AUD: CB Leading Index, HSBC Flash Manufacturing PMI
EUR: French, German & euro area's Manufacturing & Services PMIs
GBP: Retail Sales
USD: Unemployment Claims, Existing Home Sales, Philly Fed Manufacturing Index, Jackson Hole Symposium
US dollar enjoyed solid demand ahead of the FOMC meeting minutes which area due later today (18:00 GMT). Many traders expect that the Fed will confirm improved growth outlook. Still, there’s a risk of “sell the fact reaction”.
The FOMC meeting minutes are due today at 18:00 GMT.
Analysts at Standard Chartered think that any hawkish surprise (and, consequently, the positive effect for USD) in the FOMC July minutes is likely to be limited – the hawks already had the Philadelphia Fed President Plosser’s dissent and the accompanying statement.
The Fed’s forward guidance is that there will be a “considerable time” between the end of QE and the first rate hike. Standard Chartered says that the key in the minutes will be...
Key market drivers for August 20 (Wednesday)
AUD: RBA Gov Stevens Speaks (23:30 GMT on Aug 19)
GBP: Bank of England's August meeting minutes (08:30 GMT)
CAD: Wholesale Sales (12:30 GMT)
USD: FOMC Meeting Minutes (18:00 GMT)
EUR/USD fell on Tuesday reaching our targets and going even lower touching support at $1.3320. The level of $1.3295 (Nov. low) now seems as close as ever. The pair should find some initial support at this point. The close below $1.3340 will strengthen the case...
GBP/USD fell to $1.6623, the lowest level since the beginning of April closing this week’s opening gap.
Pound weakened as the UK inflation data came lower than expected. Note though that the inflation (1.6%) is still rather close to the Bank of England's 2% target. Further dynamics of GBP will depend on the market's expectations ahead of the BoE's minutes release on Wednesday, 08:30 GMT).
Authored by Alex Weber
Time has come to analyze my favorite FX cross – EUR/JPY.
The pair has been cramped in a clear downward channel since May. Bearish widening daily Ichimoku is a good confirmation of the medium term descending tendency. The 100-day moving average crossed the 200-day moving average upside down at the beginning of August – another signal for growling bears to attack.
Wait. I know my words sound persuasive enough, but you shouldn’t go short right now. Take a look at the MACD...
Kira Iukhtenko, FBS financial analyst
Japan Q2 GDP release was one of the most discussed events on the past week. Economy contracted by almost 7% from April to June following a 6% growth in Q1. It was the sharpest decline since the year 2011, when a powerful earthquake paralyzed the country. On the one hand, Abe government warned us about a short-lived economic slowdown following the sales tax hike in April: Japanese households strongly reduced consumption in Q2 after mass purchases in Q1....
Kira Iukhtenko, FBS financial analyst
The cable had another bearish week, plummeting below $1.6700 on weak UK wage growth and dovish BOE Quarterly Inflation report. Even as the employment increased and unemployment declined, the average weekly earnings fell by 0.2% y/y – this was the first negative reading in 5 years. The Bank of England slashed its 2014 wage growth forecast from +2.5% to 1.25%, dampening the rate hike expectations in the year 2014. Real wage growth is lagging far behind the...
Elizaveta Belugina, FBS leading analyst
During the past week there were several weak releases in the euro area: the industrial production declined, while GDP growth in the second quarter turned out to be zero. At the same time, deep down everyone was probably expecting something like this, so the market’s reaction was modest. At the same time, with the course of time bad data will do their job: the difference in condition of the US and the euro zone’s economies is now evident, and the pressure...