Forex forecasts and market outlooks

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.

At 14:30 (GMT+2), the US data on the volume of retail sales, excluding cars, will be released. The indicator reflects the total sales of retailers of all sizes and types excluding car dealerships and is the main indicator of consumer spending. The indicator is expected to grow by 0.9% in August. The report is leading, and the data may be revised in the future.

The GBP/USD pair is showing a decline in trading on Wednesday amid the publication of negative statistics for the British economy.

The pair continues corrective gains, trading near 0.6725.

USD declines against JPY during today's Asian trading session, developing an ultra-short term downtrend that formed earlier this week. The pair is losing about 0.1% and testing the level of 105.25, the lowest since August 28, for a breakdown.