The Week That Was…
A key week for Forex markets with both the highly anticipated July NFP’s and Bank Of England “Super-Thursday” hitting the wires amidst thin holiday trading conditions.
- USD A very reactive week for USD flow with ISM Manufacturing missing on Monday but PCE beating. Comment’s from Fed’s Lockhart on Tuesday echoed the Fed’s nearness to raising rates sparking USD buying,we then saw ISM Non-Manufacturing beat on Wednesday Anticipation of a September rate-hike received further confirmation on Friday as July NFP’s came in at 215k. Though lower than the 223k expected, the figure was received as being strong enough certainly not to disrupt the Fed from lifting rates in September, though obviously not the bumper number USD bulls were hoping for. Unemployment came in as expected and focus will turn next to Retail sales and PPI data.
- EUR Feeling a bit like a ghost-town now that Greek related headlines aren’t flooding the wires. Trading is very much back to being based on USD flow and EURUSD saw a whipsawed week though ultimately continued traded lower with Friday’s US data lining up another run at 1.08 in the coming sessions.
- GBP UK bulls had been hoping for a further boost at this week’s BOE “Super-Thursday” however, they were ultimately left a little disappointed as the release struck a less hawkish tone. citing a “muted” inflation outlook. Governor Carney confirmed that the decision to raise rates will now take on a data-dependant basis focusing on wage growth, productivity & import figures which will create very volatile conditions around GBP data over the coming months. GBPUSD ends the down heading for rising trend line support around 1.54 against the July low.
- JPY Main event this week was the Bank Of Japan monetary policy report which saw the Central Bank again decided not to add further stimulus. Governor Kuroda is still confident in a rebound from economic soft-patch with recent weakness due to the slowdown in Chinese growth and high inventories adding that the central bank will be monitoring oil prices and the risk they pose to achieving their inflation target within the goal time-frame.
- AUD – Following last week striking new lows, AUD received some support this week as the RBA maintained rates on Monday with the accompanying release sounding slightly more positive about Australian economic conditions with the central bank feeling that the jobless rate has possibly peaked and will soon start falling. Post-NFP losses were quickly reversed with AUDUSD posting a second consecutive positive week.
- CAD – A soft week for the Canadian currency with oil prices continuing to decline alongside commodity markets. The unemployment rate came in unchanged on Friday which sparked fresh USDCAD buying against the US jobs data.