Edition 18|August 24, 2015
The U.S. dollar showed weakness after the release of dovish FOMC minutes and intensified market volatility after devaluation of the yuan that pushed back the expectations for the rate hike next month. Despite the improved U.S. housing data and consumer inflation, the New York state manufacturing shrank and Kazakhstan and Vietnam exchange rates showed steep change followed by the yuan. Most importantly, the dovish statements in FOMC meeting added force to the dollar weakening.
Chinese manufacturing activity have shrunk with the fastest pace in six and a half years which have added concerns to global financial market. China has the second largest economy in the world that such contraction could give strong negative impacts to markets around the world. Thus, the grown fears after the contracted manufacturing reading have brought great fluctuation in the forex market.
On the other side, the euro showed strength after German parliament has passed the Greece bailout programme with overwhelming votes in favor. It jumped more than 1% against the dollar on Friday. EUR/USD gained 1.28% to 1.1383, the pair ended the week with gains of 2.55% which is the strongest growth since April.
The raw material prices have dropped that have brought great drops to the related currencies. Russian Ruble fell steep by 6.45% and Australian dollar was weakened by 0.68%.
New Zealand dollar also fell, traded with U.S. counterpart at 0.6682. RBNZ is to release quarterly inflation expectation and the Deputy Governor is to speak on property market today.
Japanese yen ticked in early Asia today while waiting for the final June Japanese Leading Index. JPY/USD changed hands, gained 0.14%.
The British pound kept its bullish state, ended the week with almost seven week highs against the dollar with GBP/USD at 1.5722.
Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.
Monday, August 24
Fed President of Atlanta state Dennis Lockhart is to speak. Market investors will closely watch his comments as he stated in his last speech that the rate hike will be executed unless the economic data show great depreciation.
Japan is to release Leading Index.
In New Zealand, the Reserve Bank deputy governor Grant Spencer is to speak on central bank view of the property market at a private event.
Tuesday, August 25
Housing indexes are to be released in the U.S. Data include FHFA housing price, S&P Case-Shiller index and new home sales. Also, consumer confidence data is to be released. These data are expected to be improved which might prompt the rate hike issues.
New Zealand is to release the quarterly data on inflation expectations
In Germany, GDP growth is to be released followed by IFO Institutes’ report on its business climate.
Switzerland is to release employment level data.
Wednesday, August 26
The U.S. is to release data on durable goods order. Consensus expects the new orders are to be shrunk at -0.4% from its previous month’s reading at +3.4%. However, industrial production and manufacturing activity showed improvements recently that durable goods order is also expected to be improved.
New Zealand is to release its trade balance.
Reserve Bank of Australia Governor Glenn Stevens is to speak.
Thursday, August 27
The U.S. is to release the preliminary data of second quarter GDP growth, as well as the initial jobless claims and pending home sales data.
Jackson Hole conference starts in the U.S. with central banks governors attending from different countries.
Australia is to release data on private capital expenditure.
Friday, August 28
The U.S. is to release PCE price index; consensus shows decreased expectation at +0.1% due to recent drop of oil and raw material prices.
Also, personal income/expenditure and consumer sentiments are to be released in the U.S.
Japan is to publish bundle of data including retail sales, inflation rate, personal spendings and consumer inflation.
U.K is to publish revised data on second quarter GDP growth.
Germany is to release data on consumer inflation.
(Mia Chung)
The U.S. dollar showed weakness after the release of dovish FOMC minutes and intensified market volatility after devaluation of the yuan that pushed back the expectations for the rate hike next month. Despite the improved U.S. housing data and consumer inflation, the New York state manufacturing shrank and Kazakhstan and Vietnam exchange rates showed steep change followed by the yuan. Most importantly, the dovish statements in FOMC meeting added force to the dollar weakening.
Chinese manufacturing activity have shrunk with the fastest pace in six and a half years which have added concerns to global financial market. China has the second largest economy in the world that such contraction could give strong negative impacts to markets around the world. Thus, the grown fears after the contracted manufacturing reading have brought great fluctuation in the forex market.
On the other side, the euro showed strength after German parliament has passed the Greece bailout programme with overwhelming votes in favor. It jumped more than 1% against the dollar on Friday. EUR/USD gained 1.28% to 1.1383, the pair ended the week with gains of 2.55% which is the strongest growth since April.
The raw material prices have dropped that have brought great drops to the related currencies. Russian Ruble fell steep by 6.45% and Australian dollar was weakened by 0.68%.
New Zealand dollar also fell, traded with U.S. counterpart at 0.6682. RBNZ is to release quarterly inflation expectation and the Deputy Governor is to speak on property market today.
Japanese yen ticked in early Asia today while waiting for the final June Japanese Leading Index. JPY/USD changed hands, gained 0.14%.
The British pound kept its bullish state, ended the week with almost seven week highs against the dollar with GBP/USD at 1.5722.
Weekly Events and Forecasts
Ahead of the coming week, Solforex has compiled a list of these and other significant events likely to affect the markets.
Monday, August 24
Fed President of Atlanta state Dennis Lockhart is to speak. Market investors will closely watch his comments as he stated in his last speech that the rate hike will be executed unless the economic data show great depreciation.
Japan is to release Leading Index.
In New Zealand, the Reserve Bank deputy governor Grant Spencer is to speak on central bank view of the property market at a private event.
Tuesday, August 25
Housing indexes are to be released in the U.S. Data include FHFA housing price, S&P Case-Shiller index and new home sales. Also, consumer confidence data is to be released. These data are expected to be improved which might prompt the rate hike issues.
New Zealand is to release the quarterly data on inflation expectations
In Germany, GDP growth is to be released followed by IFO Institutes’ report on its business climate.
Switzerland is to release employment level data.
Wednesday, August 26
The U.S. is to release data on durable goods order. Consensus expects the new orders are to be shrunk at -0.4% from its previous month’s reading at +3.4%. However, industrial production and manufacturing activity showed improvements recently that durable goods order is also expected to be improved.
New Zealand is to release its trade balance.
Reserve Bank of Australia Governor Glenn Stevens is to speak.
Thursday, August 27
The U.S. is to release the preliminary data of second quarter GDP growth, as well as the initial jobless claims and pending home sales data.
Jackson Hole conference starts in the U.S. with central banks governors attending from different countries.
Australia is to release data on private capital expenditure.
Friday, August 28
The U.S. is to release PCE price index; consensus shows decreased expectation at +0.1% due to recent drop of oil and raw material prices.
Also, personal income/expenditure and consumer sentiments are to be released in the U.S.
Japan is to publish bundle of data including retail sales, inflation rate, personal spendings and consumer inflation.
U.K is to publish revised data on second quarter GDP growth.
Germany is to release data on consumer inflation.
(Mia Chung)