Euro and USD Dramatic Fall - Weekly Report

What other surprise may we expect from the markets this week?

It’s fairly quiet on the market data front on Monday, instead, the headlines will likely continue focusing on the dramatic falls in the Euro and the USD after the Swiss National Bank went further into negative interest rates, and removed the minimum exchange rate of 1.20 CHF per Euro. Currency and stock markets were in a panic over the SNB’s move and combined with falling oil prices, Monday’s trading events are set to be largely news driven.

At 02:00 on Tuesday, China releases GDP figures for the fourth quarter of 2014, which are expected to drop from 1.9 percent to 1.7 percent on a quarterly basis. Germany is the next stop on our trading calendar, when Europe’s largest economy releases ZEW Economic Sentiment survey results for January at 10:00am. It’s expected to rise from 34.9 to 39, but prepare for any surprises after last week’s action on the Euro, which was described as ‘carnage’ by some analysts. New Zealand Dollar traders could have a trading opportunity at 21:45, when the country releases Consumer Price Index numbers for the last quarter of 2014, previously at the level of one percent.

On Wednesday, the Bank of England releases its minutes at 09:30, with no surprises expected in the form of interest rate policy - but then again, after the SNB’s statement sent waves of volatility around the asset markets, this is no time for complacency. At 15:00, another central bank – Canada’s this time around – releases its monetary policy statement and Interest Rate decision, previously at the level of one percent. Will Canada lower or raise its interest rate in light of the fact that its revenues are likely to be hit by the drop in oil prices? This question will be answered on Wednesday the 21^st by the Royal Bank of Canada.

Possibly the biggest trading event is on Thursday at 12:45, when the European Central Bank announces its interest rate decision, followed by a press conference and policy statement. With continuing uncertainty in the markets, fears over deflation, and constant fluctuations in asset values, Euro traders could be in for another volatility ride on Thursday.

Finally, on Friday the 23^rd, Canada is in focus once again when it releases annual Consumer Price Index numbers for December at 13:30, previously at the level of two percent.