Global-View Forex -- interest rate -- US dollar interest rate -- euro interest rate and others
The purpose of fundamental forex analysis is to forecast the future value of a currency. Interest rates are a key element in that process. The US dollar interest rate and the euro interest rate outlooks are the first tier relationships in forex interest rate relationships. The tables below show the us dollar interest rate target for the FOMC, the euro interest rate target for the ECB and comparable forex interest rate targets for the next five most important central banks. Use these data for your foreign exchange currency forecasting.
The professional forex traders at GVI have assembled acomprehensive array of monetary policy indicators for those trying to anticipate interest rate moves as a factor in exchange rate movements.In banking, foreign exchange is the buying and selling of actual balances by financial institutions who daily execute the transfer of substantial amounts of funds from one currency to another. Interest rates are the cost of funds that are traded and thus affect the value of one currency relative to another. It is the role of Central Banks tocontrol the price of short-term money (e.g. overnight to 3-mo interest rates) via open market operations and control of the money supply. Central Banks use monetary policy to control inflation. Almost all central banks target inflation to one extent to another.
The price of long-term money (e.g. 2-yr to10-yr bonds) is determined by the marketplace and reflects the outlook of investors and borrowers for economic growth and inflation in the long term. Generally, hot money tends to flow from where money is cheapest to where yields are highest. Long-term investors tend to seek out the currencies with the highest real (inflation adjusted) yields, rather than the currencies with thehighest nominal returns.
The TABLE below is updated daily by GVI and provides the latest readings for short-term interest rates (central bank target andthree-month) and daily changes. It also indicates where futures markets feel 3-mo rates will be at various future times. Included as well is the current official target rate for money, the date for the next policy meeting, and the GVI outlook for that meeting. The links below provide access to charts of short- and long-term interest rates for selected economies. There is also a chart showing how the futures forecast for interest rates have been at various points in time in the recent past. Also included is a table of the inflation measure that the central bank in question is targeting. Above target levels imply that interest rates could be tightened in the future while below target growth implies lower rates.
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GVI Trading. Potential Price Risk Scale
Mon 10 Sep 2018
AA: Major, A: High, B: Medium
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan
John M. Bland, MBA
co-founding Partner, Global-View.com
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