Weekly Forex Forecast: August 24 – 28

Aug 24 2015, 4:59 am
19th August

The Swiss Franc was the strongest currency last week gaining 3.19% as the general market sentiment saw investors seek safe haven assets including the Yen. The Euro was the second most top performing currency gaining 2.46% in a week that saw Greece receive its third bailout as well as the ruling SYRIZA calling for snap elections on 20th of September. The Greenback was mostly subdued last week with the currency taking a back seat as investors sold off the US Dollar after a dovish FOMC meeting minutes which brings to question whether the Fed will hike rates in September.

Weekly Spot FX Performance – 21/08/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 21/08/2015 (Source: Finviz.com)

The Canadian dollar and the Aussie dollar made up the tail end of the currency list last week losing -0.64% and -0.87% respectively. Despite the risk off sentiment, both these currencies failed to capitalize. The Canadian dollar was tracking the losses in Crude Oil which fell to 2009 lows amidst a rise in US stockpiles and a continued production levels which outweigh demand.

Fundamentals for the Week August 24 – 28

Date Time Currency Detail Forecast Previous
24-Aug 22:55 USD FOMC Member Lockhart Speaks
25-Aug Tentative AUD CB Leading Index m/m 0.20%
Tentative CNY CB Leading Index m/m 1.00%
06:00 NZD Inflation Expectations q/q 1.90%
09:00 EUR German Final GDP q/q 0.40% 0.40%
10:15 CHF Employment Level 4.24M 4.23M
11:00 EUR German Ifo Business Climate 107.6 108
Tentative GBP Index of Services 3m/3m 0.40%
16:00 EUR Belgian NBB Business Climate -3.2 -4.1
USD HPI m/m 0.40% 0.40%
USD S&P/CS Composite-20 HPI y/y 5.10% 4.90%
16:45 USD Flash Services PMI 54.1 55.7
17:00 USD CB Consumer Confidence 92.8 90.9
USD New Home Sales 512K 482K
USD Richmond Manufacturing Index 9 13
19:25 CAD Gov Council Member Schembri Speaks
26-Aug 01:45 NZD Trade Balance -600M -60M
02:50 JPY SPPI y/y 0.40% 0.40%
04:30 AUD Construction Work Done q/q -1.50% -2.40%
Tentative AUD RBA Gov Stevens Speaks
09:00 CHF UBS Consumption Indicator 1.68
11:30 GBP BBA Mortgage Approvals 46.0K 44.5K
13:00 GBP CBI Realized Sales 19 21
15:30 USD Core Durable Goods Orders m/m 0.30% 0.60%
USD Durable Goods Orders m/m -0.50% 3.40%
17:00 USD FOMC Member Dudley Speaks
17:30 USD Crude Oil Inventories 2.6M
27-Aug 04:30 AUD Private Capital Expenditure q/q -2.50% -4.40%
09:00 EUR German Import Prices m/m -0.30% -0.50%
GBP Nationwide HPI m/m 0.40% 0.40%
11:00 EUR M3 Money Supply y/y 4.90% 5.00%
EUR Private Loans y/y 0.70% 0.60%
15:30 CAD Corporate Profits q/q -6.00%
USD Prelim GDP q/q 3.20% 2.30%
USD Unemployment Claims 275K 277K
USD Prelim GDP Price Index q/q 2.00% 2.00%
17:00 USD Pending Home Sales m/m 1.30% -1.80%
17:30 USD Natural Gas Storage 53B
Day 1 ALL Jackson Hole Symposium
28-Aug 02:05 GBP GfK Consumer Confidence 4 4
02:30 JPY Household Spending y/y 0.90% -2.00%
JPY Tokyo Core CPI y/y -0.10% -0.10%
JPY National Core CPI y/y -0.20% 0.10%
JPY Unemployment Rate 3.40% 3.40%
02:50 JPY Retail Sales y/y 1.10% 1.00%
08:45 CHF GDP q/q -0.10% -0.20%
All Day EUR German Prelim CPI m/m -0.10% 0.20%
10:00 EUR Spanish Flash CPI y/y -0.10% 0.10%
11:30 GBP Second Estimate GDP q/q 0.70% 0.70%
GBP Prelim Business Investment q/q 1.60% 2.00%
15:30 CAD RMPI m/m 0.00%
CAD IPPI m/m 0.50%
USD Goods Trade Balance -62.3B
USD Core PCE Price Index m/m 0.10% 0.10%
USD Personal Spending m/m 0.40% 0.20%
USD Personal Income m/m 0.40% 0.40%
17:00 USD Revised UoM Consumer Sentiment 93.2 92.9
USD Revised UoM Inflation Expectations 2.80%
Day 2 ALL Jackson Hole Symposium


Currencies/Events to Watch this Week

German GDP: The week ahead is relatively quiet for the Euro with only a few important releases. On 25th August, German final GDP numbers are due with the median forecasts pointing to a steady 0.4% growth in the Eurozone’s largest and most important economy. Also during the week, the inflation numbers are due from Germany and Spain, both of which are expected to post a -0.1% print.

UK Second Estimate GDP: The second estimates for the second quarter GDP numbers are due from the UK on the 28th of August. Expectations are for the UK’s GDP to have been steady at 0.7%, unchanged from the first estimates. Besides the GDP print, the economic calendar from the UK is very quiet.

Japan CPI & Retail sales: Economic data from Japan this week will see the Tokyo and Core CPI numbers, both of which are expected to print -0.1% and -0.2% respectively. Retail sales numbers are also due on 28th of August with slightly hawkish expectations of 1.1%, up from 1.0% a month ago.

Kiwi inflation expectations: New Zealand inflation expectation is the only major news release this week. With the most recent quarterly PPI numbers managing to stabilize, inflation expectations could see a pick up after posting 1.9% print for the previous quarter. The Kiwi has been in a prolonged downtrend has managed to rebound for the last two weeks with further upside in store.

US GDP Second Estimates: The second estimate for the US GDP numbers are due this week and the consensus is bullish expecting to see a 3.2% rebound, up from 2.3% as posted previously. A beat on the GDP estimates will no doubt see the Greenback get a boost after weakening considerably last week. A lot of FOMC speeches are due over the week and markets will be keen to hear the views from the various members who will be speaking.

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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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