The USD Won Back Some Losses By the End of the Week (Weekly Review)

2020-08-05
The USD was highly unlikely to close the week with a fall, but, as we warned, its oversold, along with the strong overbought of a number of competitors, including the EUR and CHF, contributed to profit-taking on short positions. This allowed the USD to win back some of the lost positions by the end of the week, although there is no reason to speak about the return of favor from the market participants.

Encouraged by an assertion by EU aid fund leaders, the EUR was targeted to rise to a strong psychological level of 1.2000, but weak Eurozone GDP data cooled bulls' fervor, reminding them of the vulnerability of European economies amid the coronavirus pandemic. Thus, along with profit-taking on longs, the EUR was forced to retreat to the support of 1.1769, near which the week was closed.

The GBP, in its turn, also showed positive dynamics, completely ignoring the lack of a trade deal between the UK and the European Union, as well as the negative impact of the coronavirus on the British economy. But, as we warned, along with these factors, it remains vulnerable, and without fresh positive news, its further growth is unlikely. The EUR prospects look more optimistic, but it will also need fresh drivers for further growth.

Schedule for this week:

Monday, August 3
08:30 GMT - United Kingdom. Markit Manufacturing Purchasing Managers Index (PMI);
14:00 GMT - USA. ISM Manufacturing Purchasing Managers Index (PMI).

Tuesday, August 4
23:30 GMT - Japan. Tokyo Consumer Price Index (CPI);
00:30 GMT - Australia. Retail Sales;
01:30 GMT - Australia. Trade Balance;
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Interest Rate Decision;
13:30 GMT - Canada. Manufacturing Purchasing Managers Index (PMI);
14:00 GMT - USA. Factory Orders.

Wednesday, August 5
22:45 GMT - New Zealand. Unemployment Rate;
22:45 GMT - New Zealand. Employment Change;
01:45 GMT - PRC. Caixin Services Purchasing Managers Index (PMI);
07:55 GMT - Germany. Markit Composite Purchasing Managers Index (PMI);
08:00 GMT - Eurozone. Markit Composite Manufacturing Purchasing Managers Index (PMI);
09:00 GMT - Eurozone. Retail Sales;
12:15 GMT - USA. ADP Nonfarm Employment Change;
12:30 GMT - USA. Trade Balance;
14:00 GMT - USA. ISM Services Purchasing Managers Index (PMI).

Thursday, August 6
03:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Inflation Expectations (QoQ) (Q3);
06:00 GMT - United Kingdom. Bank of England (BOE) Interest Rate Decision;
06:00 GMT - United Kingdom. Bank of England (BOE) Meeting Minutes;
06:00 GMT - United Kingdom. Bank of England (BOE) Monetary Policy Report;
12:30 GMT - USA. Initial Jobless Claims.

Friday, August 7
01:30 GMT - Australia. Reserve Bank of Australia Monetary Policy Statement;
02:00 GMT - PRC. Trade Balance;
06:00 GMT - Germany. Trade Balance;
06:00 GMT - Germany. Industrial Production;
12:30 GMT - Canada. Unemployment Rate;
12:30 GMT - Canada. Employment Change;
12:30 GMT - USA. Nonfarm Payrolls;
12:30 GMT - USA. Unemployment Rate;
12:30 GMT - USA. Average Hourly Earnings;
15:00 GMT - Canada. Ivey Purchasing Managers Index (PMI).

Author: Anthony Porter, IAFT Analyst

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