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
Despite the fact that most economic data out of the US was positive last week, the USD was still one of the weaker major currencies. The USD 10-Year Note yields results jumped to 1.68% which is a positive reflection upon the US economy, indicating real time improvement. Investors are more likely to purchase assets such as equities or commodities when there is a positive economic environment, therefore the Fed increases Note yields in order to attract purchases which is normally USD bullish. Having better than forecasted results for both MoM and YoY figures was the Consumer Price Index ex Food & Energy data. Also, the Retail Sales MoM data was greatly positive as it jumped way above the forecasted value of 5.9% to 9.8% actual.
There are no high impact events to look out for in the coming week.
One week forecast for the USD is bullish.
EUR
The EUR appreciated across most major currencies within the last week. Most economic data out of the EU was positive, including the Retail Sales YoY data which had a forecasted value of -5.4% vs the -2.9% actual, and the MoM data also indicated a 3% growth. As expected, Germany’s Harmonised Index of Consumer Prices and the Eurozone’s Consumer Price Index data was unchanged, with the majority of the MoM data for Eurozone’s CPI remaining the same.
There are no high impact events to look out for in the coming week.
One week forecast for the EUR is bearish.
AUD
Supported to the upside by March’s positive employment data, the AUD was rallied in the last week. New jobs data had a forecasted value of 35K, however, the actual data was reported to be 70.7K. In addition to new jobs, the unemployment rate was forecasted as 5.7% but the actual was 5.6%. Although there was a contraction in full time employment, it was ignored by the markets. Full time employment decreased by 20.8K employees.
In the coming week, keep an eye on the RBA Meeting Minutes on Tuesday (20/4) and the Retail Sales Data on Wednesday (21/04).
One week forecast for the AUD is bullish.
GBP
As it appreciated across the board last week, the GBP was supported by mid-impact economic data. Industrial and Manufacturing Production MoM data was positive, with a reading of 1.3% vs the 0.5% forecast. This shows that the UK’s secondary sectors are in an improving environment. Other than that, there was no high impact data from the UK in the last week.
In the coming week, keep an eye out for the employment data released on Tuesday (20/4), CPI Data and BoE Governor Bailey’s Speech on Wednesday (21/04) and the Markit Services PMI on Friday (23/04).
One week forecast for the GBP is bearish.