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Next week’s Forex forecast

Sergiy Zlyvko
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Rather mild comments of Fed chief Janet Yellen, which she did recently, and macroeconomic statistics indicate that the most likely U.S. regulators will not hurry to raise the rates. And it can be a factor that will deter a bit stronger dollar, but it does not interfere with its growth (unless economic reports will not bring cause for serious disappointment).

Japan next week will publish consumer price index data. If the indicator will show a decrease from the current 1.5%, we could be waiting for further weakening of the yen, as it is coupled with a potentially negative impact on the Japanese economy to improve sales tax may force the Bank of Japan to go the extra incentives. Furthermore, attention should be paid to the presentation by the Deputy Governor of the Bank of Japan Nakaso. Although it is likely he will repeat what Kuroda has already been said earlier (there was no need for additional stimulation). Among American statistics scheduled for publication, the report on orders for durable goods will be the most significant (Thursday, April 24). Recall that following February figure showed a sharp increase (2.2%). Saving positive momentum indicator and at least match it with the projections may support the dollar. It the data on consumer confidence from the University of Michigan should not be excluded from the field of view. If statistics from overseas will not disappoint, we can expect growth of pair to the level of 102.75 with a further aim to 103.40.

On Wednesday, April 23, data block on business activity in the manufacturing sector of individual countries and the Eurozone as a whole will be published. The indicators of France, Germany and the Eurozone are held in the growth zone. But signs of a slowdown (even if the barrier is not crossed 50) will indicate the precariousness of the economic recovery of the region and can put pressure on the euro, as they will be another factor in favor of additional stimulus from the ECB. Also the data from the IFO Institute for German business sentiment is noteworthy. After ZEW index of business expectations showed decline, it may contribute to a further decline of the euro. Mario Draghi can add little negativity, that repeats the mantra that the strong euro has a negative impact on the Eurozone economy and carries deflationary risks.

Next week the British pound will be cause for excitement. On Wednesday, protocol of the April meeting of the Bank of England will be published. Traditionally, the alignment of forces in the Committee will cause the interest. Provided that among its supporters the representatives of tighten monetary policy will be, the pound may receive additional support. Furthermore, attention should be paid to data on retail sales. If they continue to report started with the labor market and show growth, signaling a continuing recovery of the economy, the pound may again take an aim and going to the highs reached earlier mark and test 1.6840 mark, a break of which would open the way up to 1.6900.

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