USD Closed the Week With Decrease (Weekly Review)

2019-05-06
After the Easter holidays, the volatility in the foreign exchange market remained low last week. Eurozone's GDP data released on Tuesday somewhat exceeded analysts' forecasts, and it was a stimulus for continued profit taking on EUR short positions, along with the resistance broken in the 1.1200 area, paired with the USD and tested at 1.1263. However, this data was obviously not enough to reverse the trend, and the pair soon again found itself below the 12th figure, risking a return to the lows of the week. 

Following the meeting of the Bank of England, the interest rate was left unchanged, which fully corresponded to analysts' forecasts. The increase in the Central bank’s forecast for the UK economic growth rate was offset by the impossibility of raising the rate in the face of continuing uncertainty around Brexit. Nevertheless, by the end of the week, speculators continued liquidating profits on shorts in the GBP and managed to end the week with growth against a number of their competitors, while lowering the 32nd figure the downside risks will remain.

Also, in full accordance with analysts' forecasts, the Federal Committee on Open Market Operations of the US Federal Reserve left rates at the same level, and in the comments it was noted that at this stage there is no reason to either raise or lower it. The latter fact was positively assessed by market participants, but the dollar could not develop the upward trend. This was not even facilitated by a strong NFP report, since wage data turned out to be rather weak. Nevertheless, there is no reason for large-scale USD sales at this stage.

Schedule for this week:

Monday, May 6
09:00 GMT - Eurozone. Retail Sales;
13:30 GMT - USA. FOMC Member Patrick Harker Speaks;
17:45 GMT - Canada. Bank of Canada Governor Stephen Poloz Speaks.

Tuesday, May 7
01:30 GMT - Australia. Trade Balance;
01:30 GMT - Australia. Import/Export;
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Interest Rate Decision;
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Rate Statement;
06:00 GMT - Germany. Industrial Orders;
07:30 GMT – United Kingdom. Halifax House Price Index;
12:55 GMT - USA. Redbook Index;
14:00 GMT - Canada. Ivey Purchasing Managers Index (PMI);
20:00 GMT – New Zealand. Monetary Policy Report.

Wednesday, May 8
23:50 GMT - Japan. Bank of Japan Monetary Policy Meeting Minutes;
02:00 GMT - PRC. Trade Balance;
02:00 GMT - PRC. Import/Export;
02:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Interest Rate Decision;
02:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Rate Statement;
03:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Press Conference;
05:45 GMT - Switzerland. Unemployment Rate;
06:00 GMT - Germany. Industrial Production.

Thursday, May 9
01:30 GMT - PRC. Producer Price Index (PPI);
12:00 GMT – United Kingdom. NIESR GDP Estimate;
12:30 GMT - USA. Initial Jobless Claims;
12:30 GMT - USA. Trade Balance;
12:30 GMT - USA. Producer Price Index (PPI) excluding fresh food and energy carriers.

Friday, May 10
21:30 GMT – New Zealand. Manufacturing Purchasing Managers Index (PMI);
22:45 GMT - New Zealand. Electronic Card Retail Sales;
23:50 GMT - Japan. Foreign Investments in Japanese Stocks;
01:30 GMT - Australia. Reserve Bank of Australia Monetary Policy Statement;
06:00 GMT - Germany. Trade Balance;
08:30 GMT – United Kingdom. GDP;
08:30 GMT - United Kingdom. Industrial Production;
08:30 GMT - United Kingdom. Manufacturing Production;
12:30 GMT - Canada. Employment Change;
12:30 GMT - Canada. Unemployment Rate;
12:30 GMT - Canada. Average Hourly Earnings;
12:30 GMT - USA. Consumer Price Index (CPI);
12:30 GMT - USA. Core Consumer Price Index (CPI).

Author: Anthony Porter, IAFT Analyst

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