Weekly Forex Forecast: July 13 – 17

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After close to two months of decline, the Kiwi Dollar came out as the top performing currency for the week, gaining close to 0.45% against the Greenback. The Euro came in second gaining 0.41% as hopes of a resolution to the Greece crisis started to send the single currency higher. The Japanese Yen had initially started the week on a strong note due to safe haven flows led by the market reaction to the Greek referendum vote last Sunday but soon reversed towards the mid week.

Weekly Spot FX Performance – 10/07/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 10/07/2015 (Source: Finviz.com)

The Aussie and the Canadian dollar were the weakest currencies this week losing on average -1% and -0.6% for the week. The Canadian dollar was weaker, tracking Crude Oil prices which fell to fresh lows after weeks of trading sideways for the most part.

Fundamentals for the Week July 13 – 17

Date Time Currency Detail Forecast Previous
13-Jul 01:45 NZD FPI m/m 0.40%
Tentative CNY Trade Balance 57.0B 59.5B
07:30 JPY Revised Industrial Production m/m -2.10% -2.20%
JPY Tertiary Industry Activity m/m -0.20% -0.20%
11:30 GBP BOE Credit Conditions Survey
All Day EUR Eurogroup Meetings
21:00 USD Federal Budget Balance 41.2B -82.4B
14-Jul 02:01 GBP BRC Retail Sales Monitor y/y 0.00%
04:30 AUD NAB Business Confidence 7
All Day EUR French Bank Holiday
09:00 EUR German Final CPI m/m -0.10% -0.10%
10:15 CHF PPI m/m 0.20% -0.80%
14th-15th CNY New Loans 1050B 901B
14th-15th CNY M2 Money Supply y/y 11.00% 10.80%
11:30 GBP CPI y/y 0.10% 0.10%
GBP PPI Input m/m -0.60% -0.90%
GBP RPI y/y 1.10% 1.00%
GBP Core CPI y/y 0.90% 0.90%
GBP HPI y/y 5.90% 5.50%
GBP PPI Output m/m 0.10% 0.10%
12:00 EUR German ZEW Economic Sentiment 30.6 31.5
EUR ZEW Economic Sentiment 51.1 53.7
EUR Industrial Production m/m 0.20% 0.10%
13:00 USD NFIB Small Business Index 98.6 98.3
All Day EUR ECOFIN Meetings
15:30 USD Core Retail Sales m/m 0.70% 1.00%
USD Retail Sales m/m 0.40% 1.20%
USD Import Prices m/m 0.30% 1.30%
17:00 USD Business Inventories m/m 0.20% 0.40%
20:00 GBP MPC Member Miles Speaks
15-Jul 03:30 AUD Westpac Consumer Sentiment -6.90%
04:30 AUD New Motor Vehicle Sales m/m -1.30%
05:00 CNY GDP q/y 6.90% 7.00%
CNY Industrial Production y/y 6.00% 6.10%
CNY Fixed Asset Investment ytd/y 11.20% 11.40%
CNY NBS Press Conference
CNY Retail Sales y/y 10.20% 10.10%
Tentative JPY Monetary Policy Statement
Tentative JPY BOJ Press Conference
09:45 EUR French CPI m/m 0.10% 0.20%
11:30 GBP Average Earnings Index 3m/y 3.30% 2.70%
GBP Claimant Count Change -9.3K -6.5K
GBP Unemployment Rate 5.50% 5.50%
12:00 CHF ZEW Economic Expectations 0.1
Tentative EUR German 10-y Bond Auction 0.81|1.7
15:30 CAD Manufacturing Sales m/m 0.40% -2.10%
USD PPI m/m 0.20% 0.50%
USD Core PPI m/m 0.10% 0.10%
USD Empire State Manufacturing Index 3.4 -2
16:15 USD Capacity Utilization Rate 78.20% 78.10%
USD Industrial Production m/m 0.20% -0.20%
17:00 CAD BOC Monetary Policy Report
CAD BOC Rate Statement
CAD Overnight Rate 0.75% 0.75%
USD Fed Chair Yellen Testifies
17:30 USD Crude Oil Inventories 0.4M
Tentative NZD GDT Price Index -5.90%
18:15 CAD BOC Press Conference
21:00 USD Beige Book
22:00 USD FOMC Member Williams Speaks
16-Jul 01:30 NZD Business NZ Manufacturing Index 51.5
01:45 NZD CPI q/q 0.50% -0.30%
04:00 AUD MI Inflation Expectations 3.00%
04:30 AUD NAB Quarterly Business Confidence
16th-19th CNY Foreign Direct Investment ytd/y 10.10%
08:00 JPY BOJ Monthly Report
10:15 CHF Retail Sales y/y 1.90% 1.60%
11:00 EUR Italian Trade Balance 2.83B 3.74B
12:00 EUR Final CPI y/y 0.20% 0.20%
EUR Final Core CPI y/y 0.80% 0.80%
EUR Trade Balance 22.3B 24.3B
Tentative EUR Spanish 10-y Bond Auction 2.26|1.8
14:45 EUR Minimum Bid Rate 0.05% 0.05%
15:30 CAD Foreign Securities Purchases 10.23B 12.94B
EUR ECB Press Conference
USD Unemployment Claims 282K 297K
16:30 GBP CB Leading Index m/m 0.40%
17:00 USD Fed Chair Yellen Testifies
USD Philly Fed Manufacturing Index 12.1 15.2
USD NAHB Housing Market Index 59 59
17:30 USD Natural Gas Storage 91B
21:00 GBP BOE Gov Carney Speaks
23:00 USD TIC Long-Term Purchases 53.9B
17-Jul 03:00 AUD CB Leading Index m/m -0.30%
15:30 CAD Core CPI m/m -0.10% 0.40%
CAD CPI m/m 0.20% 0.60%
USD Building Permits 1.11M 1.25M
USD CPI m/m 0.30% 0.40%
USD Core CPI m/m 0.20% 0.10%
USD Housing Starts 1.09M 1.04M
17:00 USD Prelim UoM Consumer Sentiment 96.7 96.1
USD FOMC Member Fischer Speaks
USD Prelim UoM Inflation Expectations 2.70%


Currencies/Events to Watch this Week

BoC Rate Statement: The Bank of Canada meets this week for its monetary policy decision. Expectations are for the Bank of Canada to leave interest rates unchanged. Recent economic data from Canada has been largely mixed and the BoC’s statement could likely shift the sentiment in the short term. Besides the BoC’s rate statement, other important economic releases this week include manufacturing sales, which is expected to grow 0.4% after contracting -2.1% a month ago. Inflation data is also on the tap with expectations that the Core CPI has likely declined -0.1%, down from 0.4% a month ago while the headline CPI is expected to grow at a softer pace of 0.2%, down from 0.6% previously.

ECB Meeting & Greece: The Eurogroup meetings were underway over the weekend and as per the latest reports, it is understood that the Greek parliament was backing the bailout deal, but talks stalled on Sunday’s Eurogroup and Eurosummit meetings. With a new deadline of July 15th, the Euro is likely to remain volatile to the headlines. Also on tap is the ECB’s press conference due later in the week. While not much is expected from the ECB’s meeting this month, focus will be on the QE purchase program, which is expected to see a slowdown in bond purchases due to the low volume summer months ahead.

UK CPI and Jobs: The yearly inflation numbers are due for release this week for the UK. Expectations are for the CPI to have grown at a steady pace of 0.1% for the year while the headline CPI is also expected to be steady at 0.9%. Inflation has been a clear sore point for the UK which has failed to rise despite a modest pickup in the economic and the labour markets. The June jobs report is also due this week with expectations that the average earnings index rising to 3.3%, up from 2.7% previously, a rather hawkish estimate. The UK unemployment rate is expected to remain unchanged at 5.5%

Busy week for the US: The US economic calendar is packed for the week with lot of major market moving events due. Retail sales, PPI and inflation data is due along with the testimony of Fed Chair Janet Yellen, who in her recent speech at Cleveland remained upbeat for a rate hike in September, but admitting that inflation target of 2% would take a lot longer to achieve.

New Zealand CPI: The Kiwi managed to post gains for the first time last week in the past few months. The quarterly CPI data is due this week with expectations that New Zealand inflation soared 0.5% for the quarter, up from -0.3% from the previous quarter. The RBNZ has remained dovish and any miss of estimates in the quarterly CPI could see a new wave of selling come into the Kiwi currency pairs.


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