Weekly Market Watch

Open the calendar

Released 30 January 2012

Last week recap

EUR/USD extended the previous week’s gains as the Fed announced in its latest FOMC meeting it would keep interest rates at historical lows till late 2014. The week began on a positive note, with the rate trading higher off of its weekly low of 1.2875 on Monday after a successful auction of German Treasury bills. The yield on the bills averaged 0.07%, compared to October’s auction which had a yield of 0.346%. The pair continued strengthening on Tuesday as Spain held a successful bond auction and following the release of positive EZ and German PMI data. German Flash Manufacturing PMI came out at 50.9, versus an expected 49.1, while German Services PMI printed at 54.5, versus 52.6 expected. EZ Flash Services PMI printed at 50.5, versus an expected 49.1, while EZ Flash Manufacturing PMI came out at 48.7, versus 47.4 expected. Weighing somewhat on the rate on Tuesday was the rejection of EU finance ministers to a proposed Greek swap deal. On Wednesday, the rate continued rallying after the Fed left the benchmark Fed Funds rate at 0-0.25%. In the accompanying statement, the FOMC confirmed it would leave rates at historically low levels until 2014 and added that the Fed would begin using a target inflation rate of two per cent. Wednesday’s economic numbers had German Ifo Business Climate print at 108.3, versus an expected 107.6, and U.S. Pending Home Sales declining by -3.5% m/m, versus an expected decline of -0.6%. Thursday saw the rate consolidate as Italy held a successful bond auction and the possibility of an agreement between Greek bondholders willing to accept a 4% rate on swapped Greek bonds. Eco-data on Thursday included GfK German Consumer Climate at 5.9, versus an expected 5.6, U.S. Core Durable Goods Orders, which increased +2.1% m/m, versus an expected increase of +0.9% while Durable Goods Orders rose +3.0%, versus an expected rise of +2.1%, also U.S. New Home Sales, at 307K versus 321K expected, and Initial Jobless Claims, which rose to 377K versus 371K expected. On Friday, the pair made its weekly high of 1.3219 after U.S. Advance GDP came out lower than expected, showing a +2.8% rate of growth for the last quarter, versus an expected +3.0%. EUR/USD went on to close the week at 1.3218, gaining +2.2% overall for the week. After the market close, Fitch’s ratings downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain and kept them all on a negative outlook with a 50% chance of a further cut in the next two years.

USD/JPY lost ground last week after the BOJ left rates unchanged and lowered growth forecasts, and as Japan reported its first trade deficit since 1980. The rate began the week on a steady note as traders awaited Tuesday’s release of the BOJ rate decision. The pair then shot up on Tuesday after the BOJ left its benchmark Overnight Call Rate at 0-0.10%. In the press conference after the rate announcement, BOJ Governor Shirakawa stated that, “The euro''s fall versus the yen could drag on Japanese companies export competitiveness against European rivals. It could also hurt the economy by worsening corporate revenues and sentiment.” Also, 2011 growth figures were revised lower to a -0.4% contraction, with projections for 2012 growth lowered to 2.0% from 2.2. On Wednesday, the rate made its weekly high of 78.27 after Japan’s Trade Balance showed its first deficit since 1980, coming out at -0.57T, versus an expected surplus of +0.36T. Thursday saw the rate reverse direction and trade lower after Japanese Core CPI came out at -0.4%, versus -0.3% expected, and Japanese Retail Sales, which came out at +2.5% y/y, versus an expected +2.3%. The pair continued selling off sharply on Friday, making its weekly low of 76.65 after a disappointing U.S. Advance GDP number. USD/JPY went on to close at 76.67, showing an overall decline of -0.4% from its previous weekly close. GBP/USD extended the previous week’s gains after the MPC Meeting Minutes showed the MPC unanimously voted to keep rates and the Asset Purchase Facility unchanged. The week began with the rate trading higher off of its weekly low of 1.5515 on Monday in the absence of any significant economic data out of either country. Cable continued strengthening on Tuesday after UK Public Sector Net Borrowing came out at 10.8B, versus an expected 12.4B. On Wednesday, the rate continued rallying despite UK Preliminary GDP declining by -0.2% q/q, versus an expected -0.1% decline and the MPC Meeting Minutes, which showed a unanimous 0-0-9 vote to leave rates and the Asset Purchase Facility unchanged. Members “noted a downside risk to inflation arising from the possibility that the reduction in the economys supply potential following the recession had been less, and hence spare capacity greater, than assumed in the (November) Inflation Report.” Also supporting Cable on Wednesday was the FOMC leaving interest rates unchanged and extending the period for historically low rates out to 2014. Thursday saw the rate continue higher despite UK CBI Realized Sales coming out at -22, versus an expected print of -2. On Friday, the pair made its weekly high of 1.5738 as the United States reported a lower than expected Advance GDP number. Cable went on to close the week at 1.5728, showing an overall gain of +1.0% for the week.

AUD/USD extended the previous week’s gains as risk appetite increased and Australia reported mixed economic data. The week began on a positive note with the rate rising after Australia reported quarterly PPI had risen +0.3% as was widely expected. Also out on Monday was the Australian CB Leading Index, which declined by -0.3% m/m, versus a previous reading of +0.5%. The pair then made its weekly low of 1.0426 on Tuesday after the Australian MI Leading Index declined by -0.2% m/m, versus a previous reading of +0.1%. On Wednesday, the rate resumed its uptrend as Australian CPI came in with a flat reading m/m, versus an expected increase of +0.2%, while Trimmed Mean CPI increased by +0.6% q/q, versus an expected increase of +0.5%. The rate continued higher on Thursday, making its weekly high of 1.0685 as the United States reported mixed economic data. The pair continued higher on Friday as U.S. Advance GDP failed to meet analyst expectations, bringing the rate to close at 1.0656, showing an overall gain of +1.6% from its previous weekly close. USD/CAD lost ground last week as risk assets were favoured over the Greenback and Canada reported favourable economic data. The week began on a soft note with the rate trading lower after making its weekly high of 1.0159 on Monday after the Canadian Leading Index rose +0.8% m/m, versus an expected +0.6% rise. The pair then gained marginally on Tuesday despite Canadian Core Retail Sales increasing by +0.3% m/m, versus +0.2% expected, and Canadian Retail Sales, which also gained by +0.3% m/m as widely anticipated. On Wednesday, the rate resumed its decline as the United States reported weaker Pending Home Sales and the FOMC stated it would keep rates low until 2014. Thursday saw the rate continue its slide, making its weekly low of 0.9980 as the U.S. reported mixed economic data. On Friday, the rate continued declining after a lower than expected Advance GDP number weighed on the Greenback, bringing the pair to close at 1.0006, showing an overall decline of -1.2% for the week.

NZD/USD continued gaining last week as the RBNZ left rates unchanged and New Zealand reported a better than expected Trade Balance. The week began on a positive note, with the pair gaining in the absence of any significant economic data out of either country. The pair continued rising on Tuesday as risk appetite increased in the market. On Wednesday, the pair made its weekly low of 0.8039 after the RBNZ left its benchmark Official Cash Rate unchanged at 2.50%. In the accompanying statement, the RBNZ noted that, “Since the time of the December Statement, financial market sentiment has improved slightly, with increased liquidity in European financial markets. However, the global economy remains fragile and risks to the outlook remain.” The rate promptly resumed its uptrend after the rate announcement, with the New Zealand Trade Balance, out on Thursday showing a surplus of +338M, versus an expected deficit of -74M. The pair then went on to make its weekly high of 0.8248 on Friday after a disappointing U.S. Advance GDP number, bringing the rate to close at 0.8240, showing an overall gain of +2.2% for the week.

The week ahead

AUD The upcoming Australian economic calendar is bit busier than last week, featuring the Trade Balance on Thursday. Monday is quiet, so Tuesday starts the week’s highlights off with NAB Business Confidence (last 2) and Private Sector Credit (0.4%). Wednesday then features the tentatively scheduled HIA New Home Sales (last 6.8%), HPI (-0.7%) and Commodity Prices (last 10.9%). Thursday offers Building Approvals (2.3%) and the Trade Balance (1.23B). Friday’s data concludes the week with the AIG Services Index (last 49.0). Resistance for AUD/USD is seen at 1.0686, 1.0751 and 1.1079, with support noted at 1.0571, 1.0376/84 and 1.0042.

CAD The upcoming Canadian economic calendar is about as active as last week, featuring the Employment Report due out on Friday. Monday is quiet, so Tuesday starts the week’s highlights off with GDP (0.2%) and the RMPI (0.2%). Wednesday and Thursday offer little of note, and Friday’s data concludes the week with the Employment Change (23.5K) and Unemployment Rate (7.5%). Resistance for USD/CAD is seen at 1.0051/78, 1.0160 and 1.0282/1.0318, while support shows at 0.9980, 0.9891 and 0.9724.

EUR The upcoming Eurozone economic calendar is less active than last week, featuring the German and EU Employment Reports due out on Tuesday. Monday starts the week’s highlights off with German Preliminary CPI (-0.4%) and the EU Economic Summit, and Tuesday’s key events include German Retail Sales (0.9%), French Consumer Spending (0.3%), German Unemployment Change (-8K) and the EZ Unemployment Rate (10.4%). Wednesday then features the EZ CPI Flash Estimate (2.7%), while Thursday offers little of note. Friday’s data concludes the week with EZ Retail Sales (0.4%). Resistance for EUR/USD is seen at 1.3421, 1.3546 and 1.3652, with support showing at 1.3076, 1.2875/1.2930 and 1.2623.

GBP The upcoming UK economic calendar is about as busy as last week, featuring PMI data due out Wednesday through Friday. Monday is quiet, so Tuesday starts the week’s highlights off with GfK Consumer Confidence (-31) and Net Lending to Individuals (1.2B). Wednesday then features the Nationwide HPI (-0.1%) and Manufacturing PMI (50.2). Thursday offers Construction PMI (53.0). Friday’s data concludes the week with the Halifax HPI (Feb 3rd-8th, 0.1%) and Services PMI (53.6). Resistance to the topside for GBP/USD shows at 1.5733/79, 1.6091 and 1.6164, while support for the pair is expected at 1.5499/1.5527, 1.5360 and 1.5232.

JPY The upcoming Japanese economic calendar is quieter than last week, featuring Preliminary Industrial Production due out on Tuesday. Monday is quiet, so Tuesday starts the week’s highlights off with Household Spending (-0.1%) and Preliminary Industrial Production (2.6%). Wednesday then features Average Cash Earnings (-0.3%). That concludes the week’s key data since Thursday and Friday are quiet. Resistance for USD/JPY currently shows up at 77.06/68, 78.15/28 and 79.52/80.22, with support indicated at 76.55, 75.94 and 75.56.

NZD The upcoming New Zealand economic calendar is about as quiet as last week, featuring the Employment Report on Thursday. Monday is quiet, so Tuesday starts the week’s highlights off with Building Consents (last -6.4%). Wednesday is quiet, and Thursday offers Employment Change (last 0.2%) and Unemployment Rate (last 6.6%) data. That concludes the week since Friday is quiet. The chart for NZD/USD shows resistance at 0.8242/48, 0.8571 and 0.8841. On the downside, technical support is expected at 0.8040, 0.7979/96 and 0.7864.

USD The upcoming U.S. economic calendar is busier than last week, featuring the key Employment Report due out on Friday. Monday starts the week’s highlights off with Core PCE Price Index (0.1%) and Personal Spending (0.2%), and Tuesday’s key events include the Employment Cost Index (0.4%), S&P/CS Composite (-20 HPI (-3.2%), Chicago PMI (63.2) and CB Consumer Confidence (68.4). Wednesday then features ADP Non-Farm Employment Change (193K), ISM Manufacturing PMI (54.6) and Crude Oil Inventories (last 3.6M). Thursday offers Weekly Initial Jobless Claims (371K), Preliminary Nonfarm Productivity (1.1%), Preliminary Unit Labor Costs (0.9%) and testimony by Fed Chairman Bernanke. Friday’s key data concludes the week with Non-Farm Payrolls (156K), Unemployment Rate (8.5%), Average Hourly Earnings (0.2%), ISM Non-Manufacturing PMI (53.2) and Factory Orders (1.5%). Also, the World Economic Forum’s annual meetings taking place in Davos, Switzerland are due to conclude on Sunday, January 29th. The WEF meetings are traditionally attended by central bankers, government and business leaders, and finance and trade officials from more than 90 nations. The influential meetings are usually open to the press, so influential officials sometimes talk with reporters during the day, and their comments may have an impact on one or more major currencies.


Open the calendar

Currency Converter

select
select
Rate: 1.5819
=
Rate: 0.6322
=
Go
See My FX Dashboard for more info

Register Free

Registration is quick and easy. Access live customer rates, free tools and make international payments.

Register today
Already registered? Login
Get free rate alerts
 / 

: Choose ccy pair and enter the exchange rate. An alert will be triggered when the exchange rate is reached and an email will be sent to you. You can unsubscribe any time and your email address is safe – see our Privacy Policy.
Get our free commentary
Commentary: Stay on top of the news with updates from our expert dealers on the latest currency movements. You can unsubscribe any time and your email address is safe – see our >Privacy Policy.
Keep me up to date: RSS

Mobile Forex trading tools

Make money transfers or currency conversions on the go via our mobile site, iPhone or Android apps. Learn more here

Banners

Sitemap

You're in good hands:

IMPORTANT: Use of this website is subject to the Website Terms. Use of the Services of the UKForex Limited is subject to the Client Agreement. Nothing on this website constitutes or should be construed as financial advice. This information has been prepared for distribution over the internet and without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites.

DISCLAIMER: UKForex makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this web site. Read full disclaimer.

UKForex provides international money transfer services to private clients and business customers. Use our free currency converter, exchange rate charts, economic calendar, in-depth currency news and updates and benefit from competitive exchange rates and outstanding customer service.

UKForex is authorised and regulated by the Financial Services Authority (FRN: 521566) for the provision of payment services.

Money Laundering Regulation Number (MSB): 12219180. Issued by HM Revenue & Customs (HMRC)
Read our Money Laundering Statement