Weekly Outlook: 2014, July 13 - 20

USD/CAD weekly outlook: July 14 - 18

The Canadian dollar fell to two-week lows against the U.S. dollar on Friday after unexpectedly weak domestic employment data indicated that the country’s central bank will leave rates on hold at its upcoming policy meeting.

USD/CAD advanced 0.77% to 1.0731 late Friday, the highest since June 25.

The pair is likely to find support at 1.0629, Friday’s low and resistance at around the 1.0775 level.

Statistics Canada reported that the economy lost 9,400 jobs last month, compared to expectations for jobs growth of 20,000. The Canadian unemployment rate ticked up to 7.1% from 7.0% in May, against expectations of an unchanged reading.

The poor data fuelled expectations that the Bank of Canada will leave rates unchanged at 1.0% at Wednesday’s meeting and stick to its dovish stance on monetary policy.

The loonie, as the Canadian dollar is also known, had rallied in recent weeks as economic reports indicated that the recovery was improving. The U.S. dollar struck its 2014 low of 1.0619 against the Canadian dollar on July 3.

In the U.S. Wednesday’s minutes of the Federal Reserve’s latest meeting indicated that interest rates are unlikely to rise soon.

The minutes of the central bank’s June meeting showed that officials agreed to end the bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.

Officials said policy depends most “on the evolution of the economic outlook.”

In the week ahead, investors will be watching testimony on monetary policy by Federal Reserve Chair Janet Yellen, while the BoC’s rate statement will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, July 15

• The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

• The BoC is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank will hold a press conference following the announcement.
• Canada is also to release data on manufacturing sales.
• The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

• Canada is to produce data on foreign securities purchases.
• The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

• Canada is to release data on consumer process and wholesale sales.
• The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

USD/CHF weekly outlook: July 14 - 18

The U.S. dollar ended the week lower against the traditional safe haven Swiss franc as the Federal Reserve’s dovish stance on rates and fresh fears over the risk of contagion in Europe’s banking sector weighed.

USD/CHF was at 0.8922 late Friday, ending the week with losses of 0.31%.

The pair is likely to find support at the 0.8900 level and resistance at 0.8960.

The dollar fell to one week lows against the Swiss franc on Thursday, before recovering, as concerns over the fiscal stability of Portugal’s largest lender Banco Espirito Santo fuelled a sharp selloff in markets, amid fears over the risk of contagion.

Concerns eased after Portugal’s central bank said Friday it was satisfied that the bank is able to fulfill its capital requirements.

The dollar remained under pressure after the minutes of the Federal Reserve’s latest meeting indicated that interest rates are unlikely to rise soon.

Wednesday’s minutes of the central bank’s June meeting showed that officials agreed to end the bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.

Officials said policy depends most “on the evolution of the economic outlook.”

In the week ahead, investors will be watching testimony on monetary policy by Federal Reserve Chair Janet Yellen. Switzerland is to release data on economic expectations and producer prices.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, July 15

• Switzerland is to release data on producer price inflation.
• The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

• The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
• The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

• The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

• The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

USD/JPY weekly outlook: July 14 - 18

The U.S. dollar ended the week lower against the yen on Friday as signs that U.S. rates will remain on hold for longer and renewed concerns over the European banking sector bolstered demand for the safe haven Japanese currency.

USD/JPY was at 101.34 late Friday, almost unchanged for the day, holding above Thursday’s almost two-month lows of 101.05. For the week, the pair dropped 0.75%.

The pair is likely to find support around the 100.00 level and resistance at 101.65, Thursday’s high.

The dollar touched a two-month trough against the yen on Thursday as concerns over the fiscal stability of Portugal’s largest lender Banco Espirito Santo fuelled a sharp selloff in markets, amid fears over the risk of contagion.

Concerns eased after Portugal’s central bank said Friday it was satisfied that the bank is able to fulfill its capital requirements.

The dollar remained under pressure after the minutes of the Federal Reserve’s latest meeting indicated that interest rates are unlikely to rise soon.

Wednesday’s minutes of the central bank’s June meeting showed that officials agreed to end the bank’s asset purchase program in October, but revealed little new information on when rates could start to increase. Officials said policy depends most “on the evolution of the economic outlook.”

Elsewhere, EUR/JPY was at 137.90 late Friday, holding above Thursday’s five month lows of 137.48. For the week, the pair was down 0.62%.

In the week ahead, investors will be watching testimony on monetary policy by Federal Reserve Chair Janet Yellen. Tuesday’s monetary policy announcements by the Bank of Japan will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, July 15

• The BoJ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank will hold a press conference following the announcement.
• The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

• The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

• The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

• The BoJ is to publish monetary policy meeting minutes, which contain valuable insights into economic conditions from the bank’s perspective.
• The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

AUD/USD weekly outlook: July 14 - 18

The Australian dollar ended the week higher against its U.S. counterpart on Friday, amid signs that U.S. interest rates will remain on hold for an extended period of time.

AUD/USD hit 0.9455 on Thursday, the pair’s highest since July 2, before subsequently consolidating at 0.9392 by close of trade on Friday, down 0.02% for the day but 0.28% higher for the week.

The pair is likely to find support at 0.9360, the low from July 10 and resistance at 0.9455, the high from July 3.

The U.S. dollar came under pressure earlier in the week, after Wednesday’s minutes of the Federal Reserve’s June meeting indicated that interest rates are unlikely to rise soon.

The minutes showed that officials agreed to end the central bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.

Meanwhile, in Australia, official data released Thursday showed that the number of employed people rose by 15,900 in June, above expectations for an increase of 12,000.

The report also showed that Australia's unemployment rate rose to 6.0% last month from 5.9% in May. Analysts had expected the rate to remain unchanged at 5.9% in June.

In the week ahead, investors will be watching testimony on monetary policy by Fed Chair Janet Yellen, as well as key data on U.S. June retail sales.

Market players will also look ahead to a raft of Chinese economic data this week, including reports on second quarter gross domestic product, industrial production and retail sales.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, July 15

• The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
• The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

• China is to publish data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health. The country is also to publish reports on industrial production and fixed asset investment.
• The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

• Australia is to release private sector data on leading economic indicators and business confidence.
• The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

• The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

NZD/USD weekly outlook: July 14 - 18

The New Zealand dollar ended Friday’s session close to a three-year high against its U.S. counterpart, amid indications the Federal Reserve is in no rush to raise interest rates.

NZD/USD hit 0.8835 on Thursday, the pair’s highest since August 1, 2011, before subsequently consolidating at 0.8816 by close of trade on Friday, down 0.07% for the day but 0.86% higher for the week.

The pair is likely to find support at 0.8780, the low from July 9 and resistance at 0.8835, the high from July 10.

The U.S. dollar came under pressure after Wednesday’s minutes of the Federal Reserve’s June meeting indicated that interest rates are unlikely to rise soon.

The minutes showed that officials agreed to end the central bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.

Meanwhile, the kiwi was boosted after ratings agency Fitch raised New Zealand’s credit outlook to positive from stable on Tuesday and reaffirmed the country's AA rating.

In the week ahead, investors will be watching testimony on monetary policy by Fed Chair Janet Yellen, as well as key data on U.S. June retail sales.

Market players will also look ahead to a raft of Chinese economic data this week, including reports on second quarter gross domestic product, industrial production and retail sales.

Tuesday, July 15

• The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

• New Zealand is to release data on consumer inflation.
• China is to publish data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health. The country is also to publish reports on industrial production and fixed asset investment.
• The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

• The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

• The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

GBP/USD weekly outlook: July 14 - 18

The pound slipped lower against the dollar on Friday after weak U.K. construction data but remained supported above the 1.71 level, not far from almost six-year highs.

GBP/USD slid 0.15% to 1.7106 late Friday, to end the week down 0.27%.

Cable is likely to find support at 1.7050 and resistance at 1.7178, the high of July 4 and the most since October 2008.

Sterling moved lower after data showed that U.K. construction output fell 1.1% in May, the biggest decline since February. On a year-over-year basis, output was still up 3.5%.

The report came after data earlier in the week showed that manufacturing production in the U.K. fell 1.3% in May, the fastest decline in 16 months.

The weak data prompted investors to pare back long positions on the pound, but losses were held in check as the negative reports did little to alter expectations that the Bank of England will hike interest rates before the end of the year.

The BoE left rates on hold at 0.5% following its policy meeting on Thursday, as widely expected, and kept the size of its asset purchase program unchanged at 375 billion.

In the U.S., Wednesday’s minutes of the Federal Reserve’s latest meeting indicated that interest rates are unlikely to rise soon.

The minutes of the central bank’s June meeting showed that officials agreed to end the bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.

Officials said policy depends most “on the evolution of the economic outlook.”

In the week ahead, investors will be watching testimony by Federal Reserve Chair Janet Yellen and BoE Governor Mark Carney. U.K. data on inflation and employment will also be in focus.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.

Tuesday, July 15

• The U.K. is to release private sector data on retail sales, as well as a report on consumer price inflation.
• BoE Governor Mark Carney is to testify on the bank’s financial stability report to parliament’s Treasury committee.
• The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

• The U.K. is to publish data on the change in the number of people employed and the unemployment rate, as well as data on average earnings.
• The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

• The U.S. is to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

• The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

EUR/USD weekly outlook: July 14 - 18

The euro was almost unchanged against the dollar on Friday as concerns over a major Portuguese lender eased, curbing safe haven demand for the greenback.

EUR/USD was at 1.3606 late Friday, little changed for the day.

The pair was likely to find support at 1.3575 and resistance at 1.3650, Thursday’s high.

Worries over the fiscal stability of Portugal’s largest lender, Banco Espirito Santo, fuelled a sharp selloff in markets on Thursday, amid fears over the risk of contagion.

Concerns eased after Portugal’s central bank said Friday it was satisfied that the bank is able to fulfill its capital requirements.

The single currency remained under pressure as a slew of weak economic data on Thursday fuelled concerns over the outlook for the recovery in the region.

Italy's industrial output unexpectedly fell 1.2% in May, official data showed. Meanwhile, French industrial production plunged 1.7% in May and inflation rose by just 0.6%, the lowest level since November 2009.

The dollar fell to one week lows against the euro earlier in the week after Wednesday’s minutes of the Federal Reserve’s latest meeting indicated that interest rates are unlikely to rise soon.

The minutes of the central bank’s June meeting showed that officials agreed to end the bank’s asset purchase program in October, but revealed little new information on when rates could start to increase.

Officials said policy depends most “on the evolution of the economic outlook.”

In the week ahead, investors will be watching testimony on monetary policy by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, July 14

• The euro zone is to release data on industrial production.
• ECB President Mario Draghi is to testify on monetary policy to the Committee on Economic and Monetary Affairs of the European Parliament. His comments will be closely watched.

Tuesday, July 15

• The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
• The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release data on import prices, business inventories and manufacturing activity in the Empire state.

Wednesday, July 16

• The U.S. is to release reports on producer price inflation and industrial production. Meanwhile, Fed Chair Janet Yellen Carney is to testify on monetary policy to the House financial committee.

Thursday, July 17

• The euro zone is to release data on consumer prices.
• The U.S. to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

Friday, July 18

• The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment.

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