the U.K government is going to release their data on service sector activity. Though it will not affect the GBPUSD pair significantly but traders are expecting a positive news release. On the contrary, New York FED President Dudley is going to deliver his speech about macroeconomic and traders will be cautiously observing that event to extract valuable trading information. The Aussie dollar is going to be extremely volatile on Tuesday since RBA is going to readjust their interest rates based on their current economic performance. Along with the RBA statement, the Canadian government is also going to release their trade balance report which is also going to have a minor effect on the Canadian pair.

On Wednesday Australia is going to release their third-quarter economic growth. This data is going to play a significant role in the next movement of the AUDUSD pair since a positive data might bring the buyers back into the market. If the Rate hike decision economic growth data comes in favor of the Aussie dollar then we will see a sharp rise in the AUDUSD pair since the current performance of the U.S dollar is a little bit lagging compared to the Aussie dollar. To be precise the next week has very little to offer to the U.S dollar and the green buck is most likely to remain broadly weak against its major rivals throughout the week. On the contrary, the upcoming week is packed with important news releases from the Aussie government that means lots of volatility will be seen in that pair. Professional traders will be cautiously observing the interest rate decision by the RBA since these are events which the fundamental factors in the longer time period.