The Forex Week In Review

The Week That Was

A key week for Forex markets comes to a close with little in the way of positives. The FOMC minutes failed to produce clear signals about a September rate-hike with many officials still feeling that conditions for a rate-hike were not yet met and in the wake of the minutes release, traders have begun further pricing out of a September lift-off.

The continued deterioration in the Chinese economic situation has increased concerns over global stability this week, driving heavy risk-off flows. USD was broadly down whilst EUR actually benefited from it’s current inverse correlation with risk assets.


  • USD Traders were in wait and see mode heading into the FOMC minutes but ultimately were left disappointed as the minutes failed to produce clear signals that a September lift-off is in store. The Dollar sold off as rate-hike expectations were pushed out amid growing concern over China and a miss on the manufacturing PMI on Friday compounded the heavy tone to the week.
  • EUR A tri-fecta of aspects created a stronger week for the single currency. The approval of the Greek bailout program in Greek parliament added support. Volatility in global stock markets on the back of the deteriorating situation in China has seen the continued unwinding of EUR hedges as European equity markets sell off, supporting the Euro which also benefited from broad USD weakness.
  • GBP The positive CPI print early in the week spurred aggressive demand in Sterling as traders see encouraging signs of the UK moving nearer to a rate increase, however the Chinese induced equity volatility saw GBP weaken later in the week, though remained supported against USD.
  • JPY Dovish FOMC and global equity market volatility saw increased JPY safe haven demand with USDJPY sharply down on the week. A move below 120 could invite comments from officials.
  • AUD Global risk-off sentiment on the back of the situation in China weakened AUD further this week as concerns grow over Asian FX depreciation. Remained range-bound against USD in light of broad USD weakness.
  • CAD The continued weakness in Oil prices weighed heavily on the Canadian currency this week which was net weaker against USD. Friday’s in-line CPI print did little to offer to support