We bring you another summary of the most interesting economic events that have had an impact on the currency markets.
Last week was very unusual for its increased market volatility, which was caused by a series of interest rate decisions in several countries.
Our eyes were mainly on the middle of the week when these decisions were made.
On Wednesday, the Bank of Japan left its monetary policy unchanged, as expected. However, it offered a weaker outlook for exports and output, which reinforced expectations that the Bank would maintain its stimulus. Japan's economy remains in dire straits, but there is light at the end of the tunnel. The Japanese economy will probably recover once the pandemic starts to subside... Everything is trending. Depending on these economic events, we could see the Japanese yen weakening on most currency pairs.
On the same day, the Fed offered us its fundamentals, leaving interest rates unchanged. It was, however, more hawkish than expected and the strengthening of the US dollar did not take long. Fed Board of Governors Chairman Jerome Powell has stated that there will be a gradual tapering that will end around mid-2022. The path of the economy, however, continues to depend on the course of the virus. Advances in vaccination are likely to continue to reduce the impact of the crisis on the economy, but risks to the economic outlook remain.
The very next day we were introduced to the Bank of England, which again left interest rates unchanged. At that meeting, the Committee considered that the current monetary policy stance remained appropriate.
And what's in store for the current trading week?
We expect this week to be a bit quieter than the previous one. However, our eyes will remain on Wednesday's GDP in the UK and the US. During the week, we will have some interesting speeches by the President of the European Central Bank, Christine Lagarde.