Currency Market Trend Analysis: February 13, 2017

Ryan February 15th, 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	Releases / Holiday	Country
February 14, 2017	German Gross Domestic Product	Europe
February 14, 2017	Italian Gross Domestic Product	Europe
February 14, 2017	Consumer Price Index	England
February 14, 2017	Fed Chair Yellen appears before Senate Banking Panel	USA
February 15, 2017	Consumer Price Index	USA
February 16 & 17, 2017	G20 Finance Ministers Meeting	Europe

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

CAD - Canadian Dollar

After two straight weeks of gains, the Canadian dollar took a breather last week to close slightly down at 1.3076.

For the week ahead, we expect to see some general weakness in the CAD as oil prices continue to trend downward coupled with upward US dollar strength from Trump’s indication that a “phenomenal tax plan” is in the works for both corporations and individuals.

The markets will also be keeping a close eye on what is discussed (or tweeted) when PM Trudeau and President Trump meet on Monday followed by Fed Chair Yellen’s Congressional Testimony on the economic and monetary policy outlook on Tuesday.

1. Manufacturing Sales: Wednesday February 15.

2. Foreign Securities Purchases: Friday February 17.

GBP - British Pound

Last week, the British pound opened at 1.2482, reached a high of 1.2582 and a low of 1.2342 before closing out the week relatively unchanged at 1.2475.

The US dollar has been negatively impacted over the past few weeks by major policy announcements and rhetoric coming from the Trump administration. However, USD strength is gaining momentum as major tax cuts are on the horizon and key administration nominees continue to be approved.

The key factors to look for this week are CPI, Claimant Count Change and retail sales data from the UK along with PPI and retail sales data from the US, which could give a hint on when the next Fed hike would take place.

1. CPI: Tuesday February 14.

2. PPI Input: Tuesday February 14.

3. RPI Input: Tuesday February 14.

4. Average Earnings Index: Wednesday February 15.

5. Claimant Count Change: Wednesday February 15.

6. CB Leading Index: Wednesday February 15.

7. Retail Sales: Friday February 17.

EUR - Euro

Last week the Euro reached a high of 1.0802 and a low of 1.0608 before finally closing out at 1.0643.

Rising political uncertainty and risk in Europe is back in the spotlight again as early election polling in France and the Netherlands shows “traditional” parties in trouble. The ‘can of Greek debt that was kicked down the road’ earlier is also on the horizon and will need to be dealt with in the short term.

For this week’s economic calendar, German Preliminary GDP data is the one to watch coming out of Europe while the US will be reporting on PPI and retail sales data. For US dollar strength and momentum to build, market focus will need to shift away from Trump to potential Fed rate hikes and their timing.

1. German WPI: Monday February 13.

2. German GDP: Tuesday February 14.

3. German CPI (final): Tuesday February 14.

4. Italian GDP: Tuesday February 14.

5. Flash GDP: Tuesday February 14.

6. German ZEW Economic Sentiment: Tuesday February 14.

7. Industrial Production: Tuesday February 14.

8. Trade Balance: Wednesday February 15.

9. ECB Meeting Minutes: Thursday February 16.

10. Current Account: Friday February 17.

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