U.S NONFARM PAYROLLS JOBS REPORT AND CENTRAL BANK INTEREST RATE DECISIONS HEADLINE
INTEREST RATES AND U.S JOBS
The Bank of England are widely expected to raise interest rates by 0.25 percent this coming Thursday, after slashing interest rates in 2016, following the United Kingdom's decision to leave the European Union. The U.S Federal Reserve are expected to keep interest rates unchanged this week, as inflation remains weak, however U.S policy makers are expected to pave the way for a December rate hike.
The U.S Nonfarm Payrolls Job Report is also set to be released on Friday, with the American economy expected to have created 300,000 jobs in October, which is a sharp rebound from the –33,000 figure seen during September. The high impact economic calendar also has a number of other key data releases this week. On Tuesday we see the Bank of Japan meet to decide on monetary policy, and we also see the eurozone releasing CPI data for the month of October on the same day.
MONDAY October 30th, U.S Core Personal Consumption Expenditure
Core Personal Consumption Expenditure is the average amount of money that U.S consumers spend in a month. Core PCE excludes seasonally volatile products such as food and energy in order to capture an accurate calculation of the expenditure. It is also a significant indicator of U.S inflation. A high reading is bullish for the U.S dollar while a low reading is bearish for the U.S dollar.
Tuesday October 31st, Japanese Monetary Policy Decision
The BOJ are expected to keep interest rates at record low-levels on Tuesday, however the Bank of Japan's Monetary Policy Statement and market commentary may differ slightly, after incumbent Prime Minister Shinzo Abe's recent sweeping victory during the nation's general elections.
The USDJPY pair remains bullish while trading above the 113.43 level. A hawkish BOJ policy statement should support further upside towards the 114.50 and 115 levels.
A more dovish BOJ policy statement than financial markets are expecting, should support USDJPY selling below the 113.43 level, towards the 112.90 and 112.58 levels.
Wednesday November 1st, U.S FED Interest Rate Decision
The U.S Federal Reserve are expected to keep interest rates unchanged at 1.25 percent on Wednesday, however financial markets expect the FED Chair Janet Yellen to confirm a December rate in the U.S hike remains on course. Should the Federal Reserve strike a hawkish tone about the inflationary outlook of the U.S economy, it should generally be taken as positive for the U.S dollar index.
Thursday November 2nd, BOE Interest Rate Decision
The Bank of England are widely expected to increase interest rates on Thursday by 0.25 percent, bringing the overall rate of interest up to 0.50 percent. Bank of England policy makers have previously communicated to financial markets that rising inflation and better than expected growth figures, have tipped the balance in favor of gradual rate increases in the UK economy.
The British pound is likely to react favorably to a rate increase from the Bank of England. The GBPUSD pair should advance to the upside once clearly above the 1.3220 level. Buyers will likely target the 1.3360 and 1.3420 levels.
Should the BOE disappoint investors, a large sell-off in the British pound should follow. Declines in the GBPUSD pair below the 1.3067 level should encourage further selling towards the 1.2950 and 1.2880 levels.
Friday November 3rd, U.S Nonfarm Payrolls Job Report
The October Nonfarm Payrolls Job Report represents the number of people on the payrolls of all non-agricultural businesses in the United States. The monthly changes in payrolls can be excessively volatile, with this month's figure expected to differ by 270,000 from the previous month.
A higher jobs reading is usually seen as positive for the U.S dollar index, while a lower reading is usually seen as negative for the U.S dollar index.