Key Economic Events and Reports of the Week Ahead
The Fed held a meeting this week and signaled that it will conduct monetary policy tightening much faster than its peers and faster than market participants expected. Now rumors are centering around a possible Fed rate hike at the next meeting by 50 bp.
Next week the decision on the interest rate will be made by the Bank of England and the RBA. Both central banks are expected to raise rates in response to inflation, which should have a positive impact on the GBP and AUD, as the Banks are likely to hint that they will continue their tightening cycles. In addition, the decision on monetary policy will be taken by the ECB and there is a high risk that its passive stance will drive Euro decline towards 1.10 against the dollar.
The NFP report closes next week's economic calendar and strong job growth should strengthen the likelihood of a 50bp Fed rate hike in March, potentially helping USD to resume the rally.
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