Euro Finishes Week With Reinforcement in Pair With USD (Weekly Review)

Macroeconomic calendar of the previous week was filled with important events, but activity of currency market participants was quite low. Even approaching of start date of increased US import taxes for some goods from China couldn’t reanimate them, and Chinese government promised to respond in the same way. It is fair to say that on 4th of July American trading platforms weren’t operational due to Independence Day celebration, but when its operation was restarted volatility stayed low.

Inspired by progress of Angela Merkel in solving problems connected with unauthorized immigration, wild-catters were buying out Euro, thanks to it, Euro managed to recover against USD up to the barrier of 1.1760. Except that, it got support from anonymous sources from European Central Bank, which gave the hope on the beginning of tightening of monetary policy this fall. Nevertheless, interest rate differential and expectations of next rises of interest rate by Federal Reserve in this year in no case justify purchase of Euro/USD, so the bulls should exercise extreme caution.

US statistic data issued on previous week generally was positive for USD, which, besides, failed to continue its rise against JPY. Sales on trading platforms on the background of started by US trade wars motivated for JPY purchase, but downfall of indexes turned out non-continuous, and soon it showed positive dynamic, but even it could not bring USD/JPY back to 111 figure and aid it’s piercing. It creates risks of huge correctional decreasing, herewith; JPY bulls should be insured from losses, because interest rates differential also falls short sales of USD in pair with it.

This week’s agenda:

Monday, 9th of July
13:00 GMT - Eurozone. Speech of ECB President Draghi;
13:10 GMT - USA. Speech of the Fed representative Kashkari;
19:00 GMT - USA. Dynamic of consumer crediting capacity (May).

Tuesday, 10th of June
01:30 GMT - PRC. CPI;
01:30 GMT - PRC. PPI;
08:30 GMT - UK. GDP (m/m) (May);
08:30 GMT - UK. Manufacturing in processing sector;
08:30 GMT - UK. Manufacturing output;
09:00 GMT - Germany. Assessment index of current economic conditions by ZEW Institute;
12:15 GMT - Canada. Premises building starts;
12:55 GMT - USA. Retail sales index of Redbook.

Wednesday, 11th of July
00:30 GMT - Australia. Consumer confidence index of Westpac;
00:30 GMT - Australia. Mortgage loans;
12:30 GMT - USA. PPI;
14:00 GMT - Canada. The Bank of Canada resolution on interest rate;
14:00 GMT - Canada. Covering announcement of the Bank of Canada;
15:00 GMT - Canada. Report of Committee on Monetary Policy of the Bank of Canada;
15:15 GMT - Canada. Press-conference of the Bank of Canada;
15:35 GMT - UK. Speech of Mark Carney, the Governor of the Bank of England.

Thursday, 12th of July
23:50 GMT - Japan. Foreign investments in Japanese shares;
23:50 GMT - Japan. Investments in foreign bonds;
01:00 GMT - Australia. Expectations on consumer-price inflation;
02:15 GMT - PRC. Foreign direct investments;
06:00 GMT - Germany. HCPI;
06:00 GMT - Germany. CPI;
09:00 GMT - Eurozone. Industrial output;
12:30 GMT - USA. Basic applications for dole;
12:30 GMT - USA. CPI
12:30 GMT - USA. Core CPI;
16:15 GMT - USA. Speech of Federal Open Market Committee member, Patrick Harker.

Friday, 13th of July
02:00 GMT - PRC. GDP;
02:00 GMT - PRC. Trade balance;
02:00 GMT - PRC. Import/Export;
14:00 GMT - USA. Consumer confidence index of the University of Michigan;
15:00 GMT - USA. Fed report on monetary policy.

Author: Anthony Porter, IAFT Analyst