Currency Report
Hello all. Here is the currency report for the upcoming week.
The minutes of the G7 meeting will be coming out soon, however, as of this writing, I have no knowlege of how it went.
However, here are the week's expectations. As of Saturday, it is expected for the currency pairs of EUR/USD, EUR/AUD and AUD/NZD to range trade (EUR=Euro, AUD=Australian Dollar and NZD=New Zealand Dollar). In the case of EUR/USD, it will fluctuate between the rate of 1.3050 and 1.2875. The EUR/AUD has a range from 1.6885 to 1.6555 and the AUD/NZD will trade between 1.146 and 1.1285. In this particular type of market, it is important to place a sell order once the pair has reached the top of the range and place a buy order once it has reached the lower end. The only risk you face is if the price breaks out of the range and begins to create a trend.
It is expected by the U.S. central bank that inflation will be within the 2% comfort zone, however, they are watching to make sure that should this become uncomfortably higher, that a rate hike would be in the works. This has helped the dollar some, however, since Susan Byes, one of the hawkish board members has left her position at the central bank, we may see a change in attitude.
If you have been keeping on track with the rates, you will also notice that the Euro dollar is quite high. This has led to some poor economic releases, namely that their trade balance has tipped towards favoring more imports. Imports have grown at 10% while exports from France have only increased 8.6%. Coupled with their banks decision to keep rates steady and the unsurprising results in industrial growth in France and Italy, this may cause a weakness in the Euro in the coming week. It is to be noted however, that a rate hike is in the works, which may prop the Euro some more.
Data coming from England, showing that there is little growth or sign of inflation has also led to some weakness in this currency. Their trade deficit came in a 7.1 billion pounds, which was higher than the expected 6.87 billion pounds. Though this is seen as slightly unreliable, the real direction of the pound, at least for the short term, will be provided by the retail sales report and consumer prices report later on during the week.
Lastly, the recent increase in oil should be watched carefully. Oil traded above $60 on the NYMEX and may be on the rise. Should this happen, it should be expected that currencies such as the US dollar and Japanese yen may weaken, due to their negative correlation with this commodity, while the Euro and Canadian dollars will strengthen due to their positive correllation.
All in all, I will be keeping watch and keeping you posted on what is available. In the meantime, always look at your charts and make sure you analyze properly before taking any positions.
The minutes of the G7 meeting will be coming out soon, however, as of this writing, I have no knowlege of how it went.
However, here are the week's expectations. As of Saturday, it is expected for the currency pairs of EUR/USD, EUR/AUD and AUD/NZD to range trade (EUR=Euro, AUD=Australian Dollar and NZD=New Zealand Dollar). In the case of EUR/USD, it will fluctuate between the rate of 1.3050 and 1.2875. The EUR/AUD has a range from 1.6885 to 1.6555 and the AUD/NZD will trade between 1.146 and 1.1285. In this particular type of market, it is important to place a sell order once the pair has reached the top of the range and place a buy order once it has reached the lower end. The only risk you face is if the price breaks out of the range and begins to create a trend.
It is expected by the U.S. central bank that inflation will be within the 2% comfort zone, however, they are watching to make sure that should this become uncomfortably higher, that a rate hike would be in the works. This has helped the dollar some, however, since Susan Byes, one of the hawkish board members has left her position at the central bank, we may see a change in attitude.
If you have been keeping on track with the rates, you will also notice that the Euro dollar is quite high. This has led to some poor economic releases, namely that their trade balance has tipped towards favoring more imports. Imports have grown at 10% while exports from France have only increased 8.6%. Coupled with their banks decision to keep rates steady and the unsurprising results in industrial growth in France and Italy, this may cause a weakness in the Euro in the coming week. It is to be noted however, that a rate hike is in the works, which may prop the Euro some more.
Data coming from England, showing that there is little growth or sign of inflation has also led to some weakness in this currency. Their trade deficit came in a 7.1 billion pounds, which was higher than the expected 6.87 billion pounds. Though this is seen as slightly unreliable, the real direction of the pound, at least for the short term, will be provided by the retail sales report and consumer prices report later on during the week.
Lastly, the recent increase in oil should be watched carefully. Oil traded above $60 on the NYMEX and may be on the rise. Should this happen, it should be expected that currencies such as the US dollar and Japanese yen may weaken, due to their negative correlation with this commodity, while the Euro and Canadian dollars will strengthen due to their positive correllation.
All in all, I will be keeping watch and keeping you posted on what is available. In the meantime, always look at your charts and make sure you analyze properly before taking any positions.
posted by Ian Bellamy at
5:30 PM
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