Friday's PCE index headlines global inflation data

Economic calendar summary

The final week of major economic news this year brings global inflation data from four countries to serve as a final pulse check heading into 2024. The final readings should show it's been a successful year for central banks lowering inflation with inflation rates in Canada, UK and US all down from the start of the year. This month's reading will be especially important for the US and UK as their central banks shift focus to rate cuts in 2024.

For the Bank of Japan, however, lowering inflation was not the focal point of Monday night's meeting. Japan has not seen inflation over 3.5% since February, despite negative interest rates. No change in rates from the BoJ last night was accompanied by little indication of future rate hikes - Thursday's inflation data could provide evidence for a deviation from this stance.

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Interest Rate Decision - Japan

Time: 10:00pm ET Monday, December 18th

Previous: -0.1%

Actual: -0.1%

Governor Ueda held rates unchanged at Monday night's meeting which caused a fall in yen. USD/JPY rose over 100 pips following the news.

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Inflation Rate - Canada

Time: 8:30am ET Tuesday, December 19th

Previous: 3.1%

Expected: 2.9%

Headline inflation in Canada is expected to dip below 3% for the first time since June. USD/CAD opened the week at a 4-month low under 1.3375 - a strong inflation reading could send the pair even lower, while a soft reading could help US dollar recoup its recent losses against CAD.

Inflation Rate - UK

Time: 2:00am ET Wednesday, December 20th

Previous: 4.6%

Expected: 4.4%

Last month, UK inflation saw its largest drop this year to 4.6%. The trend is expected to continue this month, nearing 4% for the first time since 2021.

Inflation Rate - Japan

Time: 6:30pm ET Thursday, December 21st

Previous: 3.3%

Expected: 2.6%

Unlike many other central banks, lowering inflation may not be as welcomed for the Bank of Japan. While 2.6% may be perceived as a sustainable growth in inflation, the BoJ believes wage growth to still be lagging too much to be deemed sustainable. Japan's central bank is expected to comment further on their expectation for this week's reading at Monday night's meeting.

Core PCE Index - US

Time: 8:30am ET Friday, December 22nd

Previous: 3.5%

Expected: 3.3%

After last week's dovish sentiment from the Fed, traders will expect this inflationary measure from the US to be in line with expectations. A stronger-than-expected reading may signal rate cuts will have to hold off, while a softer number could mean a decrease in interest rates as soon as March.

How to trade economic events

1. Open an account to get started, or practice on a demo account
2. Choose your forex trading platform
3. Open, monitor, and close positions on forex pairs

Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.

You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.

Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.