Forex Trading Library

Weekly Forex Forecast: August 10 – 14

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The Australian dollar emerged on the top of the list this week gaining over 1.67% for the week beating all its peers. With the exception of the unemployment rate ticking higher for the month, retail sales beat expectations and the Aussie gained further as the RBA struck a neutral tone while keeping interest rates unchanged. AUDUSD closed the week with gains of over 122 pips. The Kiwi dollar was lagging behind closing the week with gains of 0.48%. There was not much of economic data from New Zealand last week with the exception of the quarterly and monthly unemployment data which was mixed, making the bounce in NZD which has been weaker for the past few months, more of a profit taking than anything else.

Weekly Spot FX Performance – 07/08/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 07/08/2015 (Source: Finviz.com)

The Swiss Franc was the weakest currency last week as it lost over -1.85%. Inflation numbers were subdued from the country and the current expectations of a US fed rate hike in September led to the long positions overwhelm the Swiss franc shorts. The British Pound was the next weakest losing -0.8% for the week. The Bank of England poured cold water as investors expected to see the BoE strike a more hawkish tone. Investors were obviously disappointed as most of the hawkish comments from various BoE members did not quite translate into voting for rate hikes.

Fundamentals for the Week August 10 – 14

Date Time Currency Detail Forecast Previous
10-Aug 02:50 JPY Current Account 1.41T 1.64T
JPY Bank Lending y/y 2.50%
08:00 JPY BOJ Monthly Report
JPY Consumer Confidence 42.2 41.7
JPY Economy Watchers Sentiment 53.1 51
11:30 EUR Sentix Investor Confidence 20.2 18.5
14:15 USD FOMC Member Fischer Speaks
16:00 USD FOMC Member Lockhart Speaks
17:00 USD Labor Market Conditions Index m/m 0.8
19:25 USD FOMC Member Lockhart Speaks
11-Aug 02:01 GBP BRC Retail Sales Monitor y/y 1.80%
02:50 JPY M2 Money Stock y/y 3.90% 3.80%
04:30 AUD NAB Business Confidence 10
06:45 JPY 30-y Bond Auction 1.43|2.2
09:00 EUR German WPI m/m 0.20% -0.20%
JPY Prelim Machine Tool Orders y/y 6.60%
11th-14th CNY New Loans 725B 1279B
11th-14th CNY M2 Money Supply y/y 11.70% 11.80%
12:00 EUR German ZEW Economic Sentiment 31.1 29.7
EUR ZEW Economic Sentiment 43.9 42.7
13:00 USD NFIB Small Business Index 95.4 94.1
15:15 CAD Housing Starts 205K 203K
15:30 USD Prelim Nonfarm Productivity q/q 1.60% -3.10%
USD Prelim Unit Labor Costs q/q -0.10% 6.70%
16:30 GBP CB Leading Index m/m -0.40%
11th-13th USD Mortgage Delinquencies 5.54%
17:00 USD Wholesale Inventories m/m 0.40% 0.80%
12-Aug 02:50 JPY Monetary Policy Meeting Minutes
JPY PPI y/y -2.90% -2.40%
03:30 AUD Westpac Consumer Sentiment -3.20%
04:30 AUD Wage Price Index q/q 0.60% 0.50%
07:30 JPY Revised Industrial Production m/m 0.80% 0.80%
JPY Tertiary Industry Activity m/m 0.10% -0.70%
08:30 CNY Industrial Production y/y 6.70% 6.80%
CNY Fixed Asset Investment ytd/y 11.50% 11.40%
CNY Retail Sales y/y 10.60% 10.60%
11:00 EUR Italian Trade Balance 3.98B 4.18B
11:30 GBP Average Earnings Index 3m/y 2.80% 3.20%
GBP Claimant Count Change 1.4K 7.0K
GBP Unemployment Rate 5.60% 5.60%
12:00 CHF ZEW Economic Expectations -5.4
EUR Industrial Production m/m -0.10% -0.40%
Tentative EUR German 10-y Bond Auction 0.88|1.1
13:00 AUD RBA Deputy Gov Lowe Speaks
17:00 USD JOLTS Job Openings 5.42M 5.36M
17:30 USD Crude Oil Inventories -4.4M
20:01 USD 10-y Bond Auction 2.23|2.7
21:00 USD Federal Budget Balance -113.5B 51.8B
13-Aug 01:30 NZD Business NZ Manufacturing Index 55.2
01:45 NZD FPI m/m 0.50%
02:01 GBP RICS House Price Balance 42% 40%
02:50 JPY Core Machinery Orders m/m -4.90% 0.60%
04:00 AUD MI Inflation Expectations 3.40%
05:15 AUD RBA Assist Gov Kent Speaks
09:00 EUR German Final CPI m/m 0.20% 0.20%
09:45 EUR French CPI m/m -0.40% -0.10%
10:15 CHF PPI m/m -0.20% -0.10%
14:30 EUR ECB Monetary Policy Meeting Accounts
15:30 CAD NHPI m/m 0.30% 0.20%
USD Core Retail Sales m/m 0.50% -0.10%
USD Retail Sales m/m 0.50% -0.30%
USD Unemployment Claims 272K 270K
USD Import Prices m/m -1.00% -0.10%
17:00 USD Business Inventories m/m 0.30% 0.30%
17:30 USD Natural Gas Storage 32B
20:01 USD 30-y Bond Auction 3.08|2.2
14-Aug 01:45 NZD Retail Sales q/q 0.50% 2.70%
NZD Core Retail Sales q/q 0.70% 2.90%
14th-18th CNY Foreign Direct Investment ytd/y 8.00%
08:30 EUR French Prelim GDP q/q 0.20% 0.60%
09:00 EUR German Prelim GDP q/q 0.50% 0.30%
09:45 EUR French Prelim Non-Farm Payrolls q/q 0.10% 0.00%
11:00 EUR Italian Prelim GDP q/q 0.30% 0.30%
11:30 GBP Construction Output m/m 2.40% -1.30%
12:00 EUR Final CPI y/y 0.20% 0.20%
EUR Flash GDP q/q 0.40% 0.40%
EUR Final Core CPI y/y 1.00% 1.00%
15:30 CAD Manufacturing Sales m/m 2.10% 0.10%
USD PPI m/m 0.10% 0.40%
USD Core PPI m/m 0.10% 0.30%
16:15 USD Capacity Utilization Rate 78.00% 78.40%
USD Industrial Production m/m 0.30% 0.30%
17:00 USD Prelim UoM Consumer Sentiment 93.5 93.1
USD Prelim UoM Inflation Expectations 2.80%

 

Currencies/Events to Watch this Week

After a busy first week of August, the markets will be looking to a more relaxed week ahead with the current themes playing out.

New Zealand retail sales: The next main economic indicator from New Zealand will be the quarterly retail sales report. Expectations are again very subdued with the polled economists expecting retail sales in the last quarter to have grown a meager 0.5% on the headline and 0.7% on the core, down from 2.7% and 2.9% from the quarter before. A disappointing print on these already dovish estimates will likely see the Kiwi resume its bearish trend. However, in the event that retail sales beat estimates, we could expect the current short term bounce continue to tread upwards.

Eurozone GDP: After a soft calendar in the first week, the Eurozone will see a busy week ahead with various countries reporting the quarterly GDP numbers and inflation reading. For the Eurozone, GDP is expected to stay put at 0.4% for the quarter while rising 0.2% for the year. Of interest will be the German preliminary GDP number which is expected to show the country grow at a pace of 0.5% over the previous quarter. Also on the agenda will be the Eurozone final CPI which is expected to print 0.2% on the headline and 1.0% on the core.

UK Jobs Report: After a rather disappointing week for investors as far the British Pound is concerned, the markets will look to the monthly jobs report. Expectations are bleak with the unemployment rate in the UK expected to remain at 5.6% while the average earnings index is expected to rise a slower pace of 2.8% for the month. A miss on the estimates could cement the BoE’s view that while there will be a hike in interest rates, it could come at a much slower pace than anticipated.

Canada Manufacturing sales: Not much of data from Canada this week with the exception of manufacturing sales which is expected to post a strong growth of 2.1%, up from 0.1% previously. The CAD has been trading mixed despite a match in estimates on the monthly jobs report. A beat on the hawkish expectations in manufacturing sales could see some short strength in the Canadian Dollar.

Fed Speak, Retail Sales: The US markets kicks off with a lot of Fed speeches scheduled on Monday. The markets will be expecting the Fed members to maintain their hawkish views on interest rate hikes. In terms of economic data, this week will see the release of the monthly retail sales numbers which is expected to grow at a pace of 0.5% on both the headline and core readings followed by the UoM consumer sentiment and inflation expectations.

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