All eyes on the US interest rate decision

14 December, 2015

Ashley Finill

With the festive season fast approaching this week will see data releases coming out of all the major currency zones. Importantly all the attention will be on the US as we eagerly await the FED’s crucial decision on Wednesday on whether interest rates are set to rise the US. This has been an ongoing topic in the last year and with the big announcement to be made is likely to cause high volatility in the currency market whichever way it goes. The Euro has been on a steady downward trend over recent months which is partly down to the anticipation of the interest rate rise in the US. The consensus is that interest rates are to increase to 0.375% from the current 0.250%, should this happen the Euro is expected to weaken against the Dollar significantly and also lose ground against the Pound. For those of you buying dollars it may be wise to secure them before Wednesday to save any losses from this very important data release.

Monday sees a quiet to start to the week no important data to note but Tuesday will bring movements in the currency markets as overnight the Reserve Bank of Australia releases meeting minutes from the their interest rate decision a fortnight ago, this could see further gains following a comeback from losses toward the end of last month. In the morning the UK announce Produce Price Index and Consumer Price Index and in Germany and the Eurozone the ZEW survey will be released. Later in the afternoon major data releases come from across the pond with the US reveal Consumer Price Index data and The Bank of Canada’s governor Stephen Poloz holds a press conference in relation to the financial system review.

Here is a schedule to the week ahead:

10:00am – Eurozone – Industrial Production
16.30pm – US- 6 month bill action

00.30am – AUS – RBA’s Meeting Minutes & House Price Index
9.30am – UK – Produce Price Index & Consumer Price Index
10.00am – Eurozone – ZEW Survey
13.30pm – US – Consumer Price Index
15.00pm – US – NAHB Housing Market Index
16.45pm – Canada – BoC Governor Stephen Poloz

08.00am – Eurozone – Non-Monetary Policy’s ECB meeting
09.00am – Eurozone – Markit Services PMI, Markit Manufacturing PMI & Markit PMI Composite
9.30am – UK – ILO Unemployment Rate
10.00am – Eurozone – Consumer Price Index
19.00pm – US – FED Interest Rate Decision
19.30pm – US – FED’s Monetary Policy Statement & Press Conference
22.45pm – NZD – Gross Domestic Product

00.30am – Aus – RBA Bulletin
09.00am – Eurozone – Economic Bulletin
09.30 – UK – Retail Sales

03.00am – Japan – BoJ Interest Rate Decision
05.00am – Japan – BoJ Press Conference
13.30pm – Canada – Consumer Price index
14.45pm – US – Markit Service PMI & Markit PMI Composite

With this extremely busy week on the data front there will be high volatility throughout with all major currency pairings so keep in contact with your account manager here at currency index for expert analysis and advice.