This week sees three major central bank meetings
STERLING
GBP/USD reclaimed 1.32 mid-week, supported by stronger than expected UK data (mortgage approvals and CBI) and Prime Minister May’s decision to take control of Brexit negotiations. However, losses followed on Thursday after EU Brexit Minister Michel Barnier rejected a key aspect of the UK’s customs plan.
Investors are now eyeing Thursday’s Bank of England meeting where most economists expect an interest rate hike of 25 basis points, although Sterling may struggle to gain support due to the lack of expectations of another hike in the short term.
Data wise, manufacturing PMI is out Wednesday while services PMI follows on Friday.
US DOLLAR
The Dollar Index climbed to a one week high on Friday at 94.91 amid lofty expectations for US second-quarter GDP. The Greenback retreated however after it printed in line with expectations at +4.1%. The Dollar Index has inched lower this morning to 94.6 with investors now looking ahead to Wednesday’s FOMC policy decision where interest rates are widely expected to remain on hold.
On the data front, pending home sales are out later today, personal income/spending, PCE, Chicago PMI and consumer confidence follow tomorrow. Wednesday brings ISM manufacturing, factory orders on Thursday and payrolls on Friday
EURO
The Euro emerged as last week’s G10 underperformer on Thursday following the ECB policy announcement where President Mario Draghi reiterated their prior guidance that rates will remain on hold at least through the summer of next year.
EUR/USD touched a one-week low on Friday at 1.1620 but has begun this week with a modest bid, rising to a fresh high of 1.1675 in recent trade after the first German regional CPI’s surprised to the upside.
Still to come this week, Euro Zone CPI and GDP tomorrow, manufacturing PMI on Wednesday plus retail sales and service PMI on Friday.
JAPANESE YEN
The Japanese Yen firmed last week, boosted by speculation that the Bank of Japan could announce a hawkish policy tweak tomorrow.
Stronger than expected Tokyo CPI released on Friday also provided a lift to keep USD/JPY below 111 where the pair is just about holding above this morning.
Besides the BoJ decision we await industrial production tomorrow and household spending data while manufacturing PMI follows on Wednesday.
SWISS FRANC
The Swiss Franc touched its highest level versus the Euro since July 5th on Friday at 1.1567. Domestic impulses were limited meanwhile with only the ZEW survey which dropped to -4.0 from 8.0.
Data releases pick up this week with retail sales and PMI on Thursday followed by CPI on Friday.
AUSTRALIAN DOLLAR
Softer-than-expected CPI data released on Wednesday kept the Australian Dollar on the back foot last week while it was also reactive to some notable moves in the Chinese Yuan.
AUD/USD is little changed to start the week at around 9.5400 having hit a one week low on Friday at 9.5473.
Building approvals, manufacturing PMI and new home sales are out tomorrow while we await trade data on Thursday and retail sales on Friday.
CANADIAN DOLLAR
The Canadian Dollar hit a six-week high versus the US Dollar on Wednesday at 1.3023 and remained buoyant into the weekend on positive NAFTA developments – US Trade Rep Lighhthizer said on Thursday they are in the finishing stages of an agreement in principle on NAFTA.
Looking ahead, June GDP figures are out tomorrow, PMI on Wednesday and trade data on Friday.
NEW ZEALAND DOLLAR
The New Zealand Dollar hit a two week high versus the Greenback on Thursday at 0.6853 but pulled back after trade data and exports missed expectations.
ANZ confidence indicators and employment figures are out tomorrow.
SWEDISH KRONA
The Swedish Krone rallied in recent trade after Q2 GDP surprised to the upside with EUR/SEK falling to a three week low at 10.2313. It had dropped on Friday after retail sales fell short of expectations.
Still to come this week, manufacturing PMI on Wednesday and service PMI on Friday.
NORWEGIAN KRONE
There was not much for the Norwegian Krone to work with last week besides domestic macro data. Industrial confidence was slightly stronger than expected while the unemployment ticked up to 3.8% – both of which were largely ignored.
EUR/NOK hit a one week low on Friday at 9.5180 and has begun this week with a minor loss at around 9.5370. Looking ahead, manufacturing PMI data is out Wednesday while unemployment figures follow on Friday.
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