During the past week the Forex market had been dominated by the impact of economic data releases from major economies. The US and European Central Bank both released their latest monetary policy decisions, which had a significant impact on the currency markets.
Federal Reserve Chairman Jerome Powell emphasized that the Fed still has more work to do and added that the disinflationary process has begun. The recent data from the U.S. Bureau of Labor Statistics showed that the economy added an impressive 517,000 jobs and the unemployment rate decreased to a low of 3.4%, which hasn’t been seen since May 1969.
The UK economy managed to avoid a recession and remained stagnant in the last quarter of 22’. The numbers released on Friday showed how the G7 economy avoided a technical recession which is usually defined by two consecutive quarters of shrinking output. While some might be led to believe in a stronger than expected economy after all, others fear that the recession is only delayed rather than completely avoided.
The week ahead the focus will be on economic data releases from both the United States and Europe. The US Consumer Price Index will confirm the next steps outlined by the FOMC previously. Eurozone GDP and CPI levels for the UK are expected to have a significant impact on the currency markets.