Weekly Forex Forecast: 01 – 05 June

The New Zealand Dollar turned out to be the weakest performing currency pair for the week, losing close to -2.7% for the week, followed by the Australian Dollar and the Japanese Yen. The US Dollar managed to turn stronger for the week in what looks like a completion to the recent correction.

The Swiss Franc however turned out to be the best performing currency for the week, rising 0.28%. Despite a weak start at the beginning of the week, the Euro managed to trim its losses to close the week for -0.16% loss.

Fundamentals for the Week 01 – 05 June

Date	Time	Currency	Detail	Expected	Previous
01-Jun	02:30	AUD	AIG Manufacturing Index		48
	02:50	JPY	Capital Spending q/y	-0.10%	2.80%
	03:30	AUD	MI Inflation Gauge m/m		0.30%
	04:00	CNY	Manufacturing PMI	50.2	50.1
		CNY	Non-Manufacturing PMI		53.4
	04:30	AUD	Building Approvals m/m	-1.70%	2.80%
		AUD	Company Operating Profits q/q	0.10%	-0.20%
	04:35	JPY	Final Manufacturing PMI	50.9	50.9
	04:45	CNY	HSBC Final Manufacturing PMI	49.2	49.1
	All Day	EUR	German Prelim CPI m/m	0.00%	0.00%
	09:30	AUD	Commodity Prices y/y		-20.50%
	10:15	EUR	Spanish Manufacturing PMI	54.4	54.2
	10:30	CHF	Manufacturing PMI	47.2	47.9
	10:45	EUR	Italian Manufacturing PMI	53.1	53.8
	10:50	EUR	French Final Manufacturing PMI	49.3	49.3
	10:55	EUR	German Final Manufacturing PMI	51.4	51.4
	11:00	EUR	Final Manufacturing PMI	52.3	52.3
	11:30	GBP	Manufacturing PMI	52.7	51.9
	15:30	USD	Core PCE Price Index m/m	0.20%	0.10%
		USD	Personal Spending m/m	0.20%	0.40%
		USD	Personal Income m/m	0.30%	0.00%
	16:30	USD	FOMC Member Fischer Speaks
	16:45	USD	Final Manufacturing PMI	54.2	53.8
	17:00	USD	ISM Manufacturing PMI	51.9	51.5
		USD	Construction Spending m/m	0.70%	-0.60%
		USD	ISM Manufacturing Prices	43	40.5
02-Jun	01:45	NZD	Overseas Trade Index q/q	1.60%	-1.90%
	02:50	JPY	Monetary Base y/y	34.30%	35.20%
	04:30	AUD	Current Account	-10.9B	-9.6B
		JPY	Average Cash Earnings y/y	0.40%	0.00%
	06:45	JPY	10-y Bond Auction		0.43|2.2
	07:30	AUD	Cash Rate	2.00%	2.00%
		AUD	RBA Rate Statement
	10:00	EUR	Spanish Unemployment Change	-115.5K	-118.9K
	10:55	EUR	German Unemployment Change	-10K	-8K
	11:30	GBP	Construction PMI	55.1	54.2
		GBP	Net Lending to Individuals m/m	2.3B	3.1B
		GBP	M4 Money Supply m/m	0.40%	0.30%
		GBP	Mortgage Approvals	64K	61K
	12:00	EUR	CPI Flash Estimate y/y	0.10%	0.00%
		EUR	Core CPI Flash Estimate y/y	0.70%	0.60%
		EUR	PPI m/m	0.10%	0.20%
	Tentative	GBP	10-y Bond Auction		1.88|1.5
	17:00	USD	Factory Orders m/m	0.00%	2.10%
		USD	IBD/TIPP Economic Optimism	49.8	49.7
	Tentative	NZD	GDT Price Index		-2.20%
	All Day	USD	Total Vehicle Sales	17.0M	16.5M
03-Jun	02:01	GBP	BRC Shop Price Index y/y		-1.90%
	02:30	AUD	AIG Services Index		49.7
	04:00	NZD	ANZ Commodity Prices m/m		-7.40%
	04:30	AUD	GDP q/q	0.60%	0.50%
	04:45	CNY	HSBC Services PMI	53.3	52.9
	09:00	GBP	Nationwide HPI m/m	0.30%	1.00%
	10:15	EUR	Spanish Services PMI	59.5	60.3
	10:45	EUR	Italian Services PMI	52.7	53.1
	10:50	EUR	French Final Services PMI	51.6	51.6
	10:55	EUR	German Final Services PMI	52.9	52.9
	11:00	EUR	Final Services PMI	53.3	53.3
		EUR	Italian Monthly Unemployment Rate		13.00%
		EUR	Italian Quarterly Unemployment Rate		13.00%
	11:30	GBP	Services PMI	59.2	59.5
	12:00	EUR	Retail Sales m/m	0.60%	-0.80%
		EUR	Unemployment Rate	11.20%	11.30%
	14:45	EUR	Minimum Bid Rate	0.05%	0.05%
	15:15	USD	ADP Non-Farm Employment Change	200K	169K
	15:30	CAD	Trade Balance	-2.0B	-3.0B
		EUR	ECB Press Conference
		USD	Trade Balance	-44.2B	-51.4B
	16:45	USD	Final Services PMI	56.5	56.4
	17:00	USD	ISM Non-Manufacturing PMI	57.2	57.8
	17:30	USD	Crude Oil Inventories		-2.8M
	21:00	USD	Beige Book
04-Jun	04:30	AUD	Retail Sales m/m	0.30%	0.30%
		AUD	Trade Balance	-2.11B	-1.32B
	06:45	JPY	30-y Bond Auction		1.51|2.7
	11:10	EUR	Retail PMI		49.5
	Tentative	EUR	French 10-y Bond Auction		0.98|1.7
	14:00	GBP	Official Bank Rate	0.50%	0.50%
		GBP	Asset Purchase Facility	375B	375B
	Tentative	GBP	MPC Rate Statement
	14:30	USD	Challenger Job Cuts y/y		52.80%
	15:30	USD	Unemployment Claims	277K	282K
		USD	Revised Nonfarm Productivity q/q	-2.80%	-1.90%
		USD	Revised Unit Labor Costs q/q	5.80%	5.00%
	17:00	CAD	Ivey PMI		58.2
	17:30	USD	Natural Gas Storage		112B
	19:00	USD	FOMC Member Tarullo Speaks
05-Jun	02:30	AUD	AIG Construction Index		47
	08:00	JPY	Leading Indicators	107.30%	106.00%
	09:00	EUR	German Factory Orders m/m	0.60%	0.90%
	09:45	EUR	French Trade Balance	-4.0B	-4.6B
	10:00	CHF	Foreign Currency Reserves		521.9B
	5th-9th	GBP	Halifax HPI m/m	0.20%	1.60%
	11:30	GBP	Consumer Inflation Expectations		1.90%
	12:00	EUR	Revised GDP q/q	0.40%	0.40%
	All Day	ALL	OPEC Meetings
	15:30	CAD	Employment Change	10.2K	-19.7K
		CAD	Unemployment Rate	6.80%	6.80%
		CAD	Labor Productivity q/q	0.20%	-0.10%
		USD	Non-Farm Employment Change	226K	223K
		USD	Unemployment Rate	5.40%	5.40%
		USD	Average Hourly Earnings m/m	0.20%	0.10%
	19:30	USD	FOMC Member Dudley Speaks
	22:00	USD	Consumer Credit m/m	16.5B	20.5B

Currencies/Events to Watch this Week

Australia Q1 GDP: This week will see the first quarter GDP results for Australia. Expectations are for the Australian GDP to rise modestly to 0.6% for the quarter, up from 0.5% previously. With the RBA lowering interest rates to 2%, any hiccups in the GDP data could see another wave of interest rate cut speculation from the RBA. Another factor that could weigh into the GDP data is the relatively stronger currency exchange rate of the Aussie during the first quarter, which could have an impact on the GDP growth.

Canada Unemployment Rate: Canada’s labour market data will be released on Friday and expectations are for the unemployment rate to remain unchanged at 6.8%, while expecting a modest pickup in the unemployment change. With the BoC holding rates steady and with the most recent GDP data disappointing, the unemployment rate will be an important event to watch out for.

ECB Press Conference: With the previous ECB meeting turning out to be a non-event the markets look forward to this month’s ECB meeting. Although nothing much is likely to be said at this meeting, the focus continues to remain on Greece as the country prepares for its next big debt obligation from the IMF. Later in the week, the Eurozone quarterly GDP data is also expected to remain unchanged at 0.4%

UK PMI’s and Bank Rate: Besides the monthly manufacturing, services and construction PMI data, the BoE’s interest rate decision is also due this week. Markets will be closely monitoring the language of the Central Bank for any clues on the forward guidance for interest rate hikes.

Busy week for the US Dollar: The week ahead promises to be a busy week for the Greenback with PMI data alongside the monthly labour market data due during the week. The markets will be expecting to see a strong NFP print while expecting the unemployment rate to hold steady at 5.4%. The big question being whether economic data this week will support the US Dollar?