Weekly Forex Forecast: 31/08 – 4/09

Aug 31, 4:54 am
August 18th

The currency markets managed to settle back after a tumultuous start to the week with the risk aversion being the major theme. However the Yen emerged on tops with gains of 0.72% over the US Dollar. The Canadian dollar also surprisingly posted gains this week led by a sharp rally in Crude oil prices as the weekly crude oil inventories showed a drop in the stockpiles.

Weekly Spot FX Performance – 28/08/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 28/08/2015 (Source: Finviz.com)

The Swiss Franc retreated off the highs this week and ended up losing -1.69% for the week. The Euro also managed to ease back from the highs seen earlier this week and ended up closing the week with -1.77% declines to the Greenback. The Kiwi and the Aussie made up the tail end of the currency markets this week losing -3.39% and -1.98% respectively as a result of concerns about the slowdown from China which could hit the Aussie and the Kiwi markets.

Fundamentals for the Week 31/08 – 04/09

Date Time Currency Detail Forecast Previous
31-Aug 01:45 NZD Building Consents m/m -4.10%
02:50 JPY Prelim Industrial Production m/m 0.10% 1.10%
03:30 AUD MI Inflation Gauge m/m 0.20%
04:00 AUD HIA New Home Sales m/m 0.50%
NZD ANZ Business Confidence -15.3
04:30 AUD Company Operating Profits q/q -1.90% 0.20%
AUD Private Sector Credit m/m 0.40% 0.40%
08:00 JPY Housing Starts y/y 11.20% 16.30%
09:00 EUR German Retail Sales m/m -2.30%
10:00 CHF KOF Economic Barometer 99.9 99.8
11:00 EUR Italian Retail Sales m/m 0.10% -0.10%
12:00 EUR CPI Flash Estimate y/y 0.20% 0.20%
EUR Core CPI Flash Estimate y/y 1.00% 1.00%
EUR Italian Prelim CPI m/m 0.20% -0.10%
15:30 CAD Current Account -17.2B -17.5B
16:45 USD Chicago PMI 54.7 54.7
01-Sep 01:45 NZD Overseas Trade Index q/q -1.90% 1.50%
02:30 AUD AIG Manufacturing Index 50.4
02:50 JPY Capital Spending q/y 9.00% 7.30%
04:00 CNY Manufacturing PMI 49.8 50
CNY Non-Manufacturing PMI 53.9
04:30 AUD Building Approvals m/m 3.00% -8.20%
AUD Current Account -15.9B -10.7B
04:35 JPY Final Manufacturing PMI 51.9 51.9
04:45 CNY Caixin Final Manufacturing PMI 47.2 47.1
CNY Caixin Services PMI 53.9 53.8
06:45 JPY 10-y Bond Auction 0.40|2.8
07:30 AUD Cash Rate 2.00% 2.00%
AUD RBA Rate Statement
09:30 AUD Commodity Prices y/y -20.20%
10:15 EUR Spanish Manufacturing PMI 53.9 53.6
10:30 CHF Manufacturing PMI 49.9 48.7
10:45 EUR Italian Manufacturing PMI 56.2 55.3
10:50 EUR French Final Manufacturing PMI 48.6 48.6
10:55 EUR German Unemployment Change -5K 9K
EUR German Final Manufacturing PMI 53.2 53.2
11:00 EUR Final Manufacturing PMI 52.4 52.4
EUR Italian Monthly Unemployment Rate 12.70% 12.70%
EUR Italian Quarterly Unemployment Rate 12.50% 12.40%
11:30 GBP Manufacturing PMI 51.9 51.9
GBP Net Lending to Individuals m/m 3.9B 3.8B
GBP M4 Money Supply m/m 0.20% -0.50%
GBP Mortgage Approvals 68K 67K
12:00 EUR Unemployment Rate 11.10% 11.10%
15:30 CAD GDP m/m 0.20% -0.20%
16:45 USD Final Manufacturing PMI 52.9 52.9
17:00 USD ISM Manufacturing PMI 52.6 52.7
USD Construction Spending m/m 0.80% 0.10%
USD IBD/TIPP Economic Optimism 47.3 46.9
USD ISM Manufacturing Prices 39.7 44
Tentative NZD GDT Price Index 14.80%
All Day USD Total Vehicle Sales 17.3M 17.6M
02-Sep 02:50 JPY Monetary Base y/y 33.20% 32.80%
04:00 NZD ANZ Commodity Prices m/m -11.20%
04:30 AUD GDP q/q 0.40% 0.90%
10:00 EUR Spanish Unemployment Change -74.0K
11:30 GBP Construction PMI 57.6 57.1
12:00 EUR PPI m/m -0.10% -0.10%
15:15 USD ADP Non-Farm Employment Change 204K 185K
15:30 USD Revised Nonfarm Productivity q/q 2.90% 1.30%
USD Revised Unit Labor Costs q/q -0.50% 0.50%
17:00 USD Factory Orders m/m 0.80% 1.80%
17:30 USD Crude Oil Inventories -5.5M
03-Sep 02:30 AUD AIG Services Index 54.1
04:30 AUD Retail Sales m/m 0.40% 0.70%
AUD Trade Balance -3.10B -2.93B
10:15 EUR Spanish Services PMI 59.3 59.7
10:45 EUR Italian Services PMI 53.1 52
10:50 EUR French Final Services PMI 51.8 51.8
10:55 EUR German Final Services PMI 53.6 53.6
11:00 EUR Final Services PMI 54.3 54.3
11:30 GBP Services PMI 57.6 57.4
12:00 EUR Retail Sales m/m 0.60% -0.60%
14:30 USD Challenger Job Cuts y/y 125.40%
14:45 EUR Minimum Bid Rate 0.05% 0.05%
15:30 CAD Trade Balance -1.4B -0.5B
EUR ECB Press Conference
USD Trade Balance -43.2B -43.8B
USD Unemployment Claims 273K 271K
16:45 USD Final Services PMI 55.2 55.2
17:00 USD ISM Non-Manufacturing PMI 58.3 60.3
17:30 USD Natural Gas Storage 69B
04-Sep 04:30 JPY Average Cash Earnings y/y 2.30% -2.50%
09:00 EUR German Factory Orders m/m -0.50% 2.00%
10:15 CHF CPI m/m -0.20% -0.60%
11:10 EUR Retail PMI 54.2
12:00 EUR Revised GDP q/q 0.30% 0.30%
15:10 USD FOMC Member Lacker Speaks
15:30 CAD Employment Change 2.0K 6.6K
CAD Unemployment Rate 6.80% 6.80%
CAD Labor Productivity q/q 0.10% -0.10%
USD Average Hourly Earnings m/m 0.20% 0.20%
USD Non-Farm Employment Change 220K 215K
USD Unemployment Rate 5.20% 5.30%
17:00 CAD Ivey PMI 53.5 52.9

 

Currencies/Events to Watch this Week

RBA Monetary Policy, GDP and Retail sales: The Australian dollar will see a busy calendar with the monthly RBA monetary policy on the agenda. Although the RBA is expected to keep monetary policy unchanged, the tone of the statement could be one to watch for. The quarterly GDP data is also due this week with the median forecasts estimating a slowdown to 0.4% from 0.9% previously and finally the monthly retail sales data is due on Thursday with dovish consensus calling for a 0.4% increase in retail sales for the month.

ECB Press conference & GDP: The ECB meets this week on Thursday and although no major policy decisions are expected, the markets will be watching Mario Draghi to talk about the bank’s QE purchases. Eurozone’s quarterly GDP data is also due this week and is widely expected to remain unchanged at 0.3%. Other data includes CPI flash estimates and PMI releases.

UK PMI’s: It is a short week for the British Pound as the markets are closed on Monday due to a Bank holiday. In terms of economic data, the PMI’s are due this week with no other major releases scheduled.

Canada GDP and Jobs: The Canadian economic calendar is busy starting with the monthly GDP print due on Tuesday. Expectations call for the monthly GDP to have bounced back 0.2%, after falling -0.2% previously. Also on the wire will be the monthly jobs report with the median forecasts calling for the Canadian unemployment rate to stay put at 6.8%.

August NFP: The most important data for the US will be this Friday’s nonfarm payrolls which will be the final unemployment data heading into the FOMC September meeting. Expectations call for the US unemployment rate to decline to 5.2% from 5.3% while the average number of jobs is expected to be around 220k. Besides the NFP, Wednesday will see the ADP non farm payrolls and the ISM manufacturing and non-manufacturing PMI releases during the week.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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