This week is promising some interesting macroeconomic events and, as usual, a flow of different statistics of various importance. Investors have had a rest and show no fear of volatility.
The Fed is ready to decrease the rate
For one of these days, another session of the US Federal Reserve System is planned. It seems highly probable that the interest rate is going to be decreased to 1.50-1.75% per annum. This decrease is built in the EUR/USD quotations already but the market is going to be interested in another thing: is the Fed ready to further soften the credit and monetary policy, or will it make a pause? The EUR/USD behavior will depend on this, and fluctuations between 1.1000-1.1150 are not excluded.
The ECB: change of power
On Friday, the head of the European Central Bank Mario Draghi will be replaced by Christine Lagarde. Stimulation of the Eurozone economy has begun, the QE is functioning, but the investors are seriously worried that the ECB will have to decrease the rate very soon. For the EUR this may become a mid-term pressure factor; however, Lagarde is unlikely to speak about this issue right upon entering the office.
The US GDP: the devil is in the detail
Here, we have another driver of the main currency pair. This week, the USA are publishing the statistics of the economic development in the 3rd quarter. The average forecast is an increase of the GDP by 1.6%, while in the previous quarter, the economy grew by 2.1%. What is more, the data of the 2nd quarter might be revised for the worse. It turns out that the US economy does need stimulation, which is bad news for the USD as it might weaken.
"Davos in the desert": the points of growth of the Saudi economy
This week, Saudi Arabia is hosting the Future Investment Initiative forum, also called "Davos in the desert". This year, the USA are not going to boycott it, which is a good sign for global investors and reduces the risk of the exchange assets. It is exiting to see how the kingdom will allocate its own oil income. The forum is unlikely to influence Brent significantly, though this is not impossible.
The Bank of Japan: not ready to decrease the rate yet
This week, another session of the Bank of Japan is planned. The decisions on the monetary policy and the interest rate are going to be made. The current rate is - 0.10% per annum and it is unlikely to change right now. The BoJ is not ready to enhance stimulation yet, being afraid of an increase in the national debt. However, it is obvious that the time for action is now, lest the economy slumps into the final version of crisis. For the USD/JPY, the preservation of the monetary policy is neutral news, in this case, and the instrument is likely to remain between 108.50-108.90.