Monday, February 6, 2017

Currency Market Trend Analysis: February 06, 2017

Currency Market Trend Analysis: February 06, 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 Releases / Holiday Country
February 06, 2017 ECB President Draghi Speaks to Parliament in Brussels Europe
February 10, 2017 Unemployment Rate Canada
February 10, 2017 Net Change in Employment Canada
February 10, 2017 University of Michigan Confidence Report USA

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

CAD - Canadian Dollar

After gaining 110 points last week, the Canadian dollar closed at 1.3021 for its second straight week of gains against the greenback. The main drivers for the strong performance are continued weakness in the US dollar, stable oil prices and the Canadian economy continues to generate steady growth.

Policy changes and trade related statements made by the Trump administration continue to put negative pressure on the US dollar.

Employment change is this week’s key event that will give us another indication of the true strength of the Canadian economy, which should determine if the CAD can post its third straight week of gains. 

 

1. Trade Balance: Tuesday February 07.

2. Ivey Purchasing Managers Index: Tuesday February 07.

3. Housing Starts: Wednesday February 08.

4. New Housing Price Index: Thursday February 09.

5. Employment Charge: Friday February 10.

 

GBP - British Pound

The GBP traded between 1.2409 and 1.2706 and closed out last week at 1.2469 after losing 120 points the previous week. Uncertainty and worry is returning to the pound as the Invocation of Article 50, to officially begin the Brexit process draws closer and closer.

Last week, Mark Carney was dovish stating that future interest rates could move in either direction as the Bank of England held rates steady. With UK manufacturing production data as this week’s major news item of note, we expect the GBP to trend downwards and close out around the 1.235 mark. 

 

1. BRC Retail Sales Monitor: Tuesday February 07.

2. Halifax House Price Index: Tuesday February 07.

3. RICS House Price Balance: Thursday February 09.

4. 30-year Bond Auction: Thursday February 09.

5. Manufacturing Production: Friday February 10.

6. Goods Trade Balance: Friday February 10.

7. NIESR Gross Domestic Product Estimate: Friday February 10.

 

EUR - Euro

Last week the Euro reached a bottom of 1.0620 but used general weakness in the US dollar along with some good European data to end up closing higher at 1.0785.

The US dollar slumped as markets saw a huge risk for potential trade wars as President Trump accused Germany, China and Japan of keeping their currencies low for unfair trade advantages.

Industrial output data is this upcoming week’s key factor that will determine if the Euro can break through the strong resistance mark of 1.08 and continue marching higher.

 

1. German Factory Orders: Monday February 06.

2. Retail Purchasing Managers Index: Monday February 06.

3. Sentix Investor Confidence: Monday February 06.

4. German Industrial Production: Tuesday February 07.

5. French Trade Balance: Tuesday February 07.

6. EU Economic Forecasts: Wednesday February 08.

7. German Trade Balance: Thursday February 09.

8. French Industrial Production: Friday February 10.


 

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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 02:00 PM
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