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Monday, January 9, 2017

Currency Market Trend Analysis: January 09, 2017

Currency Market Trend Analysis: January 09, 2017
Source: CXI International Payments Team

 

By The Numbers: Your FX Week In Review

 
 
Foreign currency value versus USD is decreasing
 
Foreign currency value versus USD is increasing

*Indicators show the percent change over the past week.

Currency Calendar

Date Holiday Country
January 09, 2017 Labor Market Conditions Index (Dec) USA
January 09, 2017 Bank of Canada Business Outlook Survey  Canada
January 11, 2017 Non-Monetary Policy's ECB Meeting Europe
January 12, 2017 ECB Monetary Policy Meeting Accounts Europe
January 13, 2017 Fed's Janet Yellen Speech USA

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

CAD - Canadian Dollar

The Canadian dollar started the first week of 2017 in positive territory gaining close to 200 points but major players maintain a bearish outlook for CAD throughout 2017.

Near-term domestic risk is elevated as we look to the release of the Bank of Canada’s Business Outlook Survey and consider its implications for policymakers ahead of the January 18 Bank of Canada policy decision.

There are four key events to watch this week which could influence the market.  

  1. BoC Business Outlook Survey:  This survey is released on Monday and provides a snapshot of general business conditions and the level of optimism in the business sector.
  2. Housing Starts: Housing Starts dropped to 183 thousand in November, short of the forecast of 191 thousand. The estimate for December stands at 187 thousand and comes out on Thursday.
  3. Building Permits: Coming out on Tuesday, Building Permits tends to show strong fluctuation, making accurate estimates a tricky task. In October, the indicator bounced back with a strong gain of 8.7%, crushing the forecast of 1.6%.
  4. New Housing Price Index: Also released on Thursday with the Housing Starts, this housing inflation indicator improved to 0.4% in October, above the forecast of 0.2%. The estimate for the November release is 0.2%.

 

GBP - British Pound

The Pound has fallen more than 2% since last Thursday against the USD and is under renewed pressure this week as traders react to PM May’s suggestions that she is willing to go for a full Brexit rather than trying to maintain the UK’s access to the common market.

The longer-term picture for 2017 looks very unsteady for the pound. This week’s key events to keep an eye on are highlighted below.

  1. Manufacturing PMI: Tuesday, 9:30. The PMI dipped to 53.4 points in November, shy of the estimate of 54.4 points. Little change is expected in the December report.
  2. Construction PMI: Wednesday, 9:30. Construction PMI was almost unchanged in November, posting a reading of 52.8. This figure beat the forecast of 52.3. The estimate for December stands at 52.6.
  3. Net Lending to Individuals: Wednesday, 9:30. This indicator is closely related to consumer spending, a key driver of economic growth. In October, the indicator climbed to GBP 4.9 billion, above the estimate of GBP 4.8 billion. No change is expected in the November report.
  4. Services PMI: Thursday, 9:30. The index rose to 55.2 points in November, pointing to expansion in the services sector. This was above the forecast of 54.2 points. The estimate for the December report stands at 54.8 points.
  5. BOE Chief Economist Andy Haldane Speech: Thursday, 13:00. Haldane will speak at an event in London. Analysts will be looking for clues as to the BoE’s future monetary policy.

 

EUR - Euro

During the first week of 2017, the EURO dipped to new 14-year lows but recovered quickly thanks to weakness in the USD. 

Another busy week lies ahead for investors as Europe releases trade balance and industrial output reports while plenty of US data, Fed talk and President-elect Trump’s news conference are all liable to influence market thinking.


 

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About the Author

Ganesh Persaud

 Ganesh Persaud - Corporate Trader

Ganesh educates corporate clients on foreign currency markets lending industry best practices that enhance client knowledge and create specialized solutions that fit each business. Interested in having a custom international payments strategy or foreign exchange risk plan?


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Posted By Ganesh Persaud at 11:20 AM
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