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Currency Market Trend Analysis: January 22, 2018

Ryan January 22nd, 2018
Currency Market Trend Analysis: January 22, 2018



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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  
January 22, 2018 Eurogroup Meeting EMU
January 22, 2018 Chicago Fed National Activity Index (Dec) USA
January 23, 2018 Public Sector Net Borrowing (Dec) UK
January 23, 2018 ZEW Survey – Current Situation/Economic Sentiment (Jan) EMU
January 24, 2018 Markit PMI Composite/Manufacturing (Jan) EMU, USA
January 24, 2018 Claimant Count Change/Rate (Dec) UK
January 24, 2018 ILO Unemployment Rate (Dec) UK
January 24, 2018 Average Earnings (Dec) UK
January 24, 2018 Housing Price Index (Nov) USA
January 25, 2018 EcoFin Meeting EMU
January 25, 2018 Gfk Consumer Confidence Survey (Feb) Germany
January 25, 2018 ECB Monetary Policy Statement and Press Conference EMU
January 25, 2018 ECB Interest/Deposit Rate Decision EMU
January 25, 2018 Retail Sales (Nov) Canada
January 26, 2018 GDP (Q4) USA, UK
January 26, 2018 BoC CPI (Dec) Canada

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

CAD/USD - Canadian Dollar

CAD/USD opened last week at 0.8029 and closed at 0.8008 – depreciating by 0.27% despite the BoC’s rate hike, likely due to a fall in West Texas Intermediate (WTI).

The BoC hiked rates by 25 basis points this past Wednesday, reaching an overnight rate of 1.25%. Market response was muted, as a 90% rate hike chance had already been priced in. The rate hike was accompanied by upwards revisions to 2018 and 2019 GDP growth targets. Despite revised projections, rate hike expectations have maintained at 60 basis points of tightening for the remainder of the year.  

The commodity-linked Lonnie reversed its gains at the week’s end, as WTI fell 1%. WTI’s depreciation came as OPEC revised its non-OPEC oil production projections upwards, and Russian Economy Minister Maxim Oreshkin stated that oil prices were unlikely to exceed $60/barrel in the medium-term.

This week’s movements will depend upon any developments regarding the future of NAFTA, as well as the Canadian retail sales and CPI.


1. Retail Sales (Nov): Thursday, January 25th     

2. BoC CPI (Dec): Friday, January 26th



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GBP/USD - British Pound

GBP/USD opened last week at 1.3727 and closed at 1.3855 – appreciating by 0.94% despite middling UK data, as markets reacted to the US government shutdown.

The Sterling had a rough start to the week, with the UK’s largest construction and services company, Carillon, going into liquidity. UK data was mixed, with CPI pulling back to 3% (back within the BoE acceptable 2% +/- 1% range), and QoQ GDP growth measuring 0.4%. The UK forecasts 2018 GDP growth of 1.6%, and has revised their 2019 projections downwards to 1.4%. The Pound was put under further pressure as retail values missed the mark, coming in at -1/5% MoM against an expectation of -0.6%, and 1.4% annualized against an expectation of 3.0%.

UK politics lent some support this week. Reports emerged that EU negotiators were given more specific terms that will complicate talks. Political uncertainty lightened later in the week, with French President Macron stating that the UK trade deal should be somewhere between the current full access and a simple trade accord.

The economic calendar is busy for the UK this week. The Q4 GDP will be in particular focus, especially after the lackluster December sales data.


1. Public Sector Net Borrowing (Dec): Tuesday, January 23rd      

2. Claimant Count Change (Dec): Wednesday, January 24th

3. ILO Unemployment Rate (Dec): Wednesday, January 24th

4. Average Earnings (Dec): Wednesday, January 24th

4. GDP (Q4): Friday, January 26th



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EUR/USD - European Central Bank Euro

EUR/USD opened last week at 1.2201 and closed at 1.2223 – appreciating by 0.18% as the USD came under government shutdown-induced selling pressure, and Germany’s Social Democrats Party (SPD) voted in favor of a grand coalition.

The common currency faltered early in the week under reports that the SPD rejected coalition talks with Merkel’s CDU/CSU. On Sunday however, it was announced that the SPD had voted in favor of forming a grand coalition. This is a major step forward for German politics, and political stability within the European Union.

This week will see many economic releases for the EMU. Special attention will be paid to the policy meeting on 25th, with many looking for forward guidance on a rollback of the ECB’s QE program.


1. Eurogroup Meeting (Jan, EMU): Monday, January 22nd        

2. ZEW Survey – Current Situation/Economic Sentiment (Jan, EMU): Tuesday, January 23rd        

3. Markit PMI Composite/Services (Jan, Germany): Wednesday, January 24th          

4. EcoFin Meeting (Jan, EMU): Thursday, January 25th  

5. Gfk Consumer Confidence Survey (Feb, Germany): Thursday, January 25th         

6. ECB Monetary Policy Statement and Press Conference (Jan, EMU): Thursday, January 25th   

7. ECB Interest Rate Decision (Feb, Germany): Thursday, January 25th        



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About the Author

Collin McAliley

 Collin McAliley - Business Operations 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? Request A Call

Written with assistance from Christopher Griffith - Junior Data Analyst

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