Currency Market Trend Analysis: May 7, 2018

Ryan May 7th, 2018

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 7^th

2. Housing Starts: Tuesday, May 8^th

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

4. BoC Review: Thursday, May 10^th

5. Unemployment Rate: Friday, May 11^th

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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 9^th

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

3. Total Trade Balance: Thursday, May 10^th

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

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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 7^rd

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

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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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