Key Events This Week: August 10th – 14th
USD: Retail Sales – Thursday
EUR: ECB Monetary Policy Meeting Accounts – Thursday, CPI GDP -Friday
Overview
USD – The initial upside reaction we saw on the back of Friday’s NFP release eventually receded and USD ended the week back below the July high. The jobs report though strong enough to be seen as posing no risk to the Fed raising rates in September, was not the bumper print bulls were hoping for and focus now turns to retail sales with a strong number needed to boost conviction in the bull camp, a weak print will muddy the USD trading outlook for the rest of August.
EUR – Feeling a bit like a ghost-town now that Greek related headlines aren’t flooding the wires. Trading is very much back to being based on USD flow and EUR/USD saw a whipsawed week with Friday eventually reversing all post NFP losses. Price still pressured against that 1.08 support level. CPI & GDP data data provide key focus this week.
GBP – UK bulls had been hoping for a further boost at last week’s BOE “Super-Thursday” however, they were ultimately left a little disappointed as the release struck a less hawkish tone citing a “muted” inflation outlook. Governor Carney confirmed that the decision to raise rates will now take on a data-dependant basis focusing on wage growth, productivity & import figures which will create very volatile conditions around GBP data over the coming months. GBP/USD ends the down heading for rising trend line support around 1.54 against the July low. Earnings data will be closely watched this week following Carney’s comments.
JPY – Main event last week was the Bank Of Japan monetary policy report which saw the Central Bank again decided not to add further stimulus. Governor Kuroda is still confident in a rebound from economic soft-patch with recent weakness due to the slowdown in Chinese growth and high inventories adding that the central bank will be monitoring oil prices and the risk they pose to achieving their inflation target within the goal time-frame.
AUD – Following last week striking new lows, AUD received some support this week as the RBA maintained rates on Monday with the accompanying release sounding slightly more positive about Australian economic conditions with the central bank feeling that the jobless rate has possibly peaked and will soon start falling. Post-NFP losses were quickly reversed with AUD/USD posting a second consecutive positive week. RBA deputy Governor Lowe speaks on Wednesday.
CAD – A soft week last week for the Canadian currency with oil prices continuing to decline alongside commodity markets. The unemployment rate came in unchanged on Friday which sparked fresh USD/CAD buying against the US jobs data. Housing starts on Monday the only domestic data, flow expected to be mainly driven by USD, oil and commodity prices.