Tomorrow is the last trading day of the month, which is important for FX traders. First, the end of the month is on a Friday, which means volatility will pick up sharply.

Second, the end of June officially marks the end of the first half of the trading year. Traders usually re-evaluate portfolios and strategies and plan for the year’s second half.

As we come closer to the end of the month, here are four things FX traders should consider:

• The end-of-the-month flows
• The Core PCE Price Index data
• Independence Day
• Next week’s economic events

Every month’s end is special, as volatility picks up surrounding the main fixing times. But tomorrow should bring even higher volatility because the last trading day of the month also marks the end of the trading week.

FX traders should also have an eye on the Core PCE data due tomorrow. This is the Fed’s favorite inflation measure, and any deviation from the forecast should move the US dollar pairs.

Those willing to look beyond the end of June should be aware that next week the US celebrates Independence Day. On Tuesday, the US banks are closed, so the price action should be slow during the North American trading session.

Finally, next week is packed with important economic data. For example, the Reserve Bank of Australia announces its interest rate decision.

Also, the Fed minutes are due on Wednesday, and the NFP on Friday.

The point here is that while tomorrow’s volatility will pick up significantly, FX traders should look at what next week brings and position accordingly.

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