Weekly Forex Wrap Up: 30/10, 2015

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Euro banknotes

AUDUSD (0.70): The Australian dollar turned out weak losing -1.67% at the time of writing, trading near a 3-week low at 0.709.  Quarterly inflation remained weak, rising 0.5% on the headline and 0.3% on the core, missing estimates on both ends. Home sales data managed to decline -4.0% which is likely to ease pressure on the RBA next week. However, producer price index increased 0.9% for the quarter indicating a possible rise in inflation in the coming quarter.

  • CPI q/q 0.5% vs. 0.7%; Trimmed mean CPI q/q 0.3% vs. 0.5%
  • HIA New home sales m/m -4.0% vs. 2.3% previously
  • Import prices q/q 1.4% vs. 1.6%
  • PPI q/q 0.9% vs. 0.3%
  • Private sector credit m/m 0.8% vs. 0.5%

EURUSD (1.10): The Single currency is currently trading at 1.101 after prices touched a new low at 1.091 earlier this week led by a hawkish FOMC statement. Eurozone’s CPI estimates released on Friday saw the region’s inflation remain subdued albeit headline inflation managed to rise 1.0% beating estimates of 0.9%. However, that was not enough for the Euro which remained under pressure. Other economic releases from Eurozone this week included the German import prices which declined -0.7%, more than expected. Other CPI flash estimates from Spain, Italy and Germany came out mixed.

  • German Ifo business climate 108.2 vs. 108.1
  • M3 Money supply y/y 4.9% vs. 5.0%
  • Private loans y/y 1.1% vs. 1.1%
  • German import prices m/m -0.7% vs. -0.2%
  • Gfk German consumer climate 9.4 vs. 9.5
  • Germany preliminary CPI m/m 0.0% vs. -0.1%
  • Spain flash CPI y/y -0.7% vs. -0.6%
  • Germany retail sales m/m 0.0% vs. 0.4%
  • Spain flash GDP q/q 0.8% vs. 0.9%
  • Eurozone CPI flash estimate y/y 0.0% vs. 0.0%; Core CPI y/y 1.0% vs. 0.9%
  • Eurozone unemployment rate 10.8% vs. 11.0%
  • Italy preliminary CPI m/m 0.2% vs. 0.1%

NZDUSD (0.67): The Kiwi was trading flat for the most part after prices briefly touched the lows of 0.6634 on the FOMC decision. The Reserve Bank of New Zealand met this week but refrained from cutting rates while at the same time it signaled willingness to ease at future meetings. Building consents for the month fell -5.7% but business confidence improved to 10.5 largely on account of a weaker Kiwi.

  • Trade balance -122.2mn vs. -82.2mn
  • RBNZ keeps rates unchanged at 2.75%
  • Building consents m/m -5.7% vs. -5.3% previously
  • ANZ Business confidence 10.5 vs. -18.9

USDJPY (120.6): The Japanese Yen is looking stronger this week with USDJPY down -0.68% at the time of writing, trading near 120.65. The gains in the Yen came about as the much speculated BoJ monetary policy earlier today saw the Central bank keeping interest rates unchanged while also holding on to its QQE. USDJPY touched highs of 121.41 before giving back its gains. Other economic data from Japan included retail sales which fell -0.2% annualized while household spending also declined -0.4%.

  • SPPI y/y 0.6% vs. 0.6%
  • Retail sales y/y -0.2% vs. 0.4%
  • Prelim industrial production m/m 1.0% vs. -0.5%
  • Tokyo Core CPI y/y -0.2% vs. -0.2%
  • Household spending y/y -0.4% vs. 1.2%
  • National core CPI y/y -0.1% vs. -0.2%
  • Unemployment rate 3.4% vs. 3.4%
  • BoJ keeps monetary policy unchanged
  • Housing Starts y/y 2.6% vs. 6.5%

USDCAD (1.31): USDCAD remained choppy this week after prices topped out just a few points below 1.328. The Canadian dollar was well supported with rising Oil prices over the week and managed to hold ground despite a hawkish FOMC statement. However, the Loonie gave up some of the gains after the monthly GDP data showed a subdued growth of 0.1% for the month and 0.9% annualized.

  • RMPI m/m 3.0% vs. 1.2%
  • IPPI m/m -0.3% vs. -0.1%
  • GDP m/m 0.1% vs. 0.1%; GDP y/y 0.9% vs. 1.0%

GBPUSD (1.53): GBPUSD has managed to gain 0.25% at the time of writing with the Cable trading near 1.534 but prices were clearly struggling near resistance of 1.536. Economic data from the UK this week was light with the exception of the preliminary GDP numbers which increased 0.5% for the quarter, below estimates of 0.6%. The index of services was also modest, rising 0.9% below estimates of 1.0%. There wasn’t much to go about for the Cable this week as the currency pair posted a weekly low to 1.5245 before recovering some of the losses.

  • BBA Mortgage approvals 44.5k vs. 46.2k
  • CBI Industrial order expectations -18 vs. -8
  • Preliminary GDP q/q 0.5% vs. 0.6%
  • Index of services 3m/3m 0.9% vs. 1.0%
  • Nationwide HPI m/m 0.6% vs. 0.5%
  • Net lending to individuals 4.9bn vs. 4.4bn
  • M4 money supply m/m -1.0% vs. -0.2%
  • Mortgage approvals 69k vs. 73k
  • CBI realized sales 19 vs. 35
  • Gfk consumer confidence 2 vs. 4

USDCHF (0.97): USDCHF is up 1.1% for the week, after prices briefly touched 0.9944 this week. There was not much of data from Switzerland during the week with the exception of UBS consumption indicator which rose 1.65 and the KOF economic barometer which was soft at 99.81.

  • UBS Consumption indicator 1.65 vs. 1.64
  • KOF Economic barometer 99.81 vs. 100.1

US Dollar Index (97.08): The US Dollar Index is down -0.21% this week after prices retreated from the weekly highs of 98.20. Economic data from the US this week was a mixed bag. Durable goods orders continued to remain under pressure posting declines of -0.4% and -1.2% on the headline and core respectively. The FOMC statement was the main theme which lent support to the US Dollar, in what was considered as hawkish in light of the Fed keeping December rate hikes in play. The third quarter advanced GDP from the US saw the economy expanding at a pace of 1.5%, missing estimates of 1.6%. Core PCE price index was also weak, rising 0.1% and the employment cost index for the quarter rose by 0.1%.

  • New home sales 468k vs. 546k
  • Core durable goods orders m/m -0.4% vs. 0.0%; durable goods orders m/m -1.2% vs. -1.1%
  • S&P/CS HPI y/y 5.1% vs. 5.1%
  • Flash services PMI 54.4 vs. 55.3
  • Richmond manufacturing index -1 vs. -3
  • CB Consumer confidence 97.6 vs. 102.5
  • FOMC keeps rates unchanged
  • Advance GDP q/q 1.5% vs. 1.6%
  • Weekly unemployment claims 260k vs. 264k
  • Advance GDP price index q/q 1.2% vs. 1.5%
  • Pending home sales -2.3% vs. 1.1%
  • Employment cost index q/q 0.1% vs. 0.2%
  • Core PCE Price index m/m 0.1% vs. 0.2%
  • Personal spending m/m 0.1% vs. 0.2%
  • Personal income m/m 0.1% vs. 0.2%
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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.