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Light Trading Week Ahead, Investors Taking Their Clues from the Stock Market

Posted: Tuesday, October 19th, 2021

Estimated Reading Time: 2 minutes

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The trading week ahead is light from an economic calendar’s point of view. Instead, developments in the stock market will guide FX traders.

The economic calendar for the week ahead is light, as no important economic data is scheduled. As such, traders and investors will turn to the stock market for guidance.

However, some events are worth mentioning, and two of them are already behind us. One comes from the Bank of England, which left no doubt that it is coming closer to raising the interest rate soon. Over the weekend, the Bank of England’s Governor participated in a virtual panel discussion at the G30 International Banking Seminar and hinted at a rate hike to come. The British pound, therefore, started the trading week with a bid tone.

Another is the Chinese GDP or gross domestic product, which came out softer than the market expected, out at 4.9% vs. 5% expectations. The slowdown of the Chinese economy, although a moderate one, may pose risks to other economies.

U.K. Inflation Due on Wednesday

Perhaps the most important economic event this week will be the U.K. inflation, expected to be released on Wednesday. In light of Governor Bailey’s message from over the weekend, the inflation data might be just what the market expects to confirm the upcoming rate hike. As such, the focus will be on the British pound pairs on Wednesday.

Finally, the trading week ends with the manufacturing data being released on Friday in all major economies – the United States, the Euro area, and the United Kingdom. The Treasury Currency Report might also be released on the last trading day of the week, although there is no fixed date. This report alone is enough to move the currency market, so traders must be aware of its importance and ready for increased volatility if released next Friday.

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