Forex Trading Library

Weekly Forex Wrap Up: May 18 – 22, 2015

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AUDUSD (0.7828): The Australian dollar continued its decline after posting fresh highs last week. The currency was under pressure both from domestic data as well as the US Dollar which saw a strong rebound this week. AUDUSD was trading mostly within last week’s range and on Friday, the currency broke below last week’s low at 0.78766 and looks poised for further declines in the near term. In terms of the fundamentals, there were no major events lined up this past week with the exception of the RBA meeting minutes. The Australian Central Bank was largely vague while keeping its door open for more rate cuts in the future.

  • New motor vehicle sales m/m -1.5% vs. 0.7% previously
  • CB leading index m/m -0.1% vs. 0.5%
  • RBA monetary policy minutes
  • Westpac consumer sentiment 6.4% vs. -3.2%
  • MI inflation expectations 3.6% vs. 3.4%

EURUSD (1.1035): The single currency fell prey to ECB comments early into the week as the ECB announced that it would step up its QE purchases in May/June to make up for the slower summer months in July/August. Mario Draghi in his many speeches this week reiterated the ECB’s commitment to QE and also noted that growth still needs to pick up in the Eurozone. Besides the verbal comments economic data from the Eurozone was largely mixed but remained positive. Greece was more of a sub-headline this week as there was no breakthrough on the debt negotiations. The Euro’s weakness was largely attributed to the ECB officials and also the strength of the Greenback this week.

  • German ZEW Economic sentiment 41.9 vs. 48.8
  • Eurozone Final CPI y/y 0.0% vs. 0.0%; Core CPI y/y 0.6% vs. 0.6%
  • Eurozone ZEW Economic sentiment 61.2 vs. 62.4
  • German PPI m/m 0.1% vs. 0.1%
  • Eurozone flash manufacturing PMI 52.3 vs. 51.8; services PMI 53.3 vs. 53.9
  • German final GDP q/q 0.3% vs. 0.3%
  • German Ifo business climate 108.5 vs. 108.3

NZDUSD (0.731): The Kiwi was mostly ranging this week, trading well within the highs and lows from last week while briefly spiking lower to post a fresh low at 0.72823 and saw a renewed selling pressure into Friday as the Greenback saw a strong rebound and managed to hold on to its gains. Economic data from New Zealand this week largely focused on consumer and producer inflation, both of which were weak. The GDT dairy price index continued to improve but remains negative.

  • PPI Input q/q -1.1% vs. -0.6%; PPI output q/q -0.9% vs. 0.1%
  • Inflation expectations q/q 1.9% vs. 1.8% previously
  • GDT Price Index -2.2% vs. -3.5%
  • Visitor arrivals 1.4% vs. -4%

USDJPY (121.51): USDJPY broke above last week’s high at 120.26 boosted by inaction from the BoJ in regards to monetary stimulus expansion and the larger Greenback’s strength. Japan’s quarterly GDP managed to rise 0.6% including core machinery orders. However industrial production and all industries activity were weaker. In the BoJ’s statement, Governor Kuroda remained optimistic that inflation will hit the bank’s 2% target by the fiscal year 2016..

  • Core machinery orders m/m 2.9% vs. 1.7%
  • Revised industrial production m/m -0.8% vs. -0.3%
  • Tertiary industry activity m/m -1.0% vs. -0.5%
  • Prelim GDP q/q 0.6% vs. 0.4%; GDP price index y/y 3.4% vs. 3.6%
  • Flash manufacturing PMMI 50.9 vs. 50.3
  • All industries activity m/m -1.3% vs. -0.4%
  • BoJ leaves monetary policy unchanged

USDCAD (1.2282): The Canadian Dollar failed to capitalize this week on the Oil’s rally. The Loonie was infact mostly trading sideways before weakening to the Greenback on Friday. Economic data was mostly mixed with core retail sales rising 0.5% alongside a downward revised 1.8% growth in retail sales last month. Headline inflation was also weak at -0.1%. Earlier in the week, BoC Governor, Poloz gave a speech and remained optimistic. However, most economists expect that the BoC could be heading for another rate cut later this year which has kept the Loonie largely subdued for the most part.

  • BoC Governor Poloz Speech
  • Wholesale sales m/m 0.8% vs. 0.9%
  • Core CPI m/m 0.1% vs. 0.1%
  • CPI m/m -0.1% vs. 0.1%
  • Retail sales m/m 0.7% vs. 0.5%
  • Core retail sales m/m 0.5% vs. 0.7%

GBPUSD (1.5514): GBPUSD failed to break higher and was in fact a bit volatile. The currency was however trading within last week’s range. The Cable got some boost with better than expected retail sales data this week despite a stronger Greenback. However inflation fell -0.1% on the headline. The currency further came under pressure as on Friday afternoon, BoE Governor, Mark Carney in a speech noted that the Central bank will keep an eye on the strong Pound sterling. The Cable fell on the comments alongside a better than expected US Core CPI.

  • CPI y/y -0.1% vs. 0.0%; Core CPI y/y 0.8% vs. 1.0%
  • PPI input m/m 0.4% vs. 0.8%; PPI output m/m 0.1% vs. 0.2%
  • MPC minutes released
  • Retail sales m/m 1.2% vs. 0.4%

US Dollar Index (96.08): The US Dollar Index saw a largely positive week as the Greenback managed to notch quite some gains this week. Economic data from the US was largely mixed but the buck got a boost early on with housing starts and building permits posting strong gains. The Friday trading session saw the CPI data a bit soft, but the core CPI y/y increased 1.8% from 1.7% previously which has now put the rate hike discussion back on the table. FOMC meeting minutes released earlier this week did not give out any clear clues to the markets and the Fed members were unsure about the June rate hikes but still keep their options on the table.

  • Building permits 1.14mn vs. 1.06mn
  • Housing starts 1.14mn vs. 1.02mn
  • FOMC meeting minutes released
  • Flash manufacturing PMI 53.8 vs. 54.6
  • Existing home sales 5.04mn vs. 5.23mn
  • Philly Fed manufacturing index 6.7 vs. 8.1
  • CB leading index m/m 0.7% vs. 0.3%
  • CPI m/m 0.1% vs. 0.1%; Core CPI m/m 0.3% vs. 0.2%
  • CPI y/y -0.2% vs. -0.2%; Core CPI y/y 1.8% vs. 1.7%
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