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Monday, July 31, 2017

Currency Market Trend Analysis: July 31, 2017

Currency Market Trend Analysis: July 31, 2017
Source: CXI International Payments Team

 

 

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By The Numbers: Your FX Week In Review

 
 
Foreign currency value versus USD is decreasing
 
Foreign currency value versus USD is increasing

*Indicators show the percent change over the past week.

Currency Calendar

Date Releases / Holiday Entity
July 31, 2017 CPI (Jul) EMU
July 31, 2017 Unemployment Rate (Jun) EMU
August 1, 2017 Unemployment Rate (Jul) Germany
August 1, 2017 Markit Manufacturing PMI EMU
August 1, 2017 GDP (Q2) EMU
August 1, 2017 Markit Manufacturing PMI USA
August 2, 2017 ECB Non-Monetary Policy Meeting EMU
August 3, 2017 BoE Interest Rate Decision UK
August 3, 2017 BoE’s Governor Carney Speech UK
August 4, 2017 Unemployment Rate (Jul) USA
August 4, 2017 Unemployment Rate (Jul) Canada

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

CAD/USD - Canadian Dollar

The CAD opened last week at 0.7976 and closed at 0.8040. 

The CAD traded up 0.81% against the USD, after consolidating some of the previous weeks’ gains. This appreciation comes off of higher than expected Canadian May GDP figures (0.6% vs. 0.2%) and continued political uncertainty in the United States. This appreciation was also supported by rising crude oil prices. Weak US personal consumption data has reduced expectations for US rate hikes in the near-term. This has spurred trading against the USD in the options markets, exacerbating recent downwards pressure. 

This will be a data-light week for the CAD. The CAD may currently be overbought, but the price momentum is still strong. Some consolidation is likely, but the CAD may continue to trade higher throughout the week.

 

1. Unemployment Rate (Jul): Friday, August 4.

 

 

GBP/USD - British Pound

The GBP opened last week at 1.2994 and closed at 1.3124.

The GBP appreciated 1.00% against the USD over the past week, recovering its losses from the preceding week. This recovery was largely supported by politics and data driven USD weakness, rather than positive UK economic data.  

Data-wise, the week is quiet until Thursday, which will see an interest rate decision and speech by Governor Carney. It is expected that the BOE will not increase rates. The cable is likely to appreciate throughout the week, though to a lesser extent than last week. Better-than-expected US unemployment and Markit PMI data could upset this trend. 

 

1. BoE Interest Rate Decision: Thursday, August 3.

2. BoE Governor Carney Speech: Thursday, August 3.

 

 

EUR/USD - European Union Euro

The Euro opened last week at 1.1663 and closed at 1.1756.

Over the past week, the Euro appreciated by 0.80% against the USD, amid US political uncertainty, and mixed European data. This marks the first close above 1.17 since Jan 2015. Eurozone core annual inflation is estimated to have grown by 1.2% in July, above expectations, while unemployment fell to 9.1%, below the 9.2% expectation. This week may see some consolidation, dependent upon Wednesday’s ECB policy meeting, as well as Markit PMI data. The Euro is straying into overbought territory, but its momentum is holding steady. 

 

1. CPI (EMU, Jul): Monday, July 31.

2. Unemployment Rate (EMU, Jun): Monday, July 31.

3. Unemployment Rate (Germany, Jul)Tuesday, August 1.

4. Markit Manufacturing PMI (EMU, Jul): Tuesday, August 1.

5. GDP (EMU, Q2): Tuesday, August 1.

6. ECB Non-Monetary Policy Meeting (EMU): Wednesday, August 2.

 


 

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About the Author

Collin McAliley

 Collin McAliley - Financial Analyst

Collin educates corporate clients on foreign currency markets lending industry best practices that enhance client knowledge and create specialized solutions that fit each business. Interested in having a custom international payments strategy or foreign exchange risk plan?

 

 


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