Intraweek analysis: Events likely to impact forex trading

NEW YORK (Forex News Now) – This week will have a couple of key announcements that traders should be focused on, as their importance stands head and shoulders above the rest. With a relatively light economic calendar this week, these moves could be slightly exaggerated as well.

• On Tuesday, the Bank of Canada will release its Rate Statement at 13:00 GMT. While the actual Overnight Rate is released simultaneously, most analysts do not expect a change from the current 1.00%. However, traders will be paying attention to the statement for any potential clues as to what the Canadians will do next. Any hint at a rate change in the near future will have certain effect on the Loonie.

• On Thursday, the Chinese government will release its Consumer Price Index (year over year) at 2:00 GMT . The CPI is expected to come in at 3.6%, and will gauge how inflation is doing in the Chinese economy. Any surprise to the upside will be bullish for equities, and “riskier” currencies like the Australian Dollar, as it means that Oz will probably be exporting more minerals and precious metals to the Chinese.

• The Gross Domestic Product (quarter over year) for the Chinese economy, another important announcement is coming out at the same time on Thursday. This has been one of the most important forex trading news announcements for the last few years. The number is expected to be 9.5%, and any surprise to the up or down side should move currency markets, as well as stock markets around the world.

The whole world watches China to see possible hints at what kind of global trade is going on around the world, as the Chinese are the suppliers to most of the West. Because of this, a weak number could cause a sharp selloff in stocks and export-driven currencies. Conversely, a upside surprise means that the exporters are going to do well.