The Forex Week Ahead

The Forex Week Ahead: June 13th – June 18th

Sun: CNY – New Yuan Loans, FDO, Aggregate Financing
Mon: CNY – Industrial Production, Retail Sales
Tue: GBP – CPI , EUR – EZ Industrial Production, USD – Advance Retail Sales,
Wed: GBP – Unemployment Rate, Average Weekly Earnings, NZD – Dairy Auctions, USD – Industrial Production, Manufacturing Production, FOMC Rate Decision, NZD – GDP
Thu: JPY – BOJ Rate Decision, AUD – Unemployment Rate, CHF – SNB Summer Economic Forecasts & Rate Decision, EUR – ECB Economic Bulletin, EZ CPI, GBP – BOE Rate Decision, USD – CPI, Real Average Weekly Earnings
Fri: CAD – CPI

Overview

USD The US Dollar remains under pressure ahead of the June FOMC meeting with the disappointingly low May Non-Farm Payrolls print causing a sharp downshift in US rate hike expectations. Fed Chair Yellen removed the reference to the “coming months” in her recent comments regarding the US rate path. Traders now await the June FOMC meeting with bulls hoping for a clear sign that July/August remain strong contenders.
EUR ECB’s Nowotny said the environment of extremely low interest rates is not the norm, that inflation should be a lot better in 2017, and that he does not expect the oil price to weaken significantly again. Markets remain directionless about Euro due to the uncertainty stemming from the Brexit issue. On the data front, 1Q EuroZone GDP YoY was 1.7% after seasonal adjustments, better than the markets’ forecast 1.5%
GBP Despite having spiked over 180 pips higher in less than a minute on, reportedly due to a “fat finger” trade, Sterling sunk to a three-week low on Monday after two online surveys gave the “Leave” campaign a 4 percent lead. The Brexit storm continues to take priority over economic data which was much stronger than expected, with industrial production rising 2.0% m/m.
JPY The Japanese Yen gained after mixed current account and GDP data which suggested the economy expanded at an expected growth pace, while the current account surplus came in narrower than expected.The government is asking lenders about the possibility of submitting tender offers with negative rates at the ministry’s short-term special accounts borrowing program auctions, according to people with direct knowledge of the matter said. BOJ come into focus this week with traders eager to hear the latest from the bank given recent JOY strength.
AUD The Reserve Bank of Australia kept interest rates on hold at its Jun meeting and implied it was in no hurry to ease monetary policy further on signs of reasonably strong economic growth.The AUDUSD was the biggest gainer among major currencies, hitting its highest since 6 May. The RBA kept the cash rate at a record low 1.75%, after cutting last month for the first time in one year.
CAD The Canadian Dollar strengthened to a one-month high against the USD after oil prices climbed above $50 a barrel. The loonie’s gains came after Federal Reserve Chair Janet Yellen on Monday called the latest US jobs numbers disappointing and didn’t repeat her recent message that rates could rise again in the coming months.