Let's find out what Matt Weller (FOREX.com, City Index) told FXMAG.COM team about Australian inflation and RBA decision, British pound and the US GDP.
The market is currently split between expecting the RBA to stand pat or raise interest rates 25bps when it meets in early February, so every economic report that hits the wires over the next couple of weeks will take on additional significance. The monthly AU CPI report showed headline price pressures remained sticky at 7.3% in November, the same as in Q3, and if inflation doesn't show signs of abating, it may tip the RBA in favor of a rate hike at its February meeting.
After last week's disappointing December UK sales report, traders are keen for an update on how the UK economy has been performing in the new year, so the PMI release could absolutely have a big impact on the pound. With GBP/USD testing key longer-term resistance around 1.2450 as of writing, the odds may favor a pullback in sterling unless the PMI report shows unexpected strength.
GDP is, by definition, a lagging indicator of the performance of the underlying economy, so I wouldn't expect it to have a particularly big impact on many markets. For its part, the Fed is focused on more timely data, including the monthly jobs and inflation reports, and in any event, Jerome Powell and Company appear to have already settled on a 25bps hike for next week's meeting, so any impact on monetary policy is likely to be minimal.
