A Week on the Market (06/15 - 06/22): Central Banks and Monetary Policies

A Week on the Market (06/15 - 06/22): Central Banks and Monetary Policies

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The new week of June will bring about plenty of statistics and continue the season of Central Bank sessions. You will definitely not get bored; for now, investors are more interested in safe-haven assets, which may change the local exchange trend.

GBP: all eyes on the Bank of England

GBP: all eyes on the Bank of England

The Bank of England will have a session on Thursday, June 18th. For now, the most anticipated thing is the comments on the state of the economy and the forecasts of further steps. The comments of the BoE sound rather confident. Now we are wondering what instruments the Bank will use to support the economy. Such comments may sustain the GBP/USD rate. The interest rate will most likely remain at 0.1% per annum. There is no room or reason for a decline. The volume of the asset buy-back program stays without change at 645 billion GBP.

The Bank of Russia: the intrigue of the week

The Bank of Russia: the intrigue of the week

One of the most ambiguous expectations is connected to the session of the Bank of Russia. The key rate is at 5.5% per annum; it was revised in April last time. The signals given by the CB indicate an abrupt and substantial decline. The regulator has voiced the perspective of decisive steps; we only need to understand what the CB means under "decisive".

Judging by inflation that the CB holds at a phenomenally low level, they may easily drop the rate by 100 or even 150 base points. The USD/RUB quotations already anticipate a decline of 100 base points. At the moment, the RUB rate may leap up - the CB does not sit idle and tries to create mild conditions for the economy. However, strategically speaking, it changes nothing.

Japan: all stimulation is on

Japan: all stimulation is on

The Bank of Japan will also have a session this week, but things are quiet here. At the end of May, the regulator decided to start additional stimulation other than losing time. The measures are working, so the session will be "through-pass". The interest rate remains at -0.1% per annum. For the JPY, the news is neutral; however, the rate may be supported by the USD/JPY being a demanded safe-haven asset, as long as investors are seriously afraid of the second wave of the coronavirus.

USD: the Fed actions are in the quotations already

USD: the Fed actions are in the quotations already

This week, the head of the Federal Reserve System Jerome Powell will deliver a speech. At the Fed session in June, he was a rather gloomy realist, for which he got scolded by Donald Trump on Twitter. We are anticipating the new episode of the comic drama "Trump vs Powell": ambitions against common sense, vigor against dull numbers. Trump has already stated that he knows the data on the economy better than the Fed does. We wonder if his tone will change after Powell's comments and how the EUR/USD will react. Most probably, it will not react at all.

AUD: the statistics may drag it down

AUD: the statistics may drag it down

This week, Australia will issue plenty of statistics, including employment information. Upon renewing the highs with the USD, the AUD/USD started correcting, and if the statistics turn out weak, the decline may speed up.




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