Weekly FX Forecast, AUD, GBP, USD, CAD, EUR, NZD

30 January 2017 by News Desk   |   SHARE  

The currency market is in for another interesting week as controversial politics take centre stage which could cause notable exchange rate movements, say financial market specialists FC Exchange.

AUD

Reserve Bank of Australia (RBA) Deputy Governor, Guy Debelle, is talking in Sydney on Monday and it’s possible his comments could cause AUD movement. Tuesday’s Pacific trading will see the publication of the Australian NAB business confidence number, as well as the Australian Industry Group (AiG) manufacturing index; both are expected to be moderately influential for the market.

Investors in the Aussie dollar will also look towards Wednesday’s Chinese manufacturing purchasing managers index (PMI) as China is Australia’s largest trading partner. Australian trade balance and building approvals stats are out on Thursday alongside the AIG performance of service index. Friday will finish up the week with the Chinese Caixin manufacturing PMI. As global political events sweep across the globe, both the Aussie and the Kiwi dollars may find themselves softer as risk appetite weakens.

NZD

The start of the week saw the Kiwi dollar register some gains against other majors after the New Zealand trade deficit narrowed. The December figure published at -41m and beat the -98m forecast. December’s number also and bettered the November reading of -746m. Despite 2016’s trade values being lower than 2015, there was a record number of meat exports which is good news for the New Zealand economy.

Tuesday will be a big day for the New Zealand dollar with the release of the New Zealand unemployment rate and employment change numbers. If the unemployment rate shrinks from 4.9% to 4.8% as forecast, the Kiwi dollar might be given another reason to take some ground.

GBP

The pound could be in for a relatively subdued week in terms of movement from economic data with only moderately influential pieces hitting the market. UK consumer confidence will be released on Tuesday, along with mortgage approvals data, followed by Markit’s UK manufacturing PMI and Nationwide house prices on Wednesday.

Thursday will see the publication of Markit’s UK construction PMI and the Bank of England (BoE) rate decision and inflation report. However, an event that could cause movement will be BoE Governor Mark Carney speaking at a press conference shortly after the inflation report is released. Central bank comments could cause the GBP/AUD exchange rate to move significantly.

Ongoing Brexit negotiations and political developments could also cause the pound to swing and are likely to be the main catalyst for sterling fluctuations in the near future.

EUR

The Eurozone has a fair amount of high-profile data for release at the start of the week which will begin with the German consumer price index (CPI) figures on Monday. Inflation on the year is forecast to rise from 1.7% to 2.0%, whereas the month alone is expected to contract by -0.5%. Tuesday will continue the spate of German ecostats with unemployment change and unemployment rate numbers for January and retail sales figures for December. Also out on Tuesday is the Eurozone’s gross domestic product (GDP) figures which are expected to remain at 1.7% on the year in Q4, and the Eurozone inflation figures estimates.

European Central Bank (ECB) president Mario Draghi is also expected to speak in Frankfurt on Tuesday which could be another cause for single currency movement.

USD

The US dollar is in for yet another interesting week, mainly because US politics are causing a stir. President Trump has created a travel ban for seven predominantly Muslim countries which has resulted in uproar, protests, global planned marches and financial fluctuations as the markets attempt to digest the developments. While the White House has been on the defence hailing the policy a ‘massive success’, petitions claiming over a million signatures have surfaced in the UK to ban Trump from entering for a state visit later in the year.

The ban was partially halted by a federal judge in New York meaning authorities couldn’t remove individuals who had arrived in airports across the United States after the order was issued. Additionally, Iraq has threatened a ban of it’s own on US citizens in protest.

In terms of data, US personal consumption expenditure and pending home sales are due to be released in Monday’s stateside session, followed by consumer confidence on Tuesday, ISM manufacturing on Wednesday, and an exciting day of data on Friday including change in non-farm payrolls, unemployment rate, and the ISM non-manufacturing composite.

CAD

Canada has a few upcoming data releases that could cause the Loonie to shift this week. Tuesday will see the release of Canadian GDP ecostats; the annual November figure is expected to decline marginally from 1.5% to 1.4% which could cause CAD exchange rate losses.

Markit’s Canadian manufacturing PMi is due out on Wednesday which ties up the week for Canadian data and leaves the Loonie open to market developments and oil price changes.

Meanwhile in Canada, six people have been killed and another eight injured after a shooting occurred in a mosque in Quebec on Sunday night. Events such as these can cause the markets to move on account of risk aversion, and the Loonie softened in Asian trading against a host of other majors, before beginning to recover in the European session.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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