The Forex Week In Review

The Week That Was…

The tone of this week was one of anticipation going into the FOMC and then ultimately one of mild disappointment following the meeting. The Fed appeased USD bulls just enough by reiterating that a September rate hike remains a possibility but ultimately the picture was no clearer than it was last time around. As ever, the move will be data dependant and next Friday’s Jobs report will be key focus and likely determine USD direction for August.

Month end flows and a big miss on Q2 employent costs saw USD sharply weaker on Friday, retracing most of the week’s gains in what felt a lot like an inevitable rotation amidst the current direction-less Forex environment.


  • USD – Fed delivered a fairly balanced FOMC statement citing encouraging improvements in the labour markets, with the need for some further improvement to come before an increase in rates. Risks to the Fed policy forecast still remain with falling energy and commodity prices weighing on inflation. Friday’s Q2 employment costs data saw a big miss sending USD down from the weekly highs.
  • EUR – A mixed week for the single currency. Met headwind supply into the 1.1130 area before recovering from the post FOMC low of 1.0890. Positive CPI data encouraged further buying on Friday which compounded the strength seen against USD weakness taking price back up to the weekly highs.
  • GBP – The main story of the week for Sterling was Tuesday’s GDP print with quite a few players whispering of a softer number. However, the data came in in-line as expected and spurred GBP buying as bulls find the data supportive heading into next week’s BOE meeting. Price held the ascending trendline from the yearly low and is currently challenging stubborn resistance at the 1.5670/90 area.
  • JPY – Main focus this week was the CPI print on Thursday evening. With the BOJ having recently refrained from further easing, the positive CPI print will support an extension of this stance barring a shock to inflation.
  • AUD – A flat week for the Aussie which found some shallow strength on the rebound in Chinese equity markets and oil prices before rolling over again. Weak US data on Friday added help with USD weakness though ¬†price is still heavy going into next week’s RBA meeting.
  • CAD – Oil price uncertainty continues to weigh on the Canadian currency and with employment data upcoming, it is possible that we start to see some of the secondary effects of the lower oil price on the Canadian economy.

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