Aussie, Pound and Euro Strengthened Against the USD (Weekly Review)

According to the results of the Reserve Bank of Australia Meeting held last week, the interest rate was left unchanged. Less “soft” than expected, the tone of the Rate Statement triggered taking profit on short positions in the AUD, and it ended the week with growth against the USD. This was also facilitated by the announcement of the resumption of trade negotiations between the United States and China, but without real progress, the risks of a resumption of the fall of the Aussi will remain.
Speculators also got rid of short positions in the GBP, which was triggered by the confrontation of opponents of Britain’s exit from the European Union without a deal with the new Prime Minister Boris Johnson, who stubbornly leads precisely to such a development of events. Despite political risks, the GBP was also able to close the trading week with growth, both against the USD and the EUR, but its position remains vulnerable.

The EUR also managed to win back some of the lost positions, but its success is not as impressive as the success of the British currency. Investors do not hurry with its purchases ahead of the European Central Bank Meeting that is to be held this week. The central bank is expected to resort to further measures to stimulate the Eurozone economy, which, theoretically, should provoke a fresh wave of the EUR sales, but bears should still be extremely careful, since there is a possibility of a buyback in the fall. Before the event, it is better not to take any action.

Schedule for this week:

Monday, September 9
08:30 GMT – United Kingdom. GDP (MoM) (Jul);
08:30 GMT - United Kingdom. Manufacturing Production;
08:30 GMT - United Kingdom. Industrial Production;
18:00 GMT - United Kingdom. British Parliament Vote on Brexit.

Tuesday, September 10
22:45 GMT – New Zealand. Electronic Card Retail Sales;
01:30 GMT - PRC. Consumer Price Index (CPI);
07:00 GMT - PRC. Foreign Direct Investments;
08:30 GMT - United Kingdom. ILO Unemployment Rate (3M) (Jul);
08:30 GMT - United Kingdom. Average Earnings ex Bonus;
12:55 GMT - USA. Redbook Index.

Wednesday, September 11
00:30 GMT - Australia. Westpac Consumer Confidence;
12:30 GMT - USA. Producer Price Index (PPI), excluding food and energy (YoY) (Aug).

Thursday, September 12
01:00 GMT - Australia. Inflation Expectations;
06:00 GMT - Germany. Harmonised Index of Consumer Prices (HICP);
09:00 GMT - Eurozone. Industrial Production;
11:45 GMT - Eurozone. Deposit Facility Rate;
12:30 GMT - Eurozone. European Central Bank Press Conference and Monetary Policy Statement;
12:30 GMT - USA. Consumer Price Index (CPI);
12:30 GMT – USA. Core Consumer Price Index (CPI);
12:30 GMT - USA. Initial Jobless Claims.

Friday, September 13
22:30 GMT - New Zealand. Business NZ Purchasing Managers Index (PMI);
09:00 GMT - Eurozone. Trade Balance;
12:30 GMT - USA. Retail Sales;
14:00 GMT - USA. Michigan Consumer Sentiment.

Author: Anthony Porter, IAFT Analyst