Friday ends the week with several high impact calendar events, which could impact on the value of several major FX pairs.
Friday May 31st, is an extremely busy day for economic calendar releases. There are several, key, high impact data releases, that will be published during Friday’s trading sessions, which have the power to impact on the value of the various currencies the data relates to. In the morning London-European session, the latest Italian GDP figure will be released, it’s expected to remain (just) in positive territory; at 0.1% YoY growth. But it’s Germany’s CPI, forecast to fall from 2.0% to 1.6% annually up to May, with a fall to 0.3% from 1.00% in the actual month of May, which FX analysts and traders will quickly focus on, when the figures are broadcast at 13:00pm U.K. time.
These various CPI metrics for Germany, could impact on the value of the euro, dependent on how FX markets react to the news; that the powerhouse of European and Eurozone growth, may be experiencing deflation and as a consequence reduced economic growth. Both the German Bundesbank and the ECB, have mandated the country to achieve sustainable inflation of 2.0%.
At 13:30pm U.K. time, the Canadian authorities will deliver the latest GDP growth figures for the economy. Reuters forecast that Canada’s economy has improved; up 0.3% in March, up 0.7% in the first quarter of 2019 and overall rising from 1.1%, to 1.2% annually. Such data could reinforce the decisions taken by the BOC, Canada’s central bank, as they maintained the overnight interest rate at 1.75%, whilst declaring that the economy was returning to strong growth. A 0.7% Q1 metric represents a significant improvement. Canada’s dollar fell during Wednesday’s interest rate announcement and subsequent monetary policy statement, to then recover marginally on Thursday morning. Analysts and FX traders may have already turned their attention to the improved growth forecasts.
The latest income and spending details for USA consumers will be revealed at 13:30pm U.K. time on Friday, published at the same time as Canada’s GDP, the value of USD/CAD in particular could come under intense speculation. Personal income in the USA is forecast to have risen in April, whilst spending is predicted to reveal a sharp fall; from 0.9% to 0.2%. Which could be an indication that U.S. citizens are reining in their spending, due to concerns over the economy and their income, in relation to their outgoings. The key PCE core reading for April, is expected to remain unchanged at 1.6%.
These scheduled releases, of three key economic data series relating to three economies, could impact on the value of: EUR, USD and CAD, naturally the correlations between all three currencies and the associated pairs, could become intense as the data is published. FX traders who trade these currencies specifically, or who trade calendar events exclusively, would be advised to diarise the releases, in order to potentially take advantage of any significant movements.