Each week our Sales Manager Jorn Andriessen will be giving us a snapshot update of the highs and lows of the foreign exchange market. If you would like any further information, please email Jorn@airwallex.com
The USD continues to fail to make new highs. Trump's failure to push through a healthcare bill triggered sharp selling in equities around the world on Monday as investors fretted about his ability to push through economic stimulus measures.
As the dollar levels have been volatile recently, investors will remain cautious for a while, traders say.
This bodes well for precious metals in the medium to long term and commodity backed currencies.
It is set to be a busy week ahead in terms of data especially for the AUD and the USD and as it is the first week of the month, and therefore the first busy Friday.
We have the US unemployment data to look forward to as well.
How the markets are looking
The AUD fell strongly against the USD last week.
A busy week is lined up for the AUD.
On Sunday night we have Retail Sales expected to fall from 0.4% to 0.3%.
Monday sees the release of the Trade balance number thought to be 1.75B from the previous 1.20B.
Tuesday we have the Cash Rate which is the interest rate charged on overnight loans between financial intermediaries and is thought to remain at 1.50%. This is followed by the RBA Governor speaking.
The US$ Index closed up reasonably well last week, while there is a very busy week ahead in terms of data.
On Monday we have the Manufacturing PMI figure thought to decline from 57.7 to 57.2.
Wednesday we have the Non-Manufacturing PMI also expected to decline from 57.6 to 57.1. This is followed by Crude Oil Inventories and the FOMC Meeting Minutes.
On Thursday we have the usual Unemployment Claims figure estimated to fall from 258,000 to 251,000.
Friday is the big day. Average Hourly Earnings is expected to remain static at 0.2%, Non-Farm Payroll is expected to fall substantially from 235,000 to 176,000 and the Unemployment Rate is anticipated to remain at 4.7%.
The EURO fell strongly against the USD last week.
There is no data for the EURO this week.
The GBP closed slightly higher against the USD last week.
We start on Monday with Manufacturing PMI expected to rise from 54.6 to 55.1.
On Tuesday we have Construction PMI expected to remain static at 52.5.
Wednesday is the last in the series with Services PMI thought to rise slightly from 53.3 to 53.5.
Finally on Friday we have Manufacturing Production estimated to rise from -0.9% to 0.3%.
Two items for the CNY this week.
On Saturday we have both Consumer Price Index and Producer Price Index.
The YEN rose reasonably against the USD last week.
There are two items for the YEN this week both on Monday.
The manufacturing Index is expected to rise from 10 to 14 and the Non-Manufacturing Index is expected to rise from 18 to 19.
credit: Jorn Andriessen