GBP and EUR Are Still Sold for USD (Weekly Review)

2019-06-18
Volatility in the foreign exchange market over the past week remained quite low. Macroeconomic calendar was not rich in important events that could provoke its surge, therefore, the main currency pairs were traded mostly in relatively narrow ranges, while the USD, despite weak labor market data, showed a positive attitude both paired with the euro and the British pound.

Along with political uncertainty in the UK due to Theresa May’s imminent resignation and the lingering risks of a chaotic exit from the European Union, the GBP position remains vulnerable, and its growth attempts are still used for sales. Thus, the GBP/USD is traded again near the 25th figure, the loss of which threatens to fall in the direction of the 24th. A meeting of the Bank of England will be held this week, and its results may affect the dynamics of the GBP.

The conflict situation between the government of Italy and the European Union, along with weak Eurozone macroeconomic statistics, help to maintain pressure on the EUR. Paired with the USD, it fell to the area of ​​the 12th figure, and its penetration will entail a further decline in the single currency. The results of the FOMC meeting may influence the USD dynamics and contribute to either breaking through the 12th figure or increasing in the direction of 1.1280-1.1300, but at this stage there are still no reasons for a trend reversal.

Schedule for this week:

Monday, June 17
08:00 GMT – United Kingdom. Inflation Report Hearings;
12:30 GMT - USA. NY Empire State Manufacturing Index;
18:30 GMT – Canada. Bank of Canada Governor Council Member Schembri Speaks.

Tuesday, June 18
01:30 GMT - Australia. Reserve Bank of Australia Meeting Minutes;
06:00 GMT - Germany. Producer Price Index (PPI);
09:00 GMT - Germany. ZEW Economic Sentiment;
09:00 GMT – Eurozone. Consumer Price Index (CPI);
09:00 GMT – Eurozone. Core Consumer Price Index (CPI);
12:30 GMT - USA. Building Permits;
12:30 GMT - USA. Housing Starts.

Wednesday, June 19
23:50 GMT – Japan. Trade Balance;
23:50 GMT - Japan. Import/Export;
08:30 GMT - United Kingdom. Core Consumer Price Index (CPI);
08:30 GMT - United Kingdom. Consumer Price Index (CPI);
08:30 GMT - United Kingdom. Producer Price Index (PPI);
12:30 GMT – Canada. Consumer Price Index (CPI);
12:30 GMT – Canada. Core Consumer Price Index (CPI);
18:00 GMT - USA. Fed Interest Rate Decision;
18:00 GMT - USA. Federal Open Market Committee (FOMC) Statement;
18:30 GMT - USA. Federal Open Market Committee (FOMC) Press Conference.

Thursday, June 20
22:45 GMT – New Zealand. GDP (QoQ) (Q1);
02:00 GMT - Japan. Bank of Japan (BOJ) Interest Rate Decision;
02:00 GMT - Japan. Bank of Japan (BOJ) Press Conference and Monetary Policy Statement;
04:30 GMT - Japan. Bank of Japan (BOJ) Press Conference;
08:30 GMT - United Kingdom. Retail Sales;
11:00 GMT – United Kingdom. Bank of England (BOE) Interest Rate Decision;
11:00 GMT - United Kingdom. Bank of England (BOE) Meeting Minutes;
12:30 GMT – Canada. ADP Nonfarm Employment Change (May);
12:30 GMT - USA. Initial Jobless Claims.

Friday, June 21
23:50 GMT - Japan. National Consumer Price Index (CPI);
07:30 GMT – Germany. Markit Manufacturing Purchasing Managers Index (PMI);
08:00 GMT - Eurozone. Markit Manufacturing Purchasing Managers Index (PMI);
08:30 GMT - United Kingdom. Public Sector Net Borrowing;
12:30 GMT - Canada. Retail Sales;
13:45 GMT - USA. Markit Manufacturing Purchasing Managers Index (PMI).

Author: Anthony Porter, IAFT Analyst

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