Forex market volatility this week is predicted to rise along with the many news releases from almost every region in the world. Ukraine has made its way back to headlines to end a quiet market last week. For now, the issue may get to stand in the sideline as several news releases that probably more relevant and significant for the global market is going to be published.

Forex market volatility this week is predicted to rise along with the many news releases from almost every region in the world. Ukraine has made its way back to headlines to end a quiet market last week. For now, the issue may get to stand in the sideline as several news releases that probably more relevant and significant for the global market is going to be published.
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The following are five risk centers that is predicted to influence forex market movements:

1. Pro-Russian Separatist Actions In Ukraine Crisis

Safe haven assets and currencies rose to prominent once again after high-ranking officials from the US and Europe criticized Russia in relation with armed conflict in Ukraine Crisis. Russia is thought to be violating the Geneva agreement that was just signed last week, and further sanctions is planned to be effected. A group of Europe military observer is seized by Pro-Russian armed separatist and a dozen more important offices is occupied.

The main problem in Ukraine crisis, apart from Russia's objectives, is the US and Europe reluctance to be firm with Russia. Many thinks that they are worried about possible side effect of a stricter sanction, but the circumstances have come to the point where real act is needed. It is hoped that they won't stay quiet on Pro-Russian separatist actions. That is ultimately why the market concerned; it seems that stricter sanction is needed and the impact on international market is still considered.

 

2. UK Economy Target Attainment

Three high-impact news release will be published this week from UK are GDP preliminary, Manufacture PMI Index, and Construction PMI Index. The threee will give hints to the probability of UK economy to attain the targets put on forward guidance by Bank of England, as well as measure UK business climate temperatures.

For the time being, GBPUSD is in the highest level since the start of the year. However, we have described before that there are some weakness in the UK's economy that might topple GBP reign. In this context, GDP and PMI dataset are important to confirm what steps the central bank might take. Considerable strength on those numbers surely will raise market expectations that interest rates will soon be hiked.

 

3. The Pressure of Decreasing Inflation In Eurozone

Eurozone inflation rate slumps is already an old news. At the beginning of the month, Europe Central Bank (ECB) said that growth is still go on moderately and inflation post-Easter will pick up. This week we will see whether statistic will give credence to that optimism.  

Consensus estimated slight increases on German Inflation Rate from 15 to 1.3% and Eurozone inflation from 0.5% to 0.7%. Because the market is waiting for ECB to seriously deal with inflation, then it will remain uncertain about Euro and fluctuative chart could go on all week.

 

4. The Fed Rate Hike Speculation

As usual, event that attract the most attention is The Fed activities. This week will see a row of high impact releases from the US, including The Fed interest rate announcement and The Fed governor Janet Yellen's speak.

There are not many things haven't said about Fed rate hike. What needs to be noted is if Yellen once again undermine or strengthen the prospect of 2015 rate hike, then reversals might happen in some major pairs.


5. China Economy Depression

The last critical news on the list is Chinese PMI Manufacture that will be released a few hours before Yellen speaks in the US. Since 2013, Chinese Manufacture PMI have been on the verge of contraction in a few points above 50. Significantly weak PMI could negatively affect AUD and NZD movements, because Australia and New Zealand exports are absorbed by China.

Last week, Chinese government have promised to stimulate the economy by releasing bonds to finance new projects. China Daily claimed that 80 new projects will be launched, including construction of transportation infrastructure, solar energy, and oil and gas and chemical industry modernization. The chance to take part on the projects will be opened for domestic and foreign companies in several sectors that previously controlled by government-related companies. The prospect of new investment is hoped to entice business owners and lift the pressures on Chinese economy. If that is true, then it surely will have positive influence for its trade partners, including Australia and New Zealand.