Weekly Forex Wrap Up: 23/10, 2015

Oct 23, 12:56 pm

AUDUSD (0.72): The Australian Dollar has remained subdued this week trading most flat. The RBA’s meeting minutes released earlier in the week showed that the Australian Central Bank remained comfortably with current interest rates and the pace of growth in the Australian economy. The minutes signaled that the RBA was in no hurry to cut rates any time soon. While the Aussie managed to gain on the news, the currency gave up its gains after posting a weekly high to .7306.

  • RBA releases monetary policy meeting minutes
  • CB leading index m/m -0.4% vs. 0.3% previously
  • MI leading index m/m 0.1% vs. -0.3% previously
  • NAB Quarterly business confidence 0 vs. 4 previously

EURUSD (1.1): The single currency fell this week mostly due to the ECB’s meeting and Draghi’s press conference. While the key lending rates were left unchanged, Draghi signaled the ECB’s willingness to expanding its QE program, a decision that would be taken in the December meeting. EURUSD is trading at 1.104 at the time of writing after the currency declined off the weekly highs near 1.1368. Economic data from Eurozone this week saw the Euro muted in light of the ECB’s monetary policy meeting.

  • German PPI m/m -0.4% vs. -0.1%
  • Eurozone current account 17.7bn vs. 20.1bn
  • Spain unemployment rate 21.2% vs. 21.9%
  • ECB leaves minimum bid rate unchanged at 0.05%
  • Eurozone consumer confidence -8 vs. -7
  • France flash manufacturing PMI 50.7 vs. 50.2
  • France flash services PMI 52.3 vs. 51.9
  • German flash manufacturing PMI 51.6 vs. 51.8
  • German flash services PMI 55.2 vs. 54.0
  • Eurozone flash manufacturing PMI 52 vs. 51.8
  • Eurozone flash services PMI 54.2 vs. 53.6
  • Italy retail sales m/m 0.3% vs. 0.3%

NZDUSD (0.67): The New Zealand Dollar was looking week towards Friday’s session as the currency is expected to exhaust its previous three weekly consecutive rallies. NZDUSD hit a high of 0.6865 before trading lower at 0.678 at the time of writing. The declines in NZDUSD came as the Global Dairy trade index declined -3.1%. The Kiwi will now head into an important week where the RBNZ is due to meet next week.

  • GDT price index -3.1% vs. 9.9% previously
  • Visitor arrivals m/m 4.2% vs. 0.5% previously
  • Credit card spending y/y 7.3% vs. 10.4%

USDJPY (120.8): The USDJPY saw a strong week with prices currently trading at 120.85. There were no major economic releases from Japan this week and the Yen was trading relatively weaker across the board. USDJPY touched a weekly low to 119.129 before trending higher. Prices however still remain range bound with 121 coming in as a strong resistance. Economic data from Japan this week was soft with the flash manufacturing PMI posting a modest recovery, rising to 52.5, beating estimates of 50.6.

  • Trade balance -0.36tn vs. -0.07tn
  • All industries activity m/m -0.2% vs. -0.1%
  • Flash manufacturing PMI 52.5 vs. 50.6

USDCAD (1.31): The Bank of Canada met this week and decided to leave interest rates unchanged but sounded dovish in its press conference. The USDCAD has managed to recover some of the declines from the previous week to currently trade at 1.311 at the time of writing. Economic data from Canada included the wholesale sales which declined -0.1% below estimates. Retail sales were mixed with the headline retail sales increasing 0.5% while the core retail sales remained flat. Inflation from Canada was subdued with both the headline and core CPI coming out weaker than expected.

  • Wholesale sales m/m -0.1% vs. 0.2%
  • BoC leaves interest rates unchanged at 0.5%
  • Core retail sales m/m 0.0% vs. 0.2%
  • Retail sales m/m 0.5% vs. 0.1%
  • Core CPI m/m 0.2% vs. 0.3%CPI m/m -0.2% vs. -0.1%

GBPUSD (1.53): The British Pound is set to close the week on a soft note after the cable briefly touched a high of 1.55 on retail sales numbers which beat estimates by a strong margin. With lack of any other major market moving events from the UK, the British Pound soon gave back its gains to trade currently at 1.538. GBPUSD has remained range bound for most of this week but started to weaken since late Thursday on a modest US economic data..

  • Rightmove HPI m/m 0.6% vs. 0.9% previously
  • Public Sector Net borrowing 8.6bn vs. 9.1bn
  • Retail sales m/m 1.9% vs. 0.3%

USDCHF (0.975): The Swiss Franc weakened significantly this week with USDCHF trading at 0.975 at the time of writing. USDCHF is currently poised for a two week high. The gains in USDCHF were largely as a result of the ECB’s dovish talk which gave the Greenback a much needed boost rising against the Swiss Franc. Economic data from Switzerland this week was quiet..

  • Trade balance 3.05bn vs. 2.51bn

US Dollar Index (96.92): The US Dollar Index is currently trading at 96.92 marking a three week high at the time of writing. Economic data from the US this week was a mixed bag. Housing data was weak while the weekly unemployment claims posted strong gains and reminded the markets of the strong US labour markets. The Greenback will now look to an important week ahead when the FOMC is due to meet.

  • NAHB Housing market index 64 vs. 62
  • Building permits 1.10mn vs. 1.16mn
  • Housing starts 1.21mn vs. 1.14mn
  • Unemployment claims 259k vs. 266k
  • HPI m/m 0.3% vs. 0.4%
  • Existing home sales 5.55mn vs. 5.38mn
  • CB leading index m/m -0.2% vs. 0.0%8
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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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