OVERVIEW OF THE EU, UK, AUSTRALIA, NEW ZEALAND FOREX MARKETS,THE MOVERS AND SHAKERS.
The European Forex Market (session) is the second most active market after the US. Both the EU and the US share the largest economic relationship across the globe.
In this article we’ll focus on the key movers and shakers of this region and the effects on the currency pairs.
It should be noted that the UK is not a member of the EU as they left the union on 31st January 2020. However all these regions are closely related as they contribute a lot to each others trade volumes.
Major Currency Pairs In this Region
EUR/USD, GBP/USD, AUD/USD, NZD/USD, EUR/GBP, EUR/CHF.
Prerequisite Interpretations for the Data
European Economic Data: affects currency pairs for regions that fall within the European economic block. These are EUR/USD, EUR/GBP, EUR/CHF.
When the Euro is strengthening (‘bullish’) these currency pairs will rise/the conversion rate will increase. On the contrary when the Euro is weakening these currency pairs will crash, i.e the conversion rate will decrease.
Strengthening of the Euro occurs when the released macroeconomic data is in favour of the Euro whereas weakening occurs when the released macroeconomic data is not in favour (turns out unexpected) of the Euro.
UK Economic Data: affects GBP/USD, EUR/GBP etc.
When the GBP is strengthening (‘bullish’) the conversion rate GBP/USD will increase, the conversion rate EUR/GBP will crash. On the contrary when the GBP is weakening these currency pairs GBP/USD will crash and EUR/GBP will rise.
Australian and and New Zealand data: affects AUD/USD and NZD/USD respectively.
Sometimes data released from monetary bodies (Banks; ECB, BoE, RBA, RBNZ) has some minimal effect across all these four regions. This is due to the strong business relationship they share with other.
The Macroeconomic Data.
– ECB Interest Rate Decision: interest rate changes from the European Central Bank is a major factor in the volatility of currency conversion rates.
Previous Release Date: September 9th Value: 0.00%
Next Release Date: October 28th Expected Value: 0.00%
A higher than expected rate is bullish for EUR while a lower than expected value is negative and bearish for EUR.
– ECB Monetary Policy Meeting Report: any statements involving major economic policies from the president of the ECB shakes and moves the EUR in a big way. Traders should observe if the statements are either dovish/negative or hawkish/positive.
-GDP Growth Rate
–BoE Interest Rate Decision: Traders should always watch if any changes are made on the interest rate.
Previous Release Date: September23rd Value: 0.10%
Next Release Date: October/November Expected Value: 0.10%
– Inflation Rate
– Claimant Count Change
– Balance of Trade
– RBA Interest Rate Decision: Traders ought to watch if any changes are made on the interest rate.
Previous Release Date: September 7th Value: 0.10%
Next Release Date: October 5th Expected Value: 0.10%
A higher than expected rate is bullish for the Aussie while a lower than expected value is negative and bearish for the Aussie.
–RBA Meeting Minutes: is a detailed record of the banks most recent economic policies which directly influence the Australian economy.
Previous Release Date: September 21st Report:
Next Release Date: October 19th Expected Report: hawkish/dovish
A more dovish than expected report should be taken as bearish and negative for AUD whereas a more hawkish than expected report should be considered as bullish and positive for the AUD.
–RBNZ Interest Rate Decision: any changes made by the Reserve Bank of New Zealand on the interest rate has a great impact on the NZD.
Previous Release Date: August 18th Value: 0.25%
Next Release Date: October 6th Expected Value: 0.25% (may change)
A higher than expected rate is bullish for the NZD while a lower than expected value is negative and bearish for the NZD.
-Balance of Trade
-GDP Growth Rate
Disclaimer: The contents of this article are only for educational purposes and do not constitute financial advice. Ensure you research and consult before making any trading or investment decisions.