The Week Ahead in FX
Start your trading prep with a quick review of last week’s forex action from my buddy Pip Diddy, an overview of catalysts lined up for the major currencies, and the charts to watch this week.
A mix of risk aversion on the stock selloff plus positive PMI readings lifted the Greenback against most of its peers last week, except against its lower-yielding rival, the Japanese yen.
This week ain’t exactly filled to the brim with top-tier reports, although we’ve got the CPI and retail sales figures due. Other than that, investor sentiment and volatility could push dollar pairs around.
Loonie pairs had some trouble establishing a clear direction in the previous week, as the Canadian currency barely took cues from crude oil and sentiment.
The next few days might be more or less the same as there are no major reports from Canada. The only things to look out for are its version of the ADP jobs report, manufacturing sales, and foreign securities purchases.
EUR & CHF
The shared currency was one of the weaker performers in the previous week as it barely drew support from news that Germany finally sealed the deal on a coalition.
The lack of potential market-moving data this week could keep investors focused on German coalition updates, especially since the parties have yet to vote on whether or not to accept the deal towards the end of the month.
Upgraded economic forecasts? Check! Stronger rate hike expectations? Check again! None of these were enough to buoy sterling higher last week, though.
A couple of top-tier reports, namely CPI and retail sales, are on this week’s docket and these might underscore hawkish BOE prospects and keep the pound supported.