The USD Was Declining Last Week (Weekly Review)

The USD bulls took a break last week. The bulls on some of the USD competitors took advantage of the situation, and tried to win back some of the losses. Thus, the EUR, GBP, CHF, AUD, and NZD were able to bounce off their current lows and test rather strong resistance levels, while their movements were not remarkable in scale.

Thus, the EUR was able to rise to the level of 1.1769, and the GBP - to 1.2978, where it faced a strong barrier of offers that pushed the currencies back to supports at 1.1700 and 1.2820, respectively. The downturns still show demand, but the threat of chaotic Brexit carries risks for both the GBP and the EUR, so bulls should still be extremely careful.

The increased appetite for risk contributed to the growth of stock indices, as well as the strengthening of the Aussie and the Kiwi. They are also supported by optimism regarding the growth rates of the PRC economy. The US labor market data released on Friday turned out to be strong enough to stop the growth of the USD competitors, but it could not stimulate steady demand for the USD. In the short term, the major pairs may consolidate in ranges, breaking through which is possible if fresh market drivers appear.

Schedule for this week:

Monday, October 5
09:00 GMT - Eurozone. Retail Sales;
13:45 GMT - USA. Markit Composite Purchasing Managers Index (PMI);
14:00 GMT - USA. ISM Services Purchasing Managers Index (PMI).

Tuesday, October 6
00:30 GMT - Australia. Trade Balance;
03:30 GMT - Australia. Reserve Bank of Australia (RBA) Interest Rate Decision;
03:30 GMT - Australia. Reserve Bank of Australia (RBA) Rate Statement;
12:30 GMT - USA. Trade Balance;
13:00 GMT - Eurozone. ECB President Lagarde Speaks;
14:40 GMT - USA. Federal Reserve Chair Jerome Powell Speaks.

Wednesday, October 7
06:00 GMT - Germany. Industrial Production;
12:10 GMT - Eurozone. ECB President Lagarde Speaks;
18:00 GMT - USA. Federal Open Market Committee (FOMC) Meeting Minutes.

Thursday, October 8
06:00 GMT - Germany. Trade Balance;
09:30 GMT - Switzerland. Swiss National Bank Chairman Thomas Jordan Speaks;
12:30 GMT - Canada. BoC Gov Council Member Macklem Speaks;
12:30 GMT - USA. Initial Jobless Claims.

Friday, October 9
01:45 GMT - PRC. Caixin Services Purchasing Managers Index (PMI);
06:00 GMT - United Kingdom. GDP;
06:00 GMT - United Kingdom. Industrial Production;
06:00 GMT - United Kingdom. Manufacturing Production;
12:30 GMT - Canada. Employment Change;
12:30 GMT - Canada. Unemployment Rate.

Author: Anthony Porter, IAFT Analyst