Weekly Forex Wrap Up: July 17, 2015

By Orbex Last updated Oct 31, 2021

AUDUSD (0.738): The Australian Dollar was relatively under pressure this week as the currency was trading near yearly lows, below 0.741 and with the US Dollar on a firm footing. There was not much of major economic releases from Australia this week. New motor vehicle sales rose 3.8% for the month after last month’s sales fell -0.8%. The consumer sentiment, measured by Westpac was also uplifting as the indicator shrank less than expected at -3.2% against estimates of -6.9% and the CB leading index posted a monthly gain of 0.2% from -0.3% previously. Lower commodity prices and a broader strength in the Greenback led to the Aussie losing close -0.8% for the week.

NAB Business confidence 10 vs. 8 previously
Westpac consumer sentiment -3.2% vs. -6.9%
New Motor vehicle sales m/m 3.8% vs. -0.8% previously
MI inflation expectations 3.4% vs. 3% previously
CB leading index m/m 0.2% vs. -0.3% previously

EURUSD (1.086): The Euro weakened considerably this week as the Greece debt crisis progressed with the Syriza party accepting the creditor’s demands. The bill for reforms including higher VAT and pension cuts among other things was passed by the Greek parliament. This led to the ECB increasing its ELA funding to the country. Eurozone countries need to gain political support domestically in order to unlock the third bailout for Greece. It was a return to the fundamentals for the Euro this week as the Grexit threat subsided. The Euro was also under pressure as the ECB met this week, which left interest rates unchanged. Economic data from the region did not see any major surprises as the Eurozone headline and Core CPI matched estimates of 0.2% and 0.8% respectively.

German final CPI m/m -0.1% vs. -0.1%
German ZEW Economic sentiment 29.7 vs. 30.6
Eurozone ZEW Economic sentiment 42.7 vs. 51.1
Eurozone industrial production m/m -0.4% vs. 0.2%
French CPI m/m -0.1% vs. 0.1%
Eurozone final CPI m/m 0.2% vs. 0.2%; core CPI y/y 0.8% vs. 0.8%
ECB minimum bid rate 0.05%

NZDUSD (0.653): The Kiwi continued to fall, losing over -2% for the week. A stronger US Dollar and continued weak economic data from New Zealand has brought about the selling pressure, which is likely to see further rate cuts from the RBNZ. This week’s data from New Zealand included the quarterly CPI, which was soft at 0.4%, below estimates of 0.5%. The Global dairy trade index fell -10.7% and remains weak, offering no fundamental support to the Kiwi.

FPI m/m 0.5% vs. 0.4%
GDT Price index -10.7% vs. -5.9% previously
NZ Business manufacturing index 55.2 vs. 52 previously
CPI q/q 0.4% vs. 0.5%

USDJPY (124): The Japanese Yen was largely muted this week as the risks of Grexit started to recede. The Yen came under intense selling pressure as Janet Yellen took the stage this week reiterating the Fed’s view for rate hikes. Across the board, the Yen was rather week especially against the stronger US Dollar and the British Pound. USDJPY is currently flirting near the highs of 124, last seen three weeks ago and is likely to post new gains in the coming session. Overall, USDJPY gained 1% for the week.

Revised industrial production m/m -2.1% vs. -2.1%
Tertiary industry activity m/m -0.7% vs. -0.2%

USDCAD (1.298): The Bank of Canada met this week and lowered the benchmark interest rates to 0.5%, a rate cut of 25bps. The Loonie which was already under pressure due to falling Oil prices weakened considerably as the US Dollar gained 2.4% for the week. USDCAD broke above the resistance of 1.28 and was seen trading near 1.298 at the time of writing. Manufacturing sales in the country was weak, rising 0.1% against estimates of 0.3%. However, inflation for the month of June was flat, with the core CPI staying flat at 0%, while the headline CPI fell to 0.2% from 0.6% previously.

Manufacturing sales m/m 0.1% vs. 0.3%
BoC cuts rates to 0.5% from 0.75%
Core CPI m/m 0.0% vs. -0.1%; CPI m/m 0.2% vs. 0.2%

GBPUSD (1.558): The British Pound saw a week of less optimistic data. The monthly unemployment numbers failed to meet estimates as the average earnings index fell below estimates of 3.3% to post gains of 3.2%. The UK unemployment rate also ticked this last month, rising to 5.6%. Inflation continued to remain weak in the country. However, the Pound surged as BoE Governor, Mark Carney noted that the time for lower interest rates was nearing its end, signaling a shift in the BoE’s view for rate hikes. GBPUSD initially fell to weekly lows of 1.546 before rising to test highs of 1.56.

CPI y/y 0.0% vs. 0.0%; Core CPI y/y 0.8% vs. 0.9%
PPI Input m/m -1.3% vs. -0.7%; PPI Output m/m 0.0% vs. 0.1%
BoE Governor Carney speech
Average earnings index 3m/y 3.2% vs. 3.3%
Unemployment rate 5.6% vs. 5.5%
Claimant count change 7k vs. -8.9k
CB leading index m/m -0.4% vs. 0.3% previously

USDCHF (0.959): The Swiss Franc was considerably weaker as the USDCHF gained over 2.2% for the week. Economic data from Switzerland saw the producer price index fall -0.1%, while retail sales posted a dismal performance, falling -1.8% against estimates of 1.9%. USDCHF was strong since the start, but the Greenback initially fell to weekly lows of 0.942 before rising above previous week’s high at 0.95.

PPI m/m -0.1% vs. 0.2%
ZEW Economic expectations -5.4 vs. 0.1 previously
Retail sales y/y -1.8% vs. 1.9%

US Dollar Index (97.8): The US Dollar suffered an initial setback as retail sales missed estimates and in fact posted negative numbers. However, the Greenback started to gain as Janet Yellen testified to the Senate banking committee reiterating the stand that the Federal Reserve was on course to hike rates. Economic data from the US slowly managed to pick up steam as Producer price index gained 0.4% on the headline and 0.3% on the core. The weekly unemployment claims also rose less than expected at 281k. For the week, the US Dollar Index gained over 1.8% and is seen trading near 97.8.

NFIB small business index 94.1 vs. 98.6
Core retail sales m/m -0.1% vs. 0.7%; retail sales m/m -0.3% vs. 0.2%
Import prices m/m -0.1% vs. 0.1%
PPI m/m 0.4% vs. 0.2%; Core PPI m/m 0.3% vs. 0.1%
Empire state manufacturing index 3.9 vs. 3.4
Capacity utilization rate 78.4% vs. 78.1%
Industrial production m/m 0.3% vs. 0.2%
Fed Chair Yellen testifies
Weekly unemployment claims 281k vs. 284k
Philly Fed manufacturing index 60 vs. 59
Building permits 1.34mn vs. 1.11mn
CPI m/m 0.3% vs. 0.3%; Core CPI m/m 0.2% vs. 0.2%
Housing starts 17mn vs. 1.10mn