Weekly Forex Forecast: 04 – 08 May

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The US Dollar saw a roller coaster ride last week as with most of the currency pairs. However, towards the end of the week, the Greenback managed to regain some of its lost ground, while the previously gaining currencies such as the Aussie and the Kiwi dollars eased back from their gains. The Yen turned out to be the weakest currency of the week, losing ground across the board as most of the currencies that rallied managed to keep their gains against the Yen.

Weekly Spot FX Performance – 01/05/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 01/05/2015 (Source: Finviz.com)

The Euro, single currency was the star performer of the week as the currency managed to rally across the board, gaining over 3% for the week, followed up the Swiss Franc.

Fundamentals for the Week 04 – 08 May

Date Time Currency Detail Forecast Previous
04-05-15 03:30 AUD MI Inflation Gauge m/m 0.40%
04:00 NZD ANZ Commodity Prices m/m 4.60%
04:30 AUD Building Approvals m/m -1.70% -3.20%
04:30 AUD ANZ Job Advertisements m/m -1.40%
04:45 CNY HSBC Final Manufacturing PMI 49.4 49.2
10:15 EUR Spanish Manufacturing PMI 54.6 54.3
10:30 CHF Manufacturing PMI 48.2 47.9
10:45 EUR Italian Manufacturing PMI 53.4 53.3
10:50 EUR French Final Manufacturing PMI 48.4 48.4
10:55 EUR German Final Manufacturing PMI 51.9 51.9
11:00 EUR Final Manufacturing PMI 51.9 51.9
11:30 EUR Sentix Investor Confidence 19.5 20
17:00 USD Factory Orders m/m 2.10% 0.20%
19:25 USD FOMC Member Evans Speaks
02:30 AUD AIG Services Index 50.2
05-05-15 04:30 AUD Trade Balance -0.98B -1.26B
07:30 AUD Cash Rate 2.00% 2.25%
AUD RBA Rate Statement
09:45 EUR French Gov Budget Balance -23.4B
10:00 EUR Spanish Unemployment Change -64.8K -60.2K
5th-7th GBP Halifax HPI m/m 0.30% 0.40%
11:30 GBP Construction PMI 57.6 57.8
12:00 EUR EU Economic Forecasts
EUR PPI m/m 0.30% 0.50%
15:30 CAD Trade Balance -0.6B -1.0B
USD Trade Balance -39.2B -35.4B
16:45 USD Final Services PMI 57.8 57.8
17:00 USD ISM Non-Manufacturing PMI 56.2 56.5
USD IBD/TIPP Economic Optimism 51.8 51.3
Tentative NZD GDT Price Index -3.60%
19:45 CAD Gov Council Member Wilkins Speaks
01:45 NZD Employment Change q/q 0.80% 1.20%
06-05-15 NZD Unemployment Rate 5.50% 5.70%
NZD Labor Cost Index q/q 0.40% 0.50%
02:01 GBP BRC Shop Price Index y/y -2.10%
04:00 AUD HIA New Home Sales m/m 1.10%
04:30 AUD Retail Sales m/m 0.40% 0.70%
04:45 CNY HSBC Services PMI 53.1 52.3
10:15 EUR Spanish Services PMI 57.4 57.3
10:45 EUR Italian Services PMI 52.1 51.6
10:50 EUR French Final Services PMI 50.8 50.8
10:55 EUR German Final Services PMI 54.4 54.4
11:00 EUR Final Services PMI 53.7 53.7
11:30 GBP Services PMI 58.6 58.9
12:00 EUR Retail Sales m/m -0.40% -0.20%
15:15 USD ADP Non-Farm Employment Change 192K 189K
15:30 USD Prelim Nonfarm Productivity q/q -1.70% -2.20%
USD Prelim Unit Labor Costs q/q 4.00% 4.10%
16:15 USD Fed Chair Yellen Speaks
17:00 CAD Ivey PMI 50.1 47.9
17:30 USD Crude Oil Inventories 1.9M
20:30 USD FOMC Member Lockhart Speaks
02:30 AUD AIG Construction Index 50.1
07-05-15 02:50 JPY Monetary Base y/y 34.30% 35.20%
04:30 AUD Employment Change 4.0K 37.7K
AUD Unemployment Rate 6.20% 6.10%
08:45 CHF SECO Consumer Climate -11 -6
09:00 EUR German Factory Orders m/m 1.60% -0.90%
09:45 EUR French Industrial Production m/m 0.10% 0.00%
EUR French Trade Balance -3.5B -3.4B
10:00 CHF Foreign Currency Reserves 522.3B
11:10 EUR Retail PMI 48.6
All Day GBP Parliamentary Elections
Tentative EUR Spanish 10-y Bond Auction 1.28|2.3
14:30 USD Challenger Job Cuts y/y 6.40%
15:30 CAD Building Permits m/m -0.90%
USD Unemployment Claims 275K 262K
17:30 USD Natural Gas Storage 81B
22:00 USD Consumer Credit m/m 15.8B 15.5B
02:50 JPY Monetary Policy Meeting Minutes
08-05-15 04:30 AUD RBA Monetary Policy Statement
Tentative CNY Trade Balance 34.5B 3.1B
08:45 CHF Unemployment Rate 3.20% 3.20%
09:00 EUR German Industrial Production m/m 0.40% 0.20%
EUR German Trade Balance 20.3B 19.7B
10:15 CHF CPI m/m 0.10% 0.30%
11:00 EUR Italian Industrial Production m/m 0.30% 0.60%
11:30 GBP Trade Balance -9.8B -10.3B
15:15 CAD Housing Starts 187K 190K
15:30 CAD Employment Change 28.7K
CAD Unemployment Rate 6.80%
USD Non-Farm Employment Change 231K 126K
USD Unemployment Rate 5.40% 5.50%
USD Average Hourly Earnings m/m 0.20% 0.30%
17:00 USD Wholesale Inventories m/m 0.30% 0.30%
04:30 CNY CPI y/y 1.60% 1.40%
09-05-15 CNY PPI y/y -4.60% -4.60%

 

Currencies/Events to Watch this Week

RBA Interest rate decision: There were rumors last week about RBA leaks to some select media outlets about a May rate cut, which was the case with its February rate cut. However, taking these rumors with a pinch of salt, the markets are heading into another closely contested RBA meeting. Economic data does not warrant any rate cuts at the moment however the strengthening Australian dollar is something of a concern, but to expect a rate cut to weaken the Australian dollar is a case that is farfetched. Expect to see some volatility as we expect the RBA to put rates on hold but severely talk down the Aussie from further strengthening. Also on tap later in the week will be the monthly jobs reports from Australia with forecasts of a 6.2% increase in unemployment rate from 6.1%. Retail sales, new home sales make up the rest of the data for the Aussie this week.

Will the Euro keep its gains this week? There is not much of major economic events from Europe this week and it is likely that focus will shift to the Greece negotiations. Last week, it was reported that Greece would strike a deal by Sunday and the markets took this news in their stride. However, a lot is left to be seen and the Euro is likely to be influenced by these factors the coming week.

UK Election Week: Economic data this week from the UK is light, but the major focus will be the UK general elections due to be held on May 7th. The British Pound after rallying last week started losing ground since Friday’s session and is likely to remain very subdued into this week as well until the election results are posted. Consensus is expecting to see a coalition government being formed with a lot of unsaid variables coming into play.

Data heavy week for the US: After a relatively quiet week or weeks, the US Dollar will head into an important data week with the monthly non-farm payrolls data and a speech by Janet Yellen. It is expected that the unemployment rate will dip a point lower from 5.5% to 5.4% and the job gains are expected to see a number around 231k after March’s dismal report. Will the data help revive the US Dollar or will investors continue to extend their selling pressure on the Greenback?

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