Forex forecasts and market outlooks

At 08:00 (GMT+2), the UK data on changes in the volume of retail sales for August will be published. It is considered an indicator of consumer spending and reflects the total number of receipts for purchases in retail stores. A high reading is positive for the pound, while a low reading is negative. The indicator is expected to grow by 0.7% MoM and by 3.0% YoY.

At 01:30 (GMT+2), be data on changes in the national consumer price index for August will be released in Japan. The indicator reflects the assessment of price dynamics obtained by comparing the retail prices of the corresponding basket of goods and services. The high value of the indicator is positive for the yen. The indicator is expected to grow by 0.6% YoY.

Weekly data on initial jobless claims from the USA will be released at 14:30 (GMT+2). The indicator measures the number of people who applied for unemployment benefits for the first time in the past week. These data are collected by the Department of Labor and published in a weekly report. Initial Jobless Claims indicator is used to measure the state of the labor market, since an increase in the indicator means that fewer people are hired. It is expected that the indicator may decrease from 884K to 850K.

Bank of England decision on the interest rate and the follow-up statement are due at 13:00 (GMT+2). If the regulator shows a "bullish" attitude towards the inflation forecast in the economy and raises the interest rate, this is a positive factor for GBP. Reducing the rate or maintaining it at the same level is regarded as a negative factor. It is expected that the regulator will keep the rate at the level of 0.1%.

The decision of the Bank of Japan on the interest rate will be published at 04:30 (GMT+2). In general, if the Bank of Japan is showing a "hawkish" attitude towards inflation outlook and raising rates, it is positive (or "bullish") for the JPY. Accordingly, if the regulator's attitude towards the national economy is "dovish", and the rate is maintained at the current level or decreases, this negatively affects the currency. It is expected that the regulator will leave the rate at the level of –0.1%.

Australian Unemployment Rate data for August are due at 03:30 (GMT+2). The indicator records the percentage of the number of unemployed citizens older than 18 to the total number of the population able to work. Only registered unemployed citizens are counted. The indicator is expected to increase from 7.5% to 7.7%, which may put pressure on AUD.

At 00:45 (GMT+2), the data on New Zealand GDP in Q2 2020 will be released. The GDP is the main indicator reflecting the state of the national economy. It takes into account domestic consumption, investment, government spending and exports. The figure is expected to decline by 12.8% QoQ and by 13.3% YoY. The implementation of the forecast could put pressure on NZD.

At 20:00 (GMT+2), the US Federal Reserve's decision on the interest rate will be announced, followed by a press conference. The interest rate affects the rates of commercial banks and other financial institutions, as well as the exchange rate of the US dollar. If the Fed raises rates, it indicates its hawkish view of inflation and strengthens the USD. The rate cut is regarded as a sign of economic and price risks; therefore, it is accompanied by a weakening of the currency. If the rate remains unchanged, the markets' attention turns to the FOMC statement and its rhetoric on inflation.

At 14:30 (GMT+2), the US data on the change in the level of sales in the retail sector for August will be released. It is the main indicator of consumer spending. The value is expected to rise by 1.0%, which may have a positive effect on the USD.

At 14:30 (GMT+2), data on the core consumer price index for August will be released in Canada. The indicator is published by the Bank of Canada and does not include volatile components such as fruits, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transport, and tobacco products. This indicator is considered a key indicator of inflation in Canada. Overall, its strong performance suggests a hawkish response from the Bank of Canada and is therefore positive for the Canadian dollar.