Weekly Forex Forecast: 1st – 5th December

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Weekly Forex Forecast

 

The Forex markets head into the busiest week of the month with PMI data and Central Bank policy review meetings on the tap. The most important event for the week however will be the monthly US nonfarm payroll data and the ECB press conference.

Fundamentals for the Week 24 – 28 November

Date Event Estimates
1 December China manufacturing PMI 50.5
Japan final manufacturing PMI 52.1
China HSBC final manufacturing PMI 50
Eurozone final manufacturing PMI 50.4
UK Manufacturing PMI 53.1
US Final manufacturing PMI 55
US ISM Manufacturing PMI 57.9
2 December Australia building approvals m/m 5.2%
RBA Overnight cash rate/statement 2.5%
UK Construction PMI 61.2
Eurozone PPI m/m 0.3%
3 December Australia GDP q/q 0.7%
Switzerland GDP q/q 0.3%
Eurozone final services PMI 51.3
UK Services PMI 56.6
Eurozone retail sales m/m 0.6%
UK Autumn forecast statement
US ADP Payroll data 223k
US Final services PMI 56.3
BOC Rate statement 1%
US ISM Non-manufacturing PMI 57.5
4 December Australia retail sales m/m 0.1%
BoE Official bank rate 0.5%
ECB Press conference/rate 0.05%
Canada Ivey PMI 53.2
5 December German factory orders m/m 0.6%
Eurozone revised GDP q/q 0.2%
Canada unemployment change 5.3k
Canada unemployment rate 6.6%
US Nonfarm payroll data 225k
US unemployment rate 5.8%

 

 

Currencies/Events to Watch this Week

  • Focus will be on Mario Draghi this week as the ECB meets for its monthly policy review. Markets are starting to expect a possible increase to the ECB’s asset purchases, but it is highly probable that the markets will be disappointed. Eurozone final GDP estimates are also on the tap which is expected to remain unchanged at 0.2%
  • The UK’s PMI data will be released this week and any upward reading could see the GBP start to push higher. The Bank of England will also be releasing its monthly policy but is expected to be widely unchanged. Look to the Autumn forecast statement to be released this week
  • Canada’s unemployment data is on the tap this week and is expected to see a slowdown in the number of jobs added. The unemployment rate is expected to remain unchanged as well. Actual reading meeting estimates could put downward pressure on the Canadian dollar which has been hit last week by falling oil prices
  • The US NFP data will be the major event for the week ahead especially after last month’s data was mixed. The weekly unemployment claims have been modestly lower but well above their averages. A second month of mixed NFP reading could see the US Dollar ease its gains.
  • Australia’s GDP data, retail sales and the RBA interest rate decision could bring some volatility to the Aussie dollar which has turned out to be susceptible to verbal rhetoric from the RBA officials. A better than expected reading could help the Aussie lift off from its yearly lows.

FX Majors Weekly Pivots

  R3 R2 R1 Pivot S1 S2 S3
EURUSD 1.2691 1.2611 1.2522 1.2442 1.2353 1.2273 1.2184
GBPUSD 1.5965 1.5895 1.5756 1.5687 1.5547 1.5478 1.5339
USDCAD 1.1586 1.1509 1.1367 1.1367 1.1290 1.1148 1.1071
USDJPY 120.771 119.769 119.242 118.24 117.713 116.711 116.184
USDCHF 0.9860 0.9794 0.9727 0.9661 0.9595 0.9528 0.9462

 

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