This week's important economic data

The highlight of this week's economic view will be the FOMC rate decision on Wednesday September 21st. The  FOMC meets eight times per year and one of the key tasks of the committee is to set the overnight lending rate, which is, in effect, the benchmark rate that influences banks' short-term lending rates. Many interest rates in the financial market, such as mortgage rate, bond, and consumer loans, are affected by this rate, along with the future trend of the strength of the US Dollar. An increase in rates normally signal the strengthening of the US Dollar, as investors seek higher rate of returns on their currency holdings. There seem to be consensus in the market that this upcoming FOMC meeting will not have much impact on the USD as pointed out by two analysts at Citi and BOA. They also pointed out that the market are primarily concerned with development on the Euro front which is still dealing with the looming Greek default. Investors looking for movement in the currency market should look for opportunities in Europe.

Along with the FOMC rate decision, analysts will pore over the accompanying Fed statement to find clues about the possibility of QE3. The Fed Chairman, Ben Bernake, gave a speech in Jackson Hole, basically saying that another round of monetary accommodation (QE3) would hinge on further deterioration of economic outlook and deflation. The statement will be released on Wednesday 2.15pm EDT.

On Tuesday September 20, we have housing starts data from the Census Bureau, a key rate that indicates activities in the real estate market. Housing starts indicate the number of housing units whose construction begins each month.