Weekly Market Watch

Released 22 June 2015 - Weekly Newsletter

Last week recap

Extended its gains last week despite the Greek drama entering its final phase and as the FOMC released a Statement that was perceived as dovish. The week began with the rate gaining after making its weekly low of 1.1188 on Monday after debt negotiations with Greece collapsed after only 45 minutes on Sunday. German Bundesbank President Weidmann said that if Greece failed to make payments it “would have consequences for Greece that are difficult to control.” For his part, ECB President Draghi said that, “The situation in Greece reminds us again that the Economic and Monetary Union is an unfinished construction as long as we do not have all tools in place to ensure that all euro area members are economically, fiscally and financially sufficiently resilient. To complete the Economic and Monetary Union, we need a quantum leap towards a stronger, more efficient institutional architecture.” The pair then lost ground on Tuesday after German ZEW Economic Sentiment printed at 31.5 compared to 37.5 expected, while EZ ZEW Economic Sentiment showed a reading of 53.7 versus 60.3 anticipated. Also, the European Court of Justice ruled that the ECB was within its constitutional rights to conduct its Outright Monetary Transactions (OMT) policy. U.S. data on Tuesday had Building Permits increase to +1.28M versus +1.11M expected, and Housing Starts, which came in at +1.04M versus +1.10M expected. On Wednesday, the rate resumed its rally after the FOMC Statement indicated that September was still the target for the beginning of a cycle of rate increases, but that they would be gradual. Also, the FOMC Economic Projections lowered their forecast for interest rates in 2016 to 1.625% from 1.875% and from 3.125% to 2.875% in 2017. In her statement at the press conference, Fed Chair Yellen said that, “The Committee continues to judge that the first increase in the federal funds rate will be appropriate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term. At our meeting that ended today, the Committee concluded that these conditions have not yet been achieved.” The pair then made its weekly high of 1.1435 on Thursday after the ECB’s Targeted LTRO loaned €73.8B to EZ banks compared to €60.8B expected, while at the Eurogroup Meetings, Christine Lagarde, head of the IMF said in reference to the Greek situation, “We can only arrive at a resolution if there is a dialogue. Right now we’re short of a dialogue.” U.S. economic numbers on Thursday had CPI increase +0.4% m/m compared to +0.5% expected, while Core CPI increased only +0.1% versus +0.2% anticipated. Also out was the Philly Fed Manufacturing Index, which printed 15.2, significantly higher than the 8.1 print that was expected. The rate declined on Friday as no solution to the Greek debt situation was achieved at the ECOFIN Meetings in Brussels. EUR/USD went on to close at 1.1346, with an overall gain of +0.7% from its previous weekly close.
Extended its previous week’s losses last week as the BOJ left Monetary Policy unchanged while the FOMC issued a dovish Statement. The week began with the rate gaining a fraction on Monday despite mostly lower than expected U.S. economic data. The pair then consolidated on Tuesday after mixed U.S. housing data and the Japanese Trade Balance, which showed a deficit of -0.18T compared to -0.17T expected. On Wednesday, the rate gained a fraction after making its weekly high of 124.43 as the FOMC left rates unchanged and issued a dovish Statement. The pair then lost ground on Thursday after disappointing U.S. CPI data and positive U.S. manufacturing and employment numbers. Friday saw the rate continue south after the BOJ Monetary Policy Statement left monetary policy unchanged with an interest rate close to zero and ¥80T in annual monetary base expansion. After the meeting, BOJ Governor Kuroda said that, “so far a weakening of the yen won’t be an obstacle to the flexibility of monetary policy.” Adding that, “monetary policy is only targeting price stability.” USD/JPY closed at 122.68, with a loss of -0.6% for the week.
Continued its rally last week as both countries reported mixed economic numbers and the Fed released a dovish FOMC Statement. Cable began the week gaining after making its weekly low of 1.5486 on Monday after lower than expected U.S. manufacturing and Industrial Production numbers. The pair extended its gains on Tuesday after UK CPI increased +0.1% y/y as was widely anticipated. Also, UK RPI increased +1.0% versus +1.1% expected and PPI Input, which declined -0.9%, notably lower than the expected increase of +0.7%. On Wednesday, Cable gained sharply after a dovish FOMC Statement and the BOE’s MPC Meeting Minutes, which showed a unanimous decision by members on leaving both Bank Rate and the Asset Purchase Facility unchanged. Also out was UK Claimant Count Change, which showed a decline of -6.5K versus -12.5K expected, while the UK Average Earnings Index increased +2.7% 3m/y compared to +2.5% anticipated. The rate then made its weekly high of 1.5929 on Thursday after UK Retail Sales increased +0.2% m/m compared to an expected flat reading. Cable then consolidated at a slightly lower level on Thursday as traders squared positions and despite UK Public Sector Net Borrowing, which came out at +9.4B compared to an expected +10.1B with the previous number downwardly revised from +6.0B to +5.5B. GBP/USD closed at 1.5872, with a gain of +2.0% overall for the week.
Extended its previous week’s gains last week as the RBA’s Monetary Policy Meeting Minutes said members deemed it appropriate to leave rates unchanged and the FOMC Statement showed a dovish bias. The rate began the week gaining on Monday after RBA Assistant Governor Kent said that, “Monetary policy is clearly working to support demand, although it is working against some strong headwinds. These include the significant decline in mining investment, fiscal consolidation at state and federal levels and the exchange rate, which continues to offer less assistance than would normally be expected in achieving balanced growth in the economy.” The pair then lost ground on Tuesday after the RBA’s Monetary Policy Meeting Minutes noted that, “The exchange rate was close to the lowest levels seen earlier in the year, but members noted that the current level of the exchange rate, particularly on a trade-weighted basis, continued to offer less assistance than would normally be expected in achieving balanced growth in the economy. A further depreciation therefore seemed both likely and necessary, particularly given the significant declines in commodity prices over the past year.” The pair then gained a fraction after making its weekly low of 0.7642 on Wednesday after the FOMC Statement showed members were still concerned over the strength of the U.S. economy. The rate then made its weekly high of 0.7848 on Thursday after lower than expected U.S. CPI numbers. The pair then declined on Friday as traders squared positions bringing AUD/USD to close at 0.7769, with a gain of +0.6% from its previous weekly close.
Continued its decline last week as asset flows favoured the Loonie over the Greenback with mixed economic numbers out of both countries. The rate began the week making its weekly high of 1.2359 on Monday after Canadian Manufacturing Sales declined -2.1% m/m versus -1.3% expected. The pair then lost ground on Tuesday after Canadian Foreign Securities Purchases came out at +12.94B, significantly higher than the expected increase of +5.03B. The rate continued heading south on Wednesday after Canadian Wholesale Sales increased +1.9% m/m compared to +0.3% expected, while the dovish FOMC Statement also put pressure on the Greenback. The pair then made its weekly low of 1.2126 on Thursday after disappointing U.S. CPI numbers. The rate then recovered somewhat on Friday after Canadian Core Retail Sales declined -0.6% m/m compared to an expected increase of +0.3%, while Retail Sales declined -0.1% versus an expected increase of +0.7%, also out were Canadian Core CPI, which increased +0.4% m/m versus +0.3% expected and CPI, which increased +0.6% m/m versus +0.4% expected. USD/CAD went on to close at 1.2270, with an overall loss of -0.3% for the week.
Continued selling off last week as New Zealand reported a lower than expected GDP number and despite a dovish FOMC Statement. The week began with the rate gaining a fraction on Monday after lower than expected U.S. economic data. The pair then declined a fraction on Tuesday after the New Zealand GDT Price Index declined -1.3% versus a previous decline of -4.3%, while the NZ Current Account showed a surplus of +0.66B compared to an expected surplus of +0.27B. The rate then made both its weekly high of 0.7009 and its weekly low of 0.6877 on Wednesday after the FOMC issued a dovish Statement and New Zealand GDP came out with an increase of +0.2% q/q compared to +0.6% expected. The pair continued southbound on Thursday after mixed U.S. economic data. The rate then lost a fraction on Friday in the absence of any significant data out of either country. NZD/USD went on to close at 0.6906, with an overall weekly decline of -1.1%.

The week ahead

AUD The Australian economic calendar is very quiet this coming week, only featuring HPI data (2.2%) on Tuesday. Resistance for AUD/USD is seen at 0.7785/92, 0.7818/0.7937 and 0.8024/74, with support noted at 0.7597/0.7682 and 0.7532/59.

CAD The Canadian economic calendar is inactive this coming week, only featuring a speech by Governing Council Member Schembri on Thursday. Resistance for USD/CAD is seen at 1.2387/1.2409, 1.2537/1.2562 and 1.2645/65, while support shows at 1.2304, 1.2255 and 1.2102/1.2203.

EUR The Eurozone economic calendar is busy this coming week, featuring the Euro Summit and Europgroup Meetings on Monday, which start the week’s highlights. Tuesday’s key events then include French Flash Manufacturing PMI (50.1), French Flash Services PMI (52.5), German Flash Manufacturing PMI (51.5), German Flash Services PMI (52.9), EZ Flash Manufacturing PMI (52.0), and EZ Flash Services PMI (53.7), while Wednesday offers the German Ifo Business Climate survey (108.2). Thursday then features the GfK German Consumer Climate survey (10.1), and Friday’s important data then concludes the week with the EZ M3 Money Supply (5.4%) and Private Loans (0.2%). Resistance for EUR/USD is seen at 1.1466, 1.1379/91 and 1.1289, with support showing at 1.1207, 1.1035/1.1150 and 1.0818/99.

GBP The UK economic calendar is unusually inactive this coming week, only featuring a speech by MPC Member Cunliffe on Monday and a speech by BOE Governor Carney on Friday. Resistance to the topside for GBP/USD shows at 1.5597, 1.5697 and 1.5814, while support for the pair is expected at 1.5222/68, 1.5315/51 and 1.5446/1.5551.

JPY The Japanese economic calendar is fairly quiet this coming week, only featuring the BOJ’s Monetary Policy Meeting Minutes on Wednesday, and then Household Spending (3.5%) and Tokyo Core CPI (0.1%) on Friday. Resistance for USD/JPY currently shows up at 125.05, 124.14/45 and 123.85, with support indicated at 122.45, 122.02 and 120.47/84.

NZD The New Zealand economic calendar is also peaceful this coming week, only featuring the Trade Balance (-50M) on Thursday. The chart for NZD/USD shows resistance at 0.7273/80, 0.7076/0.7186 and 0.7022. On the downside, technical support is expected at 0.6941, 0.6639/81 and 0.6557/71.

USD The U.S. economic calendar is quite active this coming week, featuring Final GDP data on Wednesday. Monday starts the week’s highlights off with Existing Home Sales (5.27M), and Tuesday’s key events include a speech by FOMC Member Powell, Core Durable Goods Orders (0.6%), Durable Goods Orders (-0.6%), Flash Manufacturing PMI (54.2), and New Home Sales (524K). Wednesday then offers Final GDP (-0.2%) and Crude Oil Inventories (last -2.7M), while Thursday features Weekly Initial Jobless Claims (271K), the Core PCE Price Index (0.1%), and Personal Spending (0.7%). Friday’s important data then concludes the week with the Revised University of Michigan Consumer Sentiment survey (94.6).


Currency Converter

Market Rate For information purposes only. Terms of Use
For details, see My Dashboard

For OzForex’s customer rate
Log In or Register Now
Rate: 0.6950
=
Rate: 1.4388
=
Convert

Free Registration

International money transfers at better rates than the banks.


Currency News



RSS Follow Facebook Twitter Follow on LinkedIn Follow on YouTube

Rate Alerts

/
 
Choose currency pair and enter the exchange rate. An alert will be triggered when the exchange rate is reached and an email will be sent to you. You can unsubscribe any time and your email address is safe – see our Privacy Policy.

NOTE: These rates are for informational purposes only

Sitemap

IMPORTANT: This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Limited ABN 65 092 375 703 (trading as “OFX”) and its subsidiaries make no recommendations as to the merits of any financial product referred to in the website, email or its related websites. Please read our Product Disclosure Statement and our Financial Services Guide.
DISCLAIMER: OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this website. Read full disclaimer.   OFX provides international money transfer services to private clients and business customers. Use our free currency converter, exchange rate charts, economic calendar, in-depth currency news and updates and benefit from competitive exchange rates and outstanding customer service.

OFX is regulated in Australia by ASIC (AFS Licence number 226 484)

Read our Money Laundering Statement and Privacy Policy.