The Forex Week Ahead

The Forex Week Ahead: November 14th – 18th

Sun: JPY – GDP
Mon: CNY – Industrial Production, Retail Sales, EUR – EuroZone Retail Sales
Tue: NZD – Dairy Auctions, AUD – RBA Meeting Minutes, EUR – German GDP, German ZEW Surveys, EuroZone GDP, GBP – CPI , USD – Retail Sales,
Wed: GBP Average Weekly Earnings, ILO Unemployment Rate, USD – Industrial Production, Manufacturing Production
Thu: AUD – Unemployment Rate, EUR – EuroZone CPI, USD – CPI
Fri: CAD – CPI

Overview

USD Despite initial weakness, USD gained in response to the election of Donald Trump as President. The prospect of increased consumer spending, lower corporate taxes and a more friendly business environment should support a positive shift in the economic outlook among firms. With risk sentiment responding positively, fed rate hike expectations for December remain intact.

EUR The Euro fell in response to the US Presidential result as risk sentiment surged. On the release front, German Industrial Production disappointed the markets with a decline of 1.8 percent, well short of the forecast of -0.4 percent. While Germany’s surplus narrowed to EUR 21.3 billion, missing the forecast of EUR 23.4 billion

GBP On the release front, German Industrial Production disappointed the markets with a decline of 1.8 percent, well short of the forecast of -0.4 percent. While Germany’s surplus narrowed to EUR 21.3 billion, missing the forecast of EUR 23.4 billion. Business sentiment recovered from post-referendum fall but remained relatively fragile alongside significant uncertainty around the longer-term outlook, Bank of England said. The central bank also commented that investment intentions indicate “broadly stable or slightly lower” spending in the coming year.

JPY Survey by eco watchers showed that Japanese households and businesses were expecting economic momentum to pick up steam. The gauge of expectation in the next few months climbed from 48.5 in September to 49.0 in October. On a separate survey, households were the most optimistic about current economic situation since January. The index climbed from 44.8 in September to 46.2 in October despite broadly subdued growth.

AUD The Aussie weakened sharply in response to the US election result suffering its biggest daily loss since June 24th. On the data front Australia’s Westpac consumer confidence index dropped to 101.3 in November (October: 102.4). The survey showed that households anticipated economic conditions to worsen in 5 years.

CAD Structural weaknesses are weighing heavily on Canada’s export sector but an improved mix of fiscal and monetary policy release some pressure off the central bank to stimulate demand, a senior Bank of Canada official said. The Canadian Dollar trimmed losses after hitting an eight-month low against the US dollar as Republican Donald Trump’s election to the White House raised worries about the outlook for Canada’s trade-intensive economy.

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