It’s not common for any releases from Turkey to be on top of the traders list for a week but that’s exactly the case this time as the CBRT is under massive two-way pressure and the lira has been arguably the most volatile currency this year. Elsewhere the focus will be on commodity currencies with important events for AUD and CAD.
The CBRT decision (Thursday, 12:00pm GMT)
The Turkish lira has been under a huge pressure this year and Turkey looked to be at the edge of the currency crisis which has been - so far - averted by the 300 bps emergency interest rate hike. The lira recovered some of the losses but it remains volatile as traders are concerned that this hawkish turn is just temporary and that president Erdogan will pursue a policy of low interest rates after he wins elections in June. For now the central bank needs to stay determined and ready to act. Affected markets: EURTRY, USDTRY.
There’s been a lot of volatility on the EURTRY. 5.20 seems to be a solid support for now. Source: xStation5
Australia: RBA decision (Tuesday, 5:30am GMT), Q1 GDP (Wednesday, 2:30am GMT)
This is going to be an important week for the Aussie traders as well with the two major events in the calendar. The RBA is not expected to move rates any time soon but the language can play a role especially when we look at the AUDNZD and consider a recent dovish turn from the RBNZ. The GDP will be an important message as well as the Australian economy has been unable to gather momentum despite favourable conditions in China and relatively high commodity prices. Affected markets: AUDUSD, AUDNZD.
The NFP report from Canada (Friday, 1:30pm GMT)
The Canadian dollar is currently influenced mostly by politics and things like tariffs and NAFTA negotiations will continue weigh heavily on it. But after the Bank of Canada removed a sentence that it must be cautious on (raising) interest rates traders will look at the data as well. The NFP for April was a bit weak so traders will be looking for a better number this time around. Affected markets: USDCAD, EURCAD.
G7 meeting (starting on Friday)
On top of the data traders will pay a lot of attention to the incoming G7 meeting where Trump is set to be under fire from other countries infuriated by the tariffs. We will see if the meeting leads to a more conciliatory tone or the opposite - if it scares the markets once again. Affected markets: US500, DE30.
Speaking of Monday itself there’s a limited amount of the data after the inflation release in Turkey (8am GMT). The US durable goods report (3pm) is a final release, so it will have a limited impact on the market.
However, traders should remember about the RBA decision that will be released ahead of tomorrow’s opening in Europe.
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