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Weekly Forex Wrap Up: July 31, 2015

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AUDUSD (0.734): The Australian Dollar was weaker against the Greenback for most of this week as economic data from the country remained weak. Building approvals for the month fell -8.2% well below estimates of -0.8%. Other economic data included the quarterly import prices which grew at a pace of 1.4%, while the producer price index was up 0.3% for the quarter. The Aussie opened the week lower at 0.727 before dropping lower to post a weekly low below 0.725 but quickly reversed its losses late Friday, to gain 0.63% for the week.

  • RBA Governor Stevens Speech
  • Building approvals m/m -8.2% vs. -0.8%
  • Import prices q/q 1.4% vs. 1.4%
  • PPI q/q 0.3% vs. 0.2%
  • Private sector credit m/m 0.4% vs. 0.5%

EURUSD (1.08): The Euro started the week on a subdued note on account of the risks from the FOMC and the US GDP. For the week, the Euro was up 0.85% at the time of writing, reversing the losses from weekly lows of 1.0901 to trade near 1.1075. The single currency was trading with the fundamentals albeit mostly sideways. The Euro got a boost late Friday as the Eurozone flash Core CPI estimates for the year saw consumer inflation rise to 1%, last seen in April 2014. The Euro surged against the Dollar on the news. However, considering that the CPI estimates are only preliminary a confirmation could push the currency higher in the near term.

  • German import prices m/m -0.5% vs. 0.2%
  • German Ifo business climate 108 vs. 107.6
  • Money supply y/y 5% vs. 5/1%
  • Private loans y/y 0.6% vs. 0.7%
  • German prelim CPI m/m 0.2% vs. 0.2%
  • Spain flash CPI y/y 0.0% vs. 0.1%
  • Spain flash GDP q/q 1% vs. 1.1%
  • German retail sales m/m -2.3% vs. 0.3%
  • French consumer spending m/m 0.4% vs. 0.7%
  • Eurozone CPI flash estimate y/y 0.2% vs. 0.2%; core CPI flash estimates y/y 1% vs. 0.8%
  • Eurozone unemployment 11.1% vs. 11.0%
  • Italy preliminary CPI m/m -0.1% vs. 0.0%

NZDUSD (0.664): There was not much of economic data this week from New Zealand with the exception of the speech from the RBNZ Governor, Wheeler who left the door open for further rate cuts in his speech while also noting that there was more room for the Kiwi to depreciate. The Kiwi was volatile this week as the currency initially surged to the highs above 0.67235 before falling to weekly lows near 0.655 and managing to recover the losses. The Kiwi was up 0.85% for the week.

  • RBNZ Governor Wheeler Speech
  • Building consents m/m -4.1% vs. 0.0%
  • Business confidence -15.3 vs. -2.3

USDJPY (123.64): Economic data from Japan was limited this week but retail sales surged 0.9% beating estimates while at the same time the preliminary industrial production also picked up, growing at a pace of 0.8%, above the estimates of 0.4%. The Yen was mostly subdued this week heading into the Federal Reserve event as the currency weakened initially only to gain against the Greenback on Friday evening. USDJPY was down -0.19% for the week after the currency posted highs above 123.5 and failed to hold on to the gains.

  • SPPI y/y 0.4% vs. 0.6%
  • Retail sales y/y 0.9% vs. 0.8%
  • Prelim industrial production m/m 0.8% vs. 0.4%
  • Household spending y/y -2% vs. 2%
  • Tokyo Core CPI y/y -0.1% vs. 0.0%
  • National Core CPI y/y 0.1% vs. 0.0%
  • Housing starts y/y 16/3% vs. 3/2%

USDCAD (1.297): The Canadian dollar was stronger from the start of this week as the currency was down -0.59% at the time of writing. USDCAD posted weekly highs to 1.3088 and quickly reversed its gains but stayed well above the weekly lows of 1.2877. There was not much of economic data from Canada this week with the exception of the Canadian monthly GDP released on Friday. Data showed that the Canadian economy contracted at a pace of -0.2% in June a modest increase from the -0.1% decline in May. The contraction in the monthly GDP marks two straight months of the Canadian economy stalling in growth and comes on the back of the BoC rate cut last month.

  • RMPI m/m 0.0% vs. 1.1%
  • IPPI m/m 0.5% vs. 0.3%
  • GDP m/m -0.2% vs. 0.0%

GBPUSD (1.565): The first estimates of the Q2 GDP from the UK saw the economy grow at a modest pace of 0.7%, up from 0.4% in the first quarter. With improving labour market and the GDP showing signs of momentum in the economy, the UK is most likely to see a rate hike in the medium term outlook. GBPUSD gained close to 1% for the week as the currency stayed strong and was seen testing the highs of 1.5685.

  • CBI Industrial order expectations -10 vs. 04
  • Preliminary GDP q/q 0.7% vs. 0.7%
  • Index of services 3m/3m 0.4% vs. 0.5%
  • Money supply m/m -0.5% vs. 0.4%
  • CBI Realized sales 21 vs. 30
  • Gfk consumer confidence 4 vs. 5

USDCHF (0.956): The USDCHF was well supported this week as the currency managed to post weekly highs above 0.97 before reversing the gains sharply late Friday shedding close to -0.69% for the week. There were no major market moving events from Switzerland this week leaving most of the fundamentals to play out for the US Dollar.

  • UBS Consumption indicator 1.68 vs. 1.62 previously
  • KOF Economic barometer 99.8 vs. 90.3

US Dollar Index (96.5): The US Dollar Index is down -0.8% for the week after rallying to highs above 97.8. With September being the date when the FOMC will decide whether to hike rates or not, the markets focused on the second quarter GDP estimates, which saw the US economy growing at a pace of 2.3%. Although the GDP missed estimates, the fact that there was a strong rebound in the economy supported the Greenback. It was in the Friday’s trading session which saw the employment cost index rise at the slowest pace gaining a meager 0.2% growth which saw a sharp selloff in the Greenback. Besides the economic data, the fact that end of month capital flows which usually sees an unwinding or positions led to the decline.

  • Core durable goods orders m/m 0.8% vs. 0.4%; durable goods orders m/m 3.4% vs. 3.2%
  • Flash services PMI 55.2 vs. 55.1
  • CB Consumer confidence 90.9 vs. 100.1
  • Pending home sales m/m -1.8% vs. 1.0%
  • FOMC releases monetary policy statement
  • Fed funds rate unchanged at < 0.25%
  • Q2 advance GDP estimates 2.3% vs. 2.6%
  • Weekly unemployment claims 267k vs. 268k
  • Employment cost index q/q 0.2% vs. 0.6%
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