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

DateTimeCurrencyDetailForecastPrevious
31-Aug01:45NZDBuilding Consents m/m-4.10%
02:50JPYPrelim Industrial Production m/m0.10%1.10%
03:30AUDMI Inflation Gauge m/m0.20%
04:00AUDHIA New Home Sales m/m0.50%
NZDANZ Business Confidence-15.3
04:30AUDCompany Operating Profits q/q-1.90%0.20%
AUDPrivate Sector Credit m/m0.40%0.40%
08:00JPYHousing Starts y/y11.20%16.30%
09:00EURGerman Retail Sales m/m-2.30%
10:00CHFKOF Economic Barometer99.999.8
11:00EURItalian Retail Sales m/m0.10%-0.10%
12:00EURCPI Flash Estimate y/y0.20%0.20%
EURCore CPI Flash Estimate y/y1.00%1.00%
EURItalian Prelim CPI m/m0.20%-0.10%
15:30CADCurrent Account-17.2B-17.5B
16:45USDChicago PMI54.754.7
01-Sep01:45NZDOverseas Trade Index q/q-1.90%1.50%
02:30AUDAIG Manufacturing Index50.4
02:50JPYCapital Spending q/y9.00%7.30%
04:00CNYManufacturing PMI49.850
CNYNon-Manufacturing PMI53.9
04:30AUDBuilding Approvals m/m3.00%-8.20%
AUDCurrent Account-15.9B-10.7B
04:35JPYFinal Manufacturing PMI51.951.9
04:45CNYCaixin Final Manufacturing PMI47.247.1
CNYCaixin Services PMI53.953.8
06:45JPY10-y Bond Auction0.40|2.8
07:30AUDCash Rate2.00%2.00%
AUDRBA Rate Statement
09:30AUDCommodity Prices y/y-20.20%
10:15EURSpanish Manufacturing PMI53.953.6
10:30CHFManufacturing PMI49.948.7
10:45EURItalian Manufacturing PMI56.255.3
10:50EURFrench Final Manufacturing PMI48.648.6
10:55EURGerman Unemployment Change-5K9K
EURGerman Final Manufacturing PMI53.253.2
11:00EURFinal Manufacturing PMI52.452.4
EURItalian Monthly Unemployment Rate12.70%12.70%
EURItalian Quarterly Unemployment Rate12.50%12.40%
11:30GBPManufacturing PMI51.951.9
GBPNet Lending to Individuals m/m3.9B3.8B
GBPM4 Money Supply m/m0.20%-0.50%
GBPMortgage Approvals68K67K
12:00EURUnemployment Rate11.10%11.10%
15:30CADGDP m/m0.20%-0.20%
16:45USDFinal Manufacturing PMI52.952.9
17:00USDISM Manufacturing PMI52.652.7
USDConstruction Spending m/m0.80%0.10%
USDIBD/TIPP Economic Optimism47.346.9
USDISM Manufacturing Prices39.744
TentativeNZDGDT Price Index14.80%
All DayUSDTotal Vehicle Sales17.3M17.6M
02-Sep02:50JPYMonetary Base y/y33.20%32.80%
04:00NZDANZ Commodity Prices m/m-11.20%
04:30AUDGDP q/q0.40%0.90%
10:00EURSpanish Unemployment Change-74.0K
11:30GBPConstruction PMI57.657.1
12:00EURPPI m/m-0.10%-0.10%
15:15USDADP Non-Farm Employment Change204K185K
15:30USDRevised Nonfarm Productivity q/q2.90%1.30%
USDRevised Unit Labor Costs q/q-0.50%0.50%
17:00USDFactory Orders m/m0.80%1.80%
17:30USDCrude Oil Inventories-5.5M
03-Sep02:30AUDAIG Services Index54.1
04:30AUDRetail Sales m/m0.40%0.70%
AUDTrade Balance-3.10B-2.93B
10:15EURSpanish Services PMI59.359.7
10:45EURItalian Services PMI53.152
10:50EURFrench Final Services PMI51.851.8
10:55EURGerman Final Services PMI53.653.6
11:00EURFinal Services PMI54.354.3
11:30GBPServices PMI57.657.4
12:00EURRetail Sales m/m0.60%-0.60%
14:30USDChallenger Job Cuts y/y125.40%
14:45EURMinimum Bid Rate0.05%0.05%
15:30CADTrade Balance-1.4B-0.5B
EURECB Press Conference
USDTrade Balance-43.2B-43.8B
USDUnemployment Claims273K271K
16:45USDFinal Services PMI55.255.2
17:00USDISM Non-Manufacturing PMI58.360.3
17:30USDNatural Gas Storage69B
04-Sep04:30JPYAverage Cash Earnings y/y2.30%-2.50%
09:00EURGerman Factory Orders m/m-0.50%2.00%
10:15CHFCPI m/m-0.20%-0.60%
11:10EURRetail PMI54.2
12:00EURRevised GDP q/q0.30%0.30%
15:10USDFOMC Member Lacker Speaks
15:30CADEmployment Change2.0K6.6K
CADUnemployment Rate6.80%6.80%
CADLabor Productivity q/q0.10%-0.10%
USDAverage Hourly Earnings m/m0.20%0.20%
USDNon-Farm Employment Change220K215K
USDUnemployment Rate5.20%5.30%
17:00CADIvey PMI53.552.9

 

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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