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The Week Ahead: Currency Focus Shifts to Australia and New Zealand

The past week was clearly a busy one for currency markets, filled with major macroeconomic events and data releases, most notably the US Federal Reserve’s FOMC statement, the Bank of England’s rate hike, the Bank of Japan’s policy decision, and key data on jobs and economic growth from both the U.S. and Canada.

Other key developments this past week included President Trump’s long-awaited nomination of Jerome Powell, current member of the Fed Board of Governors, to lead the central bank after current Chair Janet Yellen’s term expires in February. This nomination was a safe one for Trump, and should help instill continuity to the Fed’s gradual path towards tighter monetary policy. In addition, this past week also saw the release of a new tax plan by the House of Representatives that potentially forms the beginnings of comprehensive tax reform and further US fiscal policy developments.

After such a busy week of currency-moving events, the week ahead slows down considerably, but still features two major central bank decisions – the Reserve Bank of Australia (RBA) on Tuesday and the Reserve Bank of New Zealand (RBNZ) on Thursday. Neither central bank is expected to make any significant policy or rate changes at this time, but the content of their policy statements will shift the currency market focus squarely towards the Australian and New Zealand dollars in the week ahead.

Here are some of the key events scheduled:

·        Monday, November 6:

o   New Zealand Inflation Expectations (Q/Q)

·        Tuesday, November 7:

o   Reserve Bank of Australia Cash Rate and Rate Statement

·        Thursday, November 9:

o   Reserve Bank of New Zealand Official Cash Rate, Rate Statement, Monetary Policy Statement, and Press Conference

o   China Consumer Price Index (Y/Y) and Producer Price Index (Y/Y)

o   US Weekly Unemployment Claims

·        Friday, November 10:

o   Reserve Bank of Australia Monetary Policy Statement

o   UK Manufacturing Production (M/M)

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