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Currency Market Trend Analysis: January 30, 2017

Ryan January 31st, 2017

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 30, 2017	Personal Consumption Expenditure Core (YoY) (Dec)	USA
January 31, 2017	Gross Domestic Product (YoY) (4Q)	Europe
January 31, 2017	Consumer Price Index (YoY) (Jan)	Europe
January 31, 2017	Gross Domestic Product (YoY) (Nov)	Canada
February 01, 2017	ISM Manufacturing (Jan)	USA
February 01, 2017	Federal Open Market Committee Rate Decision	USA
February 02, 2017	Bank of England Rate Decision	England
February 02, 2017	Bank of England Inflation Report	England
February 03, 2017	Change in Non-Farm Payrolls (Jan)	USA
February 03, 2017	Unemployment Rate (Jan)	USA

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

CAD - Canadian Dollar

After losing 180 points two weeks ago, the CAD recovered 150 points last week and closed at 1.3150. The Trump administration made quite a statement by taking the US out of the TPP and are now looking to renegotiate NAFTA. This move would create a great amount of market uncertainty and lead to a potential trade war between Canada, Mexico and the US, which will not be good for any country.

Things to keep an eye on this week which could cause some volatility include a GDP report and BOC Governor Poloz speech on the Canadian side and lots of data from the US that includes the FOMC statement, Non-Farm Payroll and Wage Earnings reports.

1. Gross Domestic Product: Tuesday January 31.

2. Raw Materials Price Index: Tuesday January 31.

3. Bank of Canada Governor Stephen Poloz Speech: Tuesday January 31.

4. RBC Manufacturing Purchasing Managers’ Index: Wednesday February 01.

GBP - British Pound

The GBP gained 160 points last week and closed at 1.2542, a remarkable recovery from a few weeks ago where it briefly dipped below 1.2000 as news and uncertainty around the Brexit process weighed on the pound.

Positive news from last week for the pound was that the UK Supreme Court ruled the UK government has to seek Parliament approval for the invocation of Article 50 in order to begin the Brexit process.

The first week of February will be full of news and data coming from the UK with the manufacturing and services PMIs, an inflation report along with a rate announcement and policy statement from the Bank of England. Markets expect the pound to slow down and hover around the 1.2500 mark for this week.

1. GfK Consumer Confidence: Tuesday January 31.

2. Net Lending to Individuals: Tuesday January 31.

3. BRC Shop Price Index: Wednesday February 01.

4. Nationwide House Price Index: Wednesday February 01.

5. Manufacturing PMI: Wednesday February 01.

6. Construction PMI: Thursday February 02.

7. Bank of England Inflation Report: Thursday January 02.

8. Bank of England Monetary Policy Summary: Thursday February 02.

9. Bank of England Official Bank Rate: Thursday February 02.

10. Bank of England Asset Purchase Facility: Thursday February 02.

11. Services PMI: Friday February 03.

EUR - Euro

Last week saw a fair amount of volatility with this pair but the EUR edged slightly higher and closed at 1.0774. The market focused too much on Trump since the beginning of the year but now that we are starting to understand what his administration intends on doing, the focus will shift squarely towards the Fed and its rate hike possibilities.

If this week’s US economic data comes out strong, we should see further strength in the dollar which could push the EUR towards the 1.0500 mark. It’s going to be a busy week on the Eurozone side with the release of numerous GDP, Employment and Inflation reports.

1. Spanish Flash Gross Domestic Product: Monday January 30.

2. German Consumer Price Index: Monday January 30.

3. French GDP: Tuesday January 31.

4. German Retail Sales: Tuesday January 31.

5. French CPI: Tuesday January 31. 7:45.

6. Spanish CPI: Tuesday January 31.

7. German Unemployment Change: Tuesday January 31

8. EU CPI: Tuesday January 31.

9. EU GDP: Tuesday January 31.

10. EU Manufacturing PMIs: Wednesday February 01.

11. EU Economic Forecasts: Wednesday February 01.

12. Spanish Unemployment Change: Thursday February 02.

13. European Central Bank Economic Bulletin: Thursday February 02.

14. EU Services PMIs: Friday February 03.

15. EU Retail Sales: Friday February 03.

FX Market Pro

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About the Author

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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