Weekly Forex Forecast: 18 – 22 May

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The Euro, single currency managed to take it top spot once again after slipping the week before, gaining close to 2% for the week. The US Dollar continues to remain weak along with the Kiwi Dollar. However, the New Zealand Dollar managed to shed some of the declines from previous week to stabilize at better levels. Economic data continues to remain mixed and broadly weaker as far as the US Economy is concerned and this has led into most of the other currencies gaining ground against the Greenback.

Weekly Spot FX Performance – 15/05/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 15/05/2015 (Source: Finviz.com)

Last week continued to remain a mixed bag for the Kiwi dollar. While the currency was supported by better than expected retail sales data, news about Fonterra, the country’s largest dairy exporter, cutting its forecasts weighed in on the Kiwi dollar, and to some extent on the Australian dollar as well.

Fundamentals for the Week 18 – 22 May

Date Time Currency Detail Forecast Previous
18-May 02:01 GBP Rightmove HPI m/m 1.60%
02:30 AUD RBA Deputy Gov Lowe Speaks
02:50 JPY Core Machinery Orders m/m 1.70% -0.40%
04:30 AUD New Motor Vehicle Sales m/m 0.50%
07:30 JPY Revised Industrial Production m/m -0.30% -0.30%
JPY Tertiary Industry Activity m/m -0.50% 0.30%
09:00 USD FOMC Member Evans Speaks
10:15 CHF Retail Sales y/y -2.00% -2.70%
11:00 EUR Italian Trade Balance 2.47B 3.54B
13:00 EUR German Buba Monthly Report
All Day CAD Bank Holiday
17:00 USD NAHB Housing Market Index 57 56
19-May 01:45 NZD PPI Input q/q -0.60% -0.40%
NZD PPI Output q/q 0.10% -0.10%
03:00 AUD CB Leading Index m/m 0.50%
04:30 AUD Monetary Policy Meeting Minutes
06:00 NZD Inflation Expectations q/q 1.80%
11:30 GBP CPI y/y 0.00% 0.00%
GBP PPI Input m/m 0.80% 0.30%
GBP RPI y/y 0.90% 0.90%
GBP Core CPI y/y 1.00% 1.00%
GBP HPI y/y 7.70% 7.20%
GBP PPI Output m/m 0.20% 0.20%
12:00 EUR German ZEW Economic Sentiment 48.9 53.3
EUR Final CPI y/y 0.00% 0.00%
EUR ZEW Economic Sentiment 62.4 64.8
EUR Final Core CPI y/y 0.60% 0.60%
EUR Trade Balance 22.9B 22.0B
15:30 USD Building Permits 1.06M 1.04M
USD Housing Starts 1.02M 0.93M
Tentative NZD GDT Price Index -3.50%
18:45 CAD BOC Gov Poloz Speaks
19:00 CHF Gov Board Member Danthine Speaks
20-May 02:15 AUD RBA Deputy Gov Lowe Speaks
02:50 JPY Prelim GDP q/q 0.40% 0.40%
JPY Prelim GDP Price Index y/y 3.60% 2.40%
03:30 AUD Westpac Consumer Sentiment -3.20%
09:00 EUR German PPI m/m 0.10% 0.10%
10:00 USD FOMC Member Evans Speaks
11:30 GBP MPC Official Bank Rate Votes 0-0-9 0-0-9
GBP MPC Asset Purchase Facility Votes 0-0-9 0-0-9
12:00 CHF ZEW Economic Expectations -23.2
15:30 CAD Wholesale Sales m/m 0.30% -0.40%
17:30 USD Crude Oil Inventories -2.2M
21:00 USD FOMC Meeting Minutes
21-May 01:45 NZD Visitor Arrivals m/m -3.60%
01:50 AUD RBA Assist Gov Edey Speaks
04:00 AUD MI Inflation Expectations 3.40%
04:35 JPY Flash Manufacturing PMI 50.3 49.9
04:45 CNY HSBC Flash Manufacturing PMI 49.5 48.9
05:00 NZD Annual Budget Release
06:00 NZD Credit Card Spending y/y 5.20%
07:30 JPY All Industries Activity m/m -0.40% 0.10%
10:00 EUR French Flash Manufacturing PMI 48.6 48
EUR French Flash Services PMI 52 51.4
10:30 EUR German Flash Manufacturing PMI 51.9 52.1
EUR German Flash Services PMI 53.9 54
11:00 EUR Flash Manufacturing PMI 51.8 52
EUR Flash Services PMI 53.9 54.1
EUR Current Account 24.3B 26.4B
11:30 GBP Retail Sales m/m 0.40% -0.50%
13:00 GBP CBI Industrial Order Expectations 3 1
14:30 EUR ECB Monetary Policy Meeting Accounts
15:30 USD Unemployment Claims 267K 264K
16:45 USD Flash Manufacturing PMI 54.6 54.1
17:00 EUR Consumer Confidence -5 -5
USD Philly Fed Manufacturing Index 8.3 7.5
USD Existing Home Sales 5.23M 5.19M
USD CB Leading Index m/m 0.30% 0.20%
17:30 USD Natural Gas Storage 111B
20:30 EUR ECB President Draghi Speaks
USD FOMC Member Fischer Speaks
22-May 02:00 USD FOMC Member Williams Speaks
05:00 CNY CB Leading Index m/m 0.20%
Tentative JPY Monetary Policy Statement
09:00 EUR German Final GDP q/q 0.30% 0.30%
Tentative JPY BOJ Press Conference
11:00 EUR German Ifo Business Climate 108.3 108.6
EUR ECB President Draghi Speaks
11:30 GBP Public Sector Net Borrowing 7.9B 6.7B
12:00 EUR Italian Retail Sales m/m 0.20% -0.20%
12:45 GBP MPC Member Shafik Speaks
14:00 GBP BOE Gov Carney Speaks
15:30 CAD Core CPI m/m 0.10% 0.60%
CAD Core Retail Sales m/m 0.70% 2.00%
CAD CPI m/m 0.10% 0.70%
CAD Retail Sales m/m 0.50% 1.70%
USD CPI m/m 0.10% 0.20%
USD Core CPI m/m 0.20% 0.20%
16:30 EUR ECB President Draghi Speaks
GBP BOE Gov Carney Speaks
JPY BOJ Gov Kuroda Speaks

Currencies/Events to Watch this Week

RBA Monetary policy minutes: The minutes of the RBA’s meeting concluded earlier this month is due to be released on 19th May. The markets will get a glimpse into the discussions that led to the Central Bank’s decision to cut interest rates. While the Aussie reversed its losses and turned bullish after the 25bps rate cut, the meeting minutes are likely to offer clues into the future course of action by the Australian Central Bank.

Canada Retail sales and CPI: Canada has a busy scheduled from Tuesday next week with retail sales and CPI data, besides wholesale sales due for release. Expectations are for the core CPI as well as the headline to ease, but given that Oil prices have been largely stable for the most part, there could be an upside surprise.

Busy week for Euro: This week has a lot of economic data from Europe including flash manufacturing and services PMI along with the Eurozone final core CPI. So far economic data from Europe has been relatively positive and if data continues to support this view, the Euro could continue to post gains.

UK Inflation data: After last week, Mark Carney in the BoE’s inflation report hearing noted that it would take a while for inflation to reach the bank’s 2% target, the markets will be looking closely at the CPI numbers from the UK due on 19th May. Expectations are for the headline CPI to remain flat while the Core CPI is also expected to remain unchanged at 1%. The BoE will also release its meeting minutes this week followed by the retail sales data for April.

Japan GDP: With the BoJ opting to buy more time before deciding to expand on its monetary stimulus package, the week ahead will see the preliminary GDP numbers being posted. It is expected that GDP grew by 0.4%, same as the previous quarter. The BoJ in recent times was optimistic that inflation would reach the bank’s target sooner than later. Also on tap is the BoJ’s monetary policy statement and press conference.

US Housing data, FOMC on tap: The first part of the week will see the building permits and housing starts data besides the FOMC meeting minutes due on 20th May, although it is unlikely to see even a hawkish report help turn the sentiment around in the US Dollar. The only other major market moving events this week is the CPI data due on Friday with expectations that the CPI for the month of April eased to 0.1% and unchanged on the core at 0.2%

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