Currency Market Trend Analysis: August 15, 2017
By The Numbers: Your FX Week In Review
|Date||Releases / Holiday||Entity|
|August 15, 2017||GDP (Q2)||Germany|
|August 15, 2017||Retail Sales (Jul)||USA|
|August 15, 2017||Housing Market Index||USA|
|August 16, 2017||GDP (Q2)||EMU|
|August 16, 2017||Housing Starts (Jul)||USA|
|August 17, 2017||Wholesale Price Index (Jul)||Germany|
|August 17, 2017||Retail Sales (Jul)||UK|
|August 17, 2017||CPI (Jul)||EMU|
|August 17, 2017||Trade Balance (Jul)||EMU|
|August 17, 2017||ECB Monetary Policy Meeting Accounts||EMU|
|August 17, 2017||FOMC Member Kaplan Speech||USA|
|August 18, 2017||PPI (Jul)||Germany|
|August 18, 2017||CPI (Jul)||Canada|
Upcoming bank holidays and impactful report releases for select countries.
CAD/USD - Canadian Dollar
Opened last week at 0.7907 and closed at 0.7880.
The CAD fell 0.35% against the USD last week, consolidating some of its previous gains. This depreciation occurred amidst narrowing two-year US-Canadian swap rates. Oil prices and soft Canadian economic data have reigned in market expectations of BoC tightening. Market expectations currently favor an October rate hike. I am neutral on CAD/USD in the short term. USD weakness still offers support for the pair, and if US inflation figures do not improve, we could see a return to appreciation.
1. CPI (Jul): Friday, August 18.
GBP/USD - British Pound
Opened last week at 1.3037 and closed at 1.2988.
The Cable depreciated 0.38% last week, following weak economic data on both sides. US CPI grew less than expected, after missing the June market expectation by 0.2%. The weak inflation figures have reduced market expectations for US rate hikes. Despite the poor performance of the USD, the GBP has offered little incentive. The BoE has downgraded its recent projections, and signaled with its last vote that it is in no hurry to being monetary policy normalization. Brexit-driven uncertainty continues to weigh on the GBP. Without any upstart UK economic data, I don’t see factors in play that will break the current Cable deprecation. I am bearish on GBP/USD.
1. GDP (Q2): Tuesday, August 15.
2. Retail Sales (Jul): Thursday, August 17.
EUR/USD - European Union Euro
Opened last week at 1.1774 and closed at 1.1808.
Over the past week, the Euro kept its momentum, appreciating by 0.29% against the USD, despite weak European industrial production figures. These gains were driven by weak US inflation figures. This promised to be a busy week for EUR/USD trading, with a host of European data set to be released. The direction of the trading will likely depend upon the relative strength of the European GDP figures versus the US Retail sales, which are expected to improve over the previous month. I am neutral this week on the EUR/USD.
1. GDP (Germany, Q2): Tuesday, August 15.
2. GDP (EMU, Q2): Wednesday, August 16.
3. Wholesale Price Index (Germany, Jul): Thursday, August 17.
4. CPI (EMU, Jul): Thursday, August 17.
5. Trade Balance (EMU, Jul): Thursday, August 17.
6. ECB Monetary Policy Meetings Accounts (EMU, Jul): Thursday, August 17.
7. PPI (Germany, Jul): Friday, August 18.
Currency Exchange International (CXI) is a leading provider of foreign currency exchange services in North America for financial institutions, corporations and travelers. Products and services for international travelers include access to buy and sell more than 90 foreign currencies, multi-currency cash passports, traveler's cheques and gold bullion coins and bars. For financial institutions and corporations, our services include the exchange of foreign currencies, international wire transfers, global EFT, the purchase and sale of foreign bank drafts, international traveler's cheques, and foreign cheque clearing through the use of CXI's innovative CEIFX web-based FX software www.ceifx.com