After the US Federal Reserve’s decision last week, more central banks ’decisions are following this week, and the beginning will be with the RBA’s decision, followed by the Bank of England’s decision. Also, there will be many important economic data that will be released during the week that will have a noticeable impact on the movements of major currencies, especially the US dollar, Canadian dollar and New Zealand dollar.
Australian Reserve’s decision
During the early hours of next Tuesday, the Reserve Bank of Australia will issue its interest rate decision at its first meeting in 2021, and market expectations indicate that the bank will keep interest unchanged at 0.10% levels, and markets will focus more on monetary policy data issued by The bank and Governor Philip Lowe’s comments throughout the week.
The Bank of England decision
The Australian Reserve’s decision will be followed by the Bank of England’s decision on Thursday at 12:00 GMT, and as is the expectations regarding the Australian Reserve’s decision, expectations indicate that the Fed could keep the interest rate unchanged and the size of the asset purchases program. However, Corona developments in the country and the emergence of a new strain of the virus, along with the impact of Britain’s exit from the European Union, may prompt the Bank of England to take sudden measures that would strongly affect the movements of the pound sterling.
Labor market data
The economic calendar shows that the most prominent economic data controlling the movements of most major currencies are labor market data, specifically New Zealand, the United States and Canada.
On Tuesday evening, the New Zealand Bureau of Statistics will release labor market data on a quarterly basis during the last quarter of 2020. The change in employment is expected to rise by 0.1% after it declined in the third quarter by 0.8%. On the other hand, the unemployment rate is likely to increase by 5.6% compared to the 5.3% recorded in the previous reading.
As usual, by the end of next week, labor market data in the United States will be released monthly on the first Friday of every month. This data is considered very important because it comes after a month of data that reflected the decline in employment significantly exceeded expectations. The non-agricultural employment change index is likely to rise by about 55,000 jobs, while expectations show that the unemployment rate will stabilize at 6.7%.
Meanwhile, labor market data in Canada will be released during January, after the employment change index recorded a decline of 62.6 thousand jobs during last December, and the unemployment rate was about 8.6%.