The President of the National Bank of Poland, Adam Glapiński, tightened his rhetoric, pushing back the prospect of interest rate cuts in Poland to 2026. This decision strengthened the zloty, bringing the EUR/PLN exchange rate down to 4.26 and the USD/PLN exchange rate to 4.03, while at the same time reducing expectations for rate cuts in 2025. In the coming week, markets' attention will focus on Japan's GDP reading, US CPI inflation and interest rate decisions by the Fed, ECB, Bank of Canada and Swiss National Bank. Currency investors may be keeping a close eye on monetary policy plans in these economies.
Table of contents:
- Japan's gross domestic product (GDP) quarterly (Q3).
- US consumer price index (CPI) annualised (November)
- Canada's interest rate decision
- Swiss interest rate decision
- Eurozone interest rate decision
Monday 9.12, 00:50 CET, Japan's gross domestic product (GDP) quarterly (Q3).
From preliminary estimates, we know that Japanese GDP grew by 0.2 per cent (quarter-on-quarter) in Q3 2024 (0.3 per cent year-on-year), down from 0.5 per cent in Q2 2024. This is the second consecutive increase showing a rather fragile economic recovery. Business investment fell by 0.2 per cent after previously rising by 0.9 per cent. Private consumption, driven by rising wages, exceeded forecasts and government spending rose for the third consecutive quarter, supporting the economy after the summer's natural disasters.
Analysts forecast a confirmation of Japan's quarterly GDP growth of 0.2 per cent q/q.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on the JPY, while a lower-than-expected reading could be bearish for the JPY.
Impact: USD/JPY, EUR/JPY
Wednesday, 11.12, 14:30 CET, US consumer price index (CPI) annualised (November)
US CPI inflation rose to 2.6 per cent in October 2024 from 2.4 per cent in September. This was the first increase in seven months. Higher energy costs, especially natural gas, impacted the result, although food and transport prices fell. Jerome Powell, Fed chairman, announced that he was concerned about rising inflation caused by Donald Trump's announced tariff policy.
Analysts forecast a rise in US CPI inflation to 2.7 per cent.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on the USD, while a lower-than-expected reading could be bearish for the USD.
Impact: EUR/USD, USD/PLN
Wednesday, 11.12, 15:45 CET, Canada's interest rate decision
The Bank of Canada cut its main interest rate by 50 bps to 3.75 per cent in October 2024, accelerating the pace of cuts after earlier cuts of 25 bps. The decision was justified by a fall in inflation to 1.6 per cent in September, below the 2 per cent target, and a weakening consumption and labour market (unemployment rose above 6.5 per cent). The bank forecasts inflation close to the target in the near term and GDP growth of 1.2 per cent in 2024 and 2.1 per cent in 2025.
Analysts forecast another Bank of Canada interest rate cut of 25 bps, to 3.5 per cent.
Source: Tradingeconomics.com
A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected rate could act bearishly on CAD.
Impact: EUR/CAD, USD/CAD
Wednesday, 11.12, 15:45 CET, Swiss interest rate decision
The Swiss National Bank cut the interest rate by 25 bps to 1 per cent in September 2024, continuing its monetary easing cycle. The decision was justified by a decline in inflationary pressures, supported by the appreciation of the franc. Inflation stood at 1.1 per cent in August and inflation forecasts for 2024-2026 were lowered. GDP is expected to grow by 1 per cent in 2024 and 1.5 per cent in 2025.
Analysts are forecasting another 25bp interest rate cut by the Swiss National Bank, to 0.75 per cent.
Source: Tradingeconomics.com
A higher-than-expected interest rate could be bullish for the CHF, while a lower-than-expected rate could act bearishly on the CHF.
Impact: EUR/CHF, USD/CHF, CHF/PLN
Wednesday, 11.12, 15:45 CET, Eurozone interest rate decision
In October, the European Central Bank (ECB) cut its main interest rate by 25 bps to 3.4 per cent. The European Central Bank has signalled that it is increasingly considering interest rate cuts, according to reports from its November meeting. Inflation is expected to ease, mainly due to falling energy prices, but officials remain cautious about domestic inflationary pressures, particularly strong wage growth and sluggish labour productivity.
Analysts forecast another ECB rate cut of 25 bps, to 3.15 per cent.
Source: Tradingeconomics.com
A higher-than-expected interest rate could be bullish for the EUR, while a lower-than-expected rate could act bearishly on the EUR.
Impact: EUR/USD, EUR/PLN
Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
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