FX Week Ahead Overview:
- While a notable deceleration is anticipated, the Reserve Bank of Australia’s target range is +1-3%, suggesting that price pressures will be above the upper band, which could help the Australian Dollar[1].
- It seems likely that the Bank of Canada will soon restart its stimulus withdrawal efforts when it meets later this week
- It's a near-guarantee that the Federal Reserve will announce a taper to its asset purchases when it meets in November. However, with growth slowing, the market may be too aggressive in rate hike timing and pricing, which suggests five hikes through the end of 2023.
For the full week ahead, please visit the DailyFX Economic Calendar[2].
10/27 WEDNESDAY | 00:30 GMT | AUD INFLATION RATE (3Q)
According to a Bloomberg News survey, 3Q’21 Australia inflation rates (CPI) increased by +0.8% after gaining +0.8% (q/q) last quarter, and by +3.1% from +3.8% (y/y). While a notable deceleration is anticipated, the Reserve Bank of Australia’s target range is +1-3%, suggesting that price pressures will be above the upper band. Although the RBA has embraced a ‘lower for longer’ policy – reducing QE but keeping QE going until February 2022 – pressure may build for a reduction in stimulus if headline Australia inflation stays above the upper band of the RBA’s target range.
10/27 WEDNESDAY | 14:00 GMT | CAD Bank of Canada Rate Decision
Nearly a month removed from the Canadian federal election has passed, and with inflation continuing to run above expectations, it seems likely that the Bank of Canada will soon restart its stimulus withdrawal efforts when it meets later this week. Currently, asset purchases are running at a rate of C$2 billion per week. Following the superb September Canadian jobs data and surging energy
