AUDUSD (0.7): The Aussie is down -2.6% for the week led by sharp declines in commodities such as Zinc and Copper as China forecasted reduced demand for the raw materials. The Aussie was also under pressure simultaneously by the stronger Greenback which led to strong losses this week. Economic data from Australia this week saw the housing price index which posted a 4.7% quarterly growth, but the data did not help support the Aussie much.
- HPI q/q 4.7% vs. 2.5%
- CB Leading index m/m 0.3% vs. -0.3% previously
EURUSD (1.11): The Euro was undoubtedly weak since last Friday and continued its bearish momentum to the downside. Prices fell to lows near 1.1103 this week as ECB officials took a dovish stand and talked about expanding the ECB’s QE program while the US FOMC officials were on the hawkish side. The currency stabilized after Draghi’s testimony which saw the ECB Chief take a neutral stand noting that only a strong evidence of a slowdown would trigger the ECB to expand its QE program. Data from Eurozone this week saw the flash services and manufacturing PMI’s both of which managed to come in line with estimates.
- German PPI m/m -0.5% vs. -0.3%
- Eurozone consumer confidence -7 vs. -7
- French flash manufacturing PMI 50.4 vs. 48.6; flash services PMI 51.2 vs. 51.1
- German flash manufacturing PMI 52.5 vs. 52.8; flash services PMI 54.3 vs. 54.5
- Eurozone flash manufacturing PMI 52.0 vs. 52.2; flash services PMI 54.0 vs. 54.1
- ECB President Mario Draghi testified to the European Parliament
- German Gfk consumer climate 9.6 vs. 9.8
- German Ifo business climate 108.5 vs. 107.8
- Italy retail sales m/m 0.4% vs. 0.2%
- ECB’s TLTRO 15.5bn vs. 50.3bn
- Eurozone M3 Money supply y/y 4.8% vs. 5.4%
- Eurozone private loans y/y 1.0% vs. 1.1%
NZDUSD (0.63): The Kiwi also saw a strong week led by Fonterra’s upgraded payouts which saw the Kiwi post an intraday rally of nearly 1.5%. However, weak trade balance and a stronger Greenback weighed in pushing NZDUSD to -1.12% losses for the week. Prices look to be supported near 0.6256 which marked the weekly low and a support level where prices managed to bounce off last week as well.
- Westpac Consumer sentiment 106 vs. 113 previously
- Visitor arrivals m/m 0.2% vs. -2.7% previously
- Credit card spending y/y 10.5% vs. 9.8%
- Trade balance -1035Mn vs. -875Mn
USDJPY (120.6): A choppy week for the USDJPY, the Greenback eventually broke out from the range currently testing the weekly highs near 121. USDJPY was mostly trading sideways and broke to the upside on US GDP data. On the Japanese front there were no major economic releases worth noting. However, the Yen was seen trading stronger across the board against its peers for the most part of this week.
- Flash manufacturing PMI 50.9 vs. 51.3
- All industries activity m/m 0.2% vs. 0.1%
- Tokyo Core CPI y/y -0.2% vs. -0.2%
- National Core CPI y/y -0.1% vs. -0.1%
- SPPI y/y 0.7% vs. 0.5%
USDCAD (1.33): The Canadian dollar was weak led by declines in Crude oil prices, although the USDCAD remains largely range bound. Prices briefly created a new high above 1.3375 before easing back lower but the bias remains strongly to the upside with the potential for USDCAD to break higher ground. BoC’s Governor Stephen Poloz gave a speech this week but it did little to move the markets.
- Wholesale sales m/m 0.0% vs. 0.3%
- Core retail sales m/m 0.0% vs. 0.4%
- Retail sales m/m 0.5% vs. 0.5%
GBPUSD (1.51): The British Pound was weak as the Cable fell to a 3-week low. Despite the lack of any major economic releases, the Pound came under pressure as market participants price in a later than expected rate hike from the BoE. The Cable was seen posting declines of -2.2% for the week after opening near the highs of 1.5635. The declines in GBPUSD have been sharp with little to no recovery being seen and with prices now trading in the support zone, there is a scope for a short squeeze.
- Rightmove HPI m/m 0.9% vs. -0.8% previously
- UK Public sector net borrowing 11.3bn vs. 8.7bn
- CBO Industrial order expectations -7 vs. 0
- BBA Mortgage approvals 46.7k vs. 46.3k
USDCHF (0.97): USDCHF posted a 5-week high this week after prices traded near0.982 before easing back. There was not much of economic data from Switzerland this week and the primary driver in USDCHF was the stronger Greenback as risk aversion faded in the Swiss Franc keeping the US Dollar stronger for the week.
- Trade balance 2.87bn vs. 2.77bn
US Dollar Index (96.7): The US Dollar Index was well supported this week since the start by various Fed members who struck a particularly hawkish tone in their speeches. The comments managed to hold up the US Dollar across the board. There wasn’t a lot of economic data from the US this week but weekly unemployment claims, and new home sales data all came in line with estimates. Of particular interest was the US GDP data which was revised higher to 3.9%, from 3.7% posting one of the strongest quarterly gains in the US economy over the year. The US Dollar, as noted in the weekly analysis as posted a bullish flag on the daily charts and an inverse head and shoulders pattern on the H4 chart thus indicating continued upside gains in the near term..
- Existing home sales 5.31mn vs. 5.50mn
- HPI m/m 0.6% vs. 0.4%
- Richmond manufacturing index -5 vs. 4
- Flash manufacturing PMI 53.0 vs. 53.3
- Core durable goods orders m/m 0.0% vs. 0.2%
- Durable goods orders m/m -2.0% vs. -2.0%
- Weekly unemployment claims 267k vs. 268k
- Fed Chair Yellen speaks
- Final GDP q/q 3.9% vs. 3.7%
- Final GDP price index q/q 2.1% vs. 2.1%