Currency Market Trend Analysis: July 24, 2017
By The Numbers: Your FX Week In Review
|Date||Releases / Holiday||Entity|
|July 24, 2017||PMI (Jul)||EMU|
|July 24, 2017||PMI (Jul)||USA|
|July 25, 2017||IFO Business Climate Report (Jul)||Germany|
|July 25, 2017||Housing Price Index (May)||USA|
|July 26, 2017||GDP (Q2)||UK|
|July 26, 2017||Fed’s Monetary Policy Statement||USA|
|July 26, 2017||Fed’s Interest Rate Decision||USA|
|July 27, 2017||Gfk Consumer Confidence Report (Jul)||Germany|
|July 28, 2017||CPI (Jul)||France|
|July 28, 2017||CPI (Jul)||Germany|
|July 28, 2017||Economic Statement Indicator (Jul)||EMU|
|July 28, 2017||GDP (Q2)||USA|
|July 28, 2017||GDP (May)||Canada|
Upcoming bank holidays and impactful report releases for select countries.
CAD/USD - Canadian Dollar
The CAD opened last week at 0.7908 and closed at 0.7971.
The CAD appreciated by 0.80% against the USD last week. This appreciation was largely due to politics-led weakness in the USD, coupled with middling Q2 data, and worries that the Fed may not raise rates in December. Investor sentiment in the CAD was boosted further by the BoC interest rate bump, and higher-than-expected Canadian retail sales. The CAD is approaching the psychological support level of 0.8 – increasing the possibility that last weeks’ rapid appreciation will taper.
The CAD is likely to appreciate further against the USD this week, though to a lesser extent that last week. This appreciation could be slowed, or potentially reversed, if US housing data comes back stronger than expected.
1. GDP (May): Friday July 28.
GBP/USD - British Pound
The GBP opened last week at 1.3096 and closed at 1.2966.
The GBP depreciated 0.99% against the USD over the past week. This deprecation was softened by a weak dollar – the IMF downgraded its growth forecast for the US this past week (2017: 2.3% -> 2.1%, 2018: 2.5% -> 2.1%) due to lowered expectations for effective US expansionary policy.
Expect minimal exchange rates movements throughout the week, with the biggest potential upset coming Wednesday with the release of UK Q2 GDP figures.
1. GDP (Q2): Wednesday July 26.
EUR/USD - European Union Euro
The Euro opened last week at 1.1465 and closed at 1.1656.
Over the past week, the Euro appreciated by 1.66% against the USD, with the US dollar index hitting its lowest point since late June 2016. These gains were driven by politics-induced weakness in the USD, combined with expectations of ECB QE tapering in the near future. The ECB has given no indications that it is worried about the strength of the Euro, or the current state of inflation. Last weeks’ gains partially reversed this morning, in response to weaker-than-expected European PMI’s.
Expect slight appreciation, dependent upon European CPI and sentiment indicators to be released this week.
1. PMI (EMU, Jun): Monday July 24.
2. IFO Business Climate Report (Germany, Jul): Thursday July 25.
3. Gfk Consumer Confidence Report (Germany, Jul): Thursday July 27.
4. CPI (France, Jul): Friday July 28.
5. CPI (Germany, Jul): Friday July 28.
6. Economic Sentiment Indicator (EMU, Jul): Friday July 28.
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