Important Events This Week Mar 18-22

Anyone serious about investing in fx needs to be constantly updated not only on movements in the market, but also what causes these movements. Causes could be announcements by central banks of changes in interest rates, releases of consumer and producer price indices, minutes of meetings, and the likes. All these could affect the mood of the market, which would then create a ripple effect in the value of currencies.

Here are some major events that you need to look out for this week, 18-22 March:

Event: Consumer Price Index – United Kingdom

Date: March 19, 2013

Time: 9:30am (GMT)

What It Is About and Why It’s Important

The United Kingdom’s National Statistics office will announce the country’s consumer price index (CPI) on this day, along with the core CPI. Both offer an insight on average movements in the prices of a representative basket of goods and services. The only difference in the core CPI is that seasonally volatile products are excluded, such as energy and food. CPI has remained flat at 2.7 per cent from November 2012 to February 2013, while the core CPI has seen a decline from December 2012’s 2.6 per cent to 2.4 in January and then 2.3 in February.

When the National Statistics office declares an increase in the CPI, it could indicate a positive development for the GBP. Thus, this announcement is a must-watch for GBP investors.

Event: Producer Price Index – Germany

Date: March 20, 2013

Time: 7:00am (GMT)

What It Is About and Why It’s Important

Formerly known as wholesale price index, the PPI shows changes in the prices in the basket of goods as seen from a producer’s perspective. These include finished goods and raw materials. As with the changes in the CPI, a higher figure in the PPI has a positive effect on the currency (EUR), while a low reading results to a negative perception of the currency.

Germany’s PPI has increased in very small increments since December 2012’s 1.4 per cent, to 1.5 and then 1.7 in January and February, respectively. Numbers are still well below highs seen in 2007-2008, peaking at 8.9 per cent in August 2008, prior to crashing a few months later.

Event: Interest Rate Decision – United States

Date: March 20, 2013

Time: 6:00pm (GMT)

What It Is About and Why It’s Important

When the United States central bank, called the Federal Reserve announces changes in the interest rates, it affects rates set by a number of institutions, including commercial banks. These rates also have the tendency to affect forex rates, thus the importance of this announcement.

Interest rates are currently at 0.25 per cent, a figure that has not changed since late 2008. There are no indicators that this may change this week or in the coming months.