Intro
We've covered what's happening for the major currencies in the coming weeks. Read on to see what we are looking for.
Our Outlook
USD
While the dollar was selling at the beginning of last week, it didn’t continue as the week came to a close, with the USD being bought aggressively. Economic data from the US last week was mostly positive. The Durable Goods data came in at 3.4% vs the 1.1% forecast, on the other hand, the Non-Defense Capital Goods Orders had a reading of 0.5% vs the 0.7% forecast, which is a negative indicator for the dollar, and the GDP Data was neutral. It is being reported the President Biden has stated that now is the “time to act” on the proposed $1.9T stimulus package. The stimulus package helps American citizens by providing much needed financial support.
Events to watch out for in the coming week include the ISM Manufacturing PMI on Tuesday (02/03), the ADP Employment Change on Wednesday (03/03), the ISM Services PMI on Thursday (04/03) and the NFP and Fed Powell’s Speech on Friday (05/03).
One week forecast for the USD is bearish,
EUR
With no major economic data triggering any changes, the EUR traded mostly sideways last week. While there were no economic events that brought forth any data, ECB Stournaras called for a quicker bond-buying scheme, which is a positive indicator for the EUR. Continued recovery of Covid-19 and vaccination rollouts will be vital for the European economy in coming months.
A few events to watch out for in the coming week, these include ECB President Lagarde’s Speech and the CPI Data on Tuesday (02/03), and the Retail Sales Data on Thursday (04/03).
One week forecast for the EUR is bullish.
AUD
The AUD swayed last week as it had some upside early on, but then depreciated quickly towards the end of the week. The Australian economy is still mostly unaffected from Covid-19 across most sectors, and there were no major economic events to trigger any changes. It will be essential in the coming weeks to watch the unemployment data, as well as any updates with the Covid-19 vaccination rollout to form an AUD bias.
Events to watch out for in the coming week include the Rate Decision and Statement on Tuesday (02/03), the GDP Data on Wednesday (03/03), the Trade Balance Data and Retail Sales Data on Thursday (04/03).
One week forecast for the AUD is bullish.
GBP
The GBP remained strong in the last week, only swaying slightly towards the end of the week as the USD flows changed the market. Economic data for the GBP was also mostly positive, as the Claimant Count Change came in at -20K vs the 35K forecast, but the Unemployment Rate came in at consensus. The Covid-19 vaccination rollout continues to remain vital in recovering the UK economy, as well as the effectiveness of the vaccine against mutant variants.
There are no high impact events to watch out for in the coming week.
One week forecast for the GBP is bullish.
JPY
The JPY depreciated slightly in the last week but still had mid-strength towards the end of the week, still being an unattractive asset at the moment. In the last week, there was no high impact data from Japan. Recent findings have been reported of a Japanese Covid mutation variant. In addition to this, the BoJ still holds negative rates which continues to be a long term bearish indicator for the JPY.
There are no economic events impacting the JPY in the coming week.
One week forecast for the JPY is bearish.
CAD
The CAD had some good gains early last week, but that was erased as the week came to a close. Rising oil prices continue to support the CAD, as WTI contracts trade above the 60.0 level. The commodity based currency was negatively impacted by economic data out of Canada in recent weeks, however, the CAD is continuing to appreciate in the long term.
An event to watch out for in the coming week is the CAD GDP Data on Tuesday (02/03).
One week forecast for the CAD is bullish.
CHF
Trading mostly sideways in the last week, the CHF still received some positive data as the GDP came in at 0.3% vs the 0% forecast which makes this another economic event with positive data from Switzerland. Although, despite the positive readings, the SNB continues to hold negative interest rates, which keeps the CHF’s performance at a weak level.
There are no high impact events for the CHF in the coming week.
One week forecast for the CHF is bearish.