HomeEconomic News for Forex traders to Consider this week

Economic News for Forex traders to Consider this week

The week ahead is light in economic events that regularly move financial markets. As such, perhaps it is a good idea to look at events that recently happened, and that might have implications for various financial market participants, depending on the assets they trade. 

Highlights from the Business and Financial World To Consider This Week

The 3rd largest company in the world by market capitalization, Amazon, took investors by surprise last week. It announced that its CEO, the charismatic Jeff Bezos, steps down from the role and will become executive chairman. His pick for a successor, Andy Jassy, was the head of the cloud computing business at Amazon.

Oil is on a run higher this year. It has the best start of the trading year since more than thirty years since the Brent futures were launched. The WTI crude oil price reached as high as $59, a level hard to think of given the dive in 2020. Fueled by OPEC+ production cuts and the prospects of stronger economic recovery once more people get vaccinated against the COVID-19 virus, the crude oil price looks constructive and targets a move above $60. This will help oil and gas companies that have seen their profits diminishing considerably in 2020 as the price of oil turned negative.

It is finally official – the GDP data for last year is public now. The economic output in the Euro area declined by 6.8%, but the United States held well considering the pandemic – its economy only shrank by 3.5%. Still, the divergence between the two largest economic blocs in the world are not seen in the exchange rate.

The EURUSD trades again with a bullish tone, up from below 1.20 last week to above 1.21 at the time of writing this article, despite the fact that the monetary policies of the two central banks diverge. While the ECB keeps the deposit facility rate in negative territory for many years now, the Federal Reserve of the United States does not consider negative rates. Moreover, the balance sheet expansion as a result of the recent crises (i.e., financial and health crises), has led to the ECB to have a larger balance sheet that should weigh on the common currency too. So far, it does not.

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