The first month of autumn continues to please with the volatile news. In relation to the positive signals in the negotiations on the North American trade agreement (NAFTA), the Canadian dollar is gaining attractiveness. Canada has already agreed to put American milkmen on its market, which was one of the basic requirements of the United States. This week negotiations will continue, but not only negotiations will hold good in the power of the Canadian dollar.
By September 21, the trading five-day period will have begun with the volume of foreign investment in Canadian securities for July. The indicator does not promise anything positive, because, in July, it was not clear how and when the NAFTA negotiations would end. On Tuesday, we will find out the volume of sales in the manufacturing sector, but the most volatile day for the Canadian dollar will be Friday.
Upon the opening of the American trading session, there will be releases of inflation, retail sales indices, and their volumes. In retail sales, the indicator is expected to exit from the red zone, which is already a positive signal. After all, retail sales are formed by consumers, which makes up the lion's share of the GDP of any country. Positive data on inflation will increase the chances of the rise of an interest rate by the Bank of Canada in October, which is another bullish factor for the Canadian dollar.
The Eurozone will start the week with the release of inflation after which the chief economist of the ECB, Peter Praet, who has already demonstrated how volatile his speeches can be will have a public speech as well. Changes in inflation in annual terms are not expected, but in monthly terms, the indicator is expected to exit from the red zone, which is a bullish driver for the euro, especially taking into consideration Praet's speech. Later in the evening, another ECB member, Yves Mersch, takes up the baton.
On Tuesday as well as on Wednesday, the head of the ECB Mario Draghi will have a speech, summarizing the state of the EU economy as a whole. And on Friday, the Eurozone will report on business activity, the most interesting indicator will be precisely in the services sector. After all, the service sector in Euroblock is the main (after retail sales) driver of the European Union's GDP.
The US will also present several volatile news this week. So on Wednesday, the release of statistics on the number of issued building permits will take place, on Thursday, the Philadelphia Fed will publish an index of production activity. A little later that day we will find out about the state of sales in the secondary housing market. On Friday, the States will report on business activity.
A very busy week is ahead of us. It is worth recalling that the American president proposed a new trade agreement to the European Union. Details are not known yet, but intentions are positive. Also do not forget that the new US tariffs on Chinese goods with a volume of $ 200 billion will come into force very soon, which will put pressure on the currencies of the partner countries of China. Statistics are good, but we should not forget about the political, trade and geopolitical moods in the world.
The British pound can not decide its direction, the contradictory reports on Brexit from Britain and the EU do not allow the British pound to consolidate significantly. September began very positively for the Foggy Albion, although a strong dollar puts pressure in the pair. The British Ministers note the positive signals and the convergence of the parties to the consummation of a deal, and on the other hand, the EU denies the progress in the negotiations. The Irish border is still the biggest problem.
According to the news in the economic calendar, the most volatile will be Wednesday and Thursday. Firstly, Great Britain will publish inflation data for August in annual and monthly terms. The monthly growth in August is expected to be 0.5%, when the year-on-year decline is expected to be 0.1%. Growth in monthly terms can be attributed to the weakness of the pound sterling, the release of indicators above expectations is clearly a bullish factor.
As we have said earlier, on Thursday, there will be releases of indices and retail sales volumes, retail sales are an indicator of the purchasing power of the population. The more people spend money inside the country, the higher the retail sales are, the higher the GDP become, the greater the chances of overclocking inflation become as well. Indicators that are above expectations will have brought about a possible increase in the interest rate by the Bank of England by October-November next year.
Last week, we marked a triangle on the gold price chart. You can observe the breakdown of the lower boundary of the triangle, disconnecting it from the resistance will confirm the further downward movement of the asset. There is a lot of news this week, so gold will not be bored. Volatile news on the US dollar is described in details in the pair EUR / USD, strong statistics can and should be worked out at the price of gold.
Currently, the US dollar is extremely strong, more rapid strengthening of the US currency is prevented by its own president. President of the United States Donald Trump has repeatedly shown how well he can manipulate the mood of investors. He does not need a strong dollar, because it hinders trade, making American goods more expensive for holders of other currencies.
This week, details on the forthcoming new US trade agreement with the EU, the progress of US-Canada talks on NAFTA, the change in US-China trade relations, or the further escalation of trade relations may become known.