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Monday, May 7, 2018

Currency Market Trend Analysis: May 7, 2018

Currency Market Trend Analysis: May 7, 2018
Source: CXI International Payments Team

 

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  
May 7, 2018 Sentix Investor Confidence EUR
May 7, 2018 BoC Gov Council Member Lane Speech CAD
May 8, 2018 Housing Starts CAD
May 9, 2018 RIC Housing Price Balance GBP
May 10, 2018 Manufacturing Production MoM/YoY GBP
May 10, 2018 Total Trade Balance GBP
May 10, 2018 BoE Interest Rate Decision GBP
May 10, 2018 New Housing Price Index MoM/YoY CAD
May 10, 2018 BoC Review CAD
May 11, 2018 Consumer Price Index MoM/YoY EUR
May 11, 2018 Unemployment Rate CAD

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

Canadian Dollar

CAD/USD opened last week at 0.7798 and closed at 0.7785 – depreciating by 0.17% due to mixed USD data and anticipations rising for housing data and employment rates in Canada.

First thing on officials and traders mind is the NAFTA agreement. There still hasn’t been enough progress to sign a deal. With Mexico’s elections underway we may see some headway after. But for now, a break seems more likely until they the election is final.

In Canada the housing sector has been getting more and more attention especially with how Toronto’s market has been. Housing starts are expected to decline while building permits are expected to increase and help the recovery of the housing market. On Thursday a better picture will be painted on how this is going to affect the CAD.

All eyes and ears will be on Lane’s speech on Monday. This speech should give insight on the rest of the data to be coming out of Canada this week.

 

1. BoC Gov Council Member Lane Speech: Monday, May 7th

2. Housing Starts: Tuesday, May 8th

3. New Housing Price Index MoM/YoY: Thursday, May 10th

4. BoC Review: Thursday, May 10th

5. Unemployment Rate: Friday, May 11th


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British Pound

GBP/USD opened last week at 1.3775 and closed at 1.3530 – depreciating by 1.78% due to looming rate hike in the horizon.

With disappointing UK macroeconomic indicators, it has brought the GBP down along with the looming possibility of a rate hike on Thursday by the Bank of England. Also on the other side of the pond the US Federal Reserve has confirmed that inflation indices are nearing their targeted levels and their monetary policy are normalizing.

Also in the UK Home Secretary Rudd stepped down in light of the immigration scandal. Also with him stepping down, Sajid Javid replaced him. This has shifted the IK government and now there is another Brexit hardliner in the midst.

 

1. RIC Housing Price Balance: Wednesday, May 9th

2. Manufacturing Production MoM/YoY: Thursday, May 10th

3. Total Trade Balance: Thursday, May 10th

4. BoE Interest Rate Decision: Thursday, May 10th


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European Central Bank Euro

EUR/USD opened last week at 1.2132 and closed at 1.1965 – depreciating by 1.38% due to falling manufacturing numbers.

With negative news coming out of the EU has caused the EUR to decline against the USD. The Ireland boarder is still a big topic for the Brexit negotiations. No outcome has been made in that front and with a shift in the UK government might cause a longer Brexit probational period. This has caused investors to remain cautious with the EUR.

News coming out of the EU this week a quite but the investor confidence report coming out on Monday and more data coming from Germany, and the CPI on Friday, will guide the direction of the EUR.

 

1. Sentix Investor Confidence: Monday, May 7rd

2. Consumer Price Index MoM/YoY: Friday, May 11th


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About the Author

Remon Shehata - Data Analyst

Remon 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? Request A Call


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