Weekly Preview: 5 Currencies to Keep an Eye on for the Week Ahead (Dec 16 – Dec 20)

AxiTrader

The Japanese Yen was the biggest loser this week, as encouraging news related to the US-China trade war spurred risk-appetite. Wall Street rallied to record highs after good news from the trade front, say senior management at AxiTrader

In this Guest Editorial, the management team at AxiTrader look at analytical aspects of importance in retail trading, with a focus on five major currency pairs.

  • USD: Flash Manufacturing PMI and Final Q3 GDP in focus, USD could bounce as trade optimism persists
  • GBP: Markit Manufacturing and Services PMI, Employment, CPI, PPI, GDP and Retail Sales data in focus, BOE’s interest rate decision ahead as well.
  • JPY: JPY drops as trade optimism comes back after Phase One Deal is signed
  • EUR: Eurozone’s CPI, Consumer Confidence, Manufacturing and Services PMI, Germany’s PPI, IFO Business Climate and GFK Consumer Confidence Survey numbers in focus
  • AUD: AUD could strengthen, backed up by trade optimism

CURRENCY: USD

USD edged lower this week as Fed has announced no change in its policy stance. In the Fed statement, the removal of ‘uncertainties’ in the outlook further reinforced the idea that the bar to cut rates has been set higher.

Washington and Beijing agreed to a first phase of a broader trade deal on Friday that will see China boost imports, including of American agricultural products, and the U.S. halving duties on $120 billion of Chinese goods. This brings back green shoots of economic recovery to the market and could strengthen up USD. On the data front, this week we will have important data releases including Flash Manufacturing PMI and Final Q3 GDP.

CURRENCY: GBP

Sterling extended its rally on optimism that a speedy resolution to the Brexit deadlock is in store after the Conservative Party’s election victory. The currency edged higher as Chief Secretary to the Treasury Rishi Sunak said that the government plans to put its Brexit legislation before Parliament before Christmas to ensure that the country will leave the EU as planned at the end of January.

Looking ahead, on the data front, investors will be keeping a close watch on the Markit Manufacturing and Services PMI data, employment numbers as well as the CPI, PPI, Retail Sales and GDP data which could put a damp on the recent optimism should the numbers missed estimates. This week will also see BOE’s interest rate decision as well. That said, any impact from the data is likely to be short-lived as the focus remains on Brexit’s developments.

CURRENCY: JPY

The Japanese Yen was the biggest loser this week, as encouraging news related to the US-China trade war spurred risk-appetite. Wall Street rallied to record highs after good news from the trade front.

Washington and Beijing agreed to a first phase of a broader trade deal on Friday that will see China boost imports, including of American agricultural products, and the U.S. halving duties on $120 billion of Chinese goods.

The U.S. has also delayed levies that were due to be imposed on Sunday, and China said it will suspend additional tariffs on certain American imports. This week we will have the BoJ meeting due, where no change is expected. The market is waiting for more progress and details after Beijing and Washington signed the Phase 1 Deal, as the optimism continues, JPY could continue the drop.

CURRENCY: EUR

EUR rallied against the greenback last week on a broad dollar weakness, while riding on the EUR strength as the ECB increased its CPI forecast and was more optimistic about the slowdown in the Eurozone bottoming out.

Looking ahead, on the data front, investors will be keeping a close watch on the Eurozone’s CPI, Consumer Confidence, Manufacturing and Services PMI data as well as Germany’s PPI, IFO Business Climate and GFK Consumer Confidence Survey numbers where anticipation for these data could fuel the currency’s rally. Besides, now that the US-China phase one trade deal agreement is reached, the improved market risk sentiment could prop the EUR higher.

CURRENCY: AUD

AUD carried it’s upwards momentum over from the previous week into last week. The upwards push of the AUD was helped when the US Fed announced a dovish policy decision, leaving interest rates unchanged.

Further, the AUD also climbed greatly as US president Trump signed off on a so-called phase one trade deal with China coupled with UK Prime Minister Boris Johnson showing a decisive win in the UK election. This week, we would have key economic data release coming up for both the AUD such as ANZ business confidence, Employment change. AUD could strengthen up as optimism over China’s growth is picking up.

Find out more at AxiTrader here.

The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.

The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

 

 

Read this next

Digital Assets

SEC bypassed commission vote in approving Ethereum ETFs

The Securities and Exchange Commission’s (SEC) Trading and Markets Division has approved several spot Ethereum exchange-traded funds (ETFs) using delegated authority, rather than a vote by the full commission.

blockdag

BlockDAG Presale Draws Massive $32.4M Hinting At its 30,000x ROI Potential, Overshadowing Retik Finance at Bitmart

Learn why BlockDAG’s innovative strategies and $32.4M presale success are making millionaires, overshadowing Retik Finance’s struggle on Bitmart.

Institutional FX

Malaysia’s exchange launches API for onboarding retail investors

“The Exchange actively listens to the evolving needs of our customers. This initiative is key in delivering on our commitment towards greater customer-centricity. We will continue to work closely with our POs and introduce service innovations to attract more investors, bolstering the competitiveness of our market.”

Fintech, Uncategorized

LiquidityBook welcomes JonesTrading to LBX Post-Trade Hub

“As we near the T+1 deadline, we are excited to continue helping firms achieve straight-through processing in addition to delivering new enhancements to our comprehensive range of cloud-native buy- and sell-side trading solutions.”

blockdag

Should I Invest Today? Which Altcoins Could Make 2-5X Profits Amid the Latest News?

Investing in cryptocurrencies can be a journey full of surprises, given their volatile nature.

Executive Moves

Bakkt promotes Ray Kamrath to CCO of Crypto

Bakkt has promoted Ray Kamrath to Chief Commercial Officer of the company providing custody, trading, and onramps to the crypto space.

Industry News, Uncategorized

HSBC relocates US headquarters to The Spiral, New York

HSBC has opened its new U.S. headquarters at The Spiral, a renowned office building in New York City’s Hudson Yards neighborhood.

blockdag

Best Cryptos to Buy Before the Real Bull Run Kicks Off

With the bull run of 2024 already underway, investors are eager to identify cryptocurrencies that promise significant growth.

Market News

This time is different – is it?

The stock market wants lower interest rates – or rather, it has been expecting them for months. Justified? The US economy looks very robust, so higher interest rates would actually be the order of the day.

<