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Tuesday, August 15, 2017

Currency Market Trend Analysis: August 15, 2017

Currency Market Trend Analysis: August 15, 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
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.

Market Analysis

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.

 


 

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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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