Forex news and the most important economic events this week 14 to 18 August

Markets are awaiting a lot of important forex news in the form of the minutes of the last Federal Reserve meeting scheduled for next week, as investors search for more hints about the timing of the next US interest rate hike, and how the central bank plans to restore its balance sheet.

Market players will also be watching key economic data in the US, keeping in mind the monthly retail sales report.

In the UK, market participants will look to the FMCG data for more indications of the continuing impact of the Brexit decision on the economy.

Forex news

Forex news

The most important forex news this week:

Minutes of the Federal Committee meeting

Important forex news is that the Federal Reserve will release the minutes of its latest policy meeting on Wednesday at 2:00 GMT (1800 GMT).

The Fed did not change interest rates, as was widely expected after its July 26 meeting, and is expected to start trimming its large holdings of bonds "relatively soon".

The central bank also noted the weakness in US inflation more clearly than before. The recognition of soft inflation led to expectations that the Federal Reserve's plan to raise interest rates for the third time this year might be delayed.

Futures traders trade in about a 35% chance of another rate hike by December.

US retail sales

The Commerce Department will release data on retail sales for July at 8:30 a.m. US time (1230 GMT) on Tuesday. Expectations are that the report will show retail sales rising by 0.4% last month, following a decline of 0.2% in the preceding month.

Underlying sales are expected to rise 0.3%, after declining 0.2% in June.

North Korea-related headlines from the White House will also be in focus. An investigation into President Donald Trump's campaign's ties to Russia will remain on the agenda.

UK inflation figures

The UK Office for National Statistics will release data on consumer price inflation for July at 0830 GMT (4:30 AM US time) on Tuesday. Analysts expect the annual consumer price index to rise by 2.7% compared to 2.6% in the previous month.

Besides the inflation report, traders will pay attention to the monthly unemployment data and retail sales data for more hints about the strength of the economy.

The Bank of England cut its forecasts for growth and wages earlier this month, and appeared unenthusiastic about raising interest rates, as it warned that Brexit was putting pressure on the economy.

German GDP for the second quarter

Germany will publish a preliminary report on economic growth for the second quarter at 6:00 GMT (2:00 US time) on Tuesday. The eurozone's largest economy is expected to grow 0.7% in the April-June period, compared to 0.6% growth in the previous quarter.

The Eurozone will release revised data on growth in the second quarter, on Wednesday at 0900 GMT (05:00 US time). Preliminary estimates published earlier this month showed that the region's economy grew by 0.6% in the three months ended June 30, accelerating by 0.5% in the first quarter.

China's industrial output

China will release data on industrial production in July at around 0200 GMT on Monday, on expectations for an increase of 7.2%, compared to a rise of 7.6% in June.

Meanwhile, the Asian country has published reports on fixed asset investment for July and retail sales.

The Chinese economy grew at a faster-than-expected rate of 6.9% in the second quarter, matching the pace of the first quarter, supported by steady exports, industrial production and consumption.

Mohamed Abdel Khaleq

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