Weekly Outlook: 2014, September 14 - September 21

NZD/USD weekly outlook: September 15 - 19

The New Zealand dollar tumbled to a seven-month low against its U.S. counterpart on Friday, amid speculation Federal Reserve policy makers could adopt more hawkish language at their meeting next week.

NZD/USD hit 0.8143 on Friday, the pair’s lowest since February 4, before subsequently consolidating at 0.8152 by close of trade on Friday, down 0.38% for the day and 2.11% lower for the week.

The pair is likely to find support at the 0.8100 level and resistance at the 0.8200 level.

The dollar remained well bid after a study by the San Francisco Federal Reserve suggested that investors' expectations for rate hikes lag those of the Fed.

The research published on September 8 underlined expectations that the Fed could signal a rate hike at its policy meeting next week, possibly by omitting mention of its commitment to keep rates low for a "considerable time".

Upbeat U.S. economic data on Friday underlined optimism over the strength of the economy.

In a preliminary report, the University of Michigan said its consumer sentiment index rose to a 14-month high of 84.6 this month, from a reading of 82.5 in August.

The data came after a government report showed that U.S. retail sales rose 0.6% last month, in line with expectations.

Meanwhile, in New Zealand, the Reserve Bank of New Zealand left interest rates unchanged at 3.5% in a widely expected move on September 11.

The central bank also signaled that it will keep interest rates on hold for a longer period of time after lowering inflation forecasts to 1.4% in the 12 months ending March 31, down from the 1.8% forecast in June.

Commenting on the decision, RBNZ Governor Graeme Wheeler said "it is prudent to undertake a period of monitoring and assessment before considering further policy adjustment."

Wheeler also said he expects "a further significant depreciation" in the New Zealand dollar.

Data from the Commodities Futures Trading Commission released Friday showed that speculators decreased their bullish bets on the New Zealand dollar in the week ending September 9.

Net longs totaled 10,172 contracts, down slightly from net longs of 11,841 in the preceding week.

In the week ahead, investors will be focusing on the outcome of Wednesday’s Fed policy meeting. Fed Chair Janet Yellen was to hold a press conference following the meeting.

The central bank was expected to cut its asset purchase program by another $10 billion, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

Monday, September 15

• The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.

Tuesday, September 16

• The U.S. is to produce data on producer price inflation.

Wednesday, September 17

• New Zealand is to publish data on the current account.
• The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.

Thursday, September 18

• New Zealand is to publish data on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
• The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.

AUD/USD weekly outlook: September 15 - 19

The Australian dollar slumped to a six-month low against its U.S. counterpart on Friday, after upbeat U.S. economic data underlined optimism over the strength of the economy and fuelled expectations that the Federal Reserve will begin to raise rates sooner than previously thought.

AUD/USD hit a daily low of 0.9031 on Friday, a level not seen since March 20, before subsequently consolidating at 0.9038 by close of trade, down 0.68% for the day and 3.61% lower for the week.

The pair is likely to find support at 0.8994, the low from March 20 and resistance at 0.9107, the high from September 12.

In a preliminary report, the University of Michigan said its consumer sentiment index rose to a 14-month high of 84.6 this month, from a reading of 82.5 in August.

The data came after a government report showed that U.S. retail sales rose 0.6% last month, in line with expectations.

Speculation that the Fed is growing closer to raising interest rates mounted after a study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.

Meanwhile, in Australia, the Australian Bureau of Statistics said Thursday that the country's economy added 121,000 last month, beating expectations for an increase of 12,000.

The report also showed that Australia's unemployment rate ticked down to 6.1% in August from 6.4% in July, compared to expectations for a decline to 6.3%.

Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the Australian dollar in the week ending September 9.

Net longs totaled 49,047 contracts, up from net longs of 41,938 in the preceding week.

In the week ahead, investors will be focusing on the outcome of Wednesday’s Fed policy meeting. Fed Chair Janet Yellen was to hold a press conference following the meeting.

The central bank was expected to cut its asset purchase program by another $10 billion, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

Monday, September 15

• The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.

Tuesday, September 16

• 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 produce data on producer price inflation.

Wednesday, September 17

• The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.

Thursday, September 18

• The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.

GBP/USD weekly outlook: September 15 - 19

The pound moved higher against the dollar on Friday, but gains were held in check as concerns over the prospect of Scottish independence continued to dampen investor demand for the British currency.

GBP/USD was up 0.18% to 1.6267 in late trade, having recovered from the 10-month lows of 1.6050 struck on Wednesday.

Cable is likely to find support at the 1.6050 level and resistance at around 1.6340.

Sterling found support after two new opinion polls on the Scottish independence referendum showed that support for the no campaign was back in the lead ahead of the September 18 referendum.

The pound weakened across the board earlier in the week after another opinion poll indicated that support for Scottish pro-independence voters had gained momentum, fuelling concerns over the prospect of a yes vote.

Uncertainty over what currency an independent Scotland would use, as well as concerns over how much of the U.K. national debt it would take sparked a broad based selloff in sterling.

Speaking Tuesday, Bank of England Governor Mark Carney warned that a currency union between an independent Scotland and the rest of the U.K. would be “incompatible with sovereignty”.

EUR/GBP was up 0.13% to 0.7968 late Friday, off the two month highs of 0.8060 set on Wednesday.

Demand for the dollar continued to be underpinned by expectations for an early hike in U.S. interest rates as investors began turning their attention to the upcoming Federal Reserve policy meeting.

The Fed was expected to cut its asset purchase program by another $10 billion at its meeting on Wednesday, which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

Data on Friday showing that U.S. retail sales rose in August and another report showing that consumer sentiment rose to a 14-month high in September underlined the view that the economic recovery is deepening.

In the week ahead, investors will be closely watching opinion polls ahead of Thursday's Scottish referendum and awaiting Wednesday’s Fed policy announcement. Tuesday’s U.K. inflation report and Wednesday’s jobs report and BoE minutes will also be in focus.

Monday, September 15

• The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.

Tuesday, September 16

• The U.K. is to publish data on consumer price inflation, which comprises the majority of overall inflation.
• The U.S. is to produce data on producer price inflation.

Wednesday, September 17

• 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. In addition, the Bank of England is to release the minutes of its latest policy meeting.
• The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.

Thursday, September 18

• The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Meanwhile, Scotland is to hold its independence referendum.
• The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.

EUR/USD weekly outlook: September 15 - 19

The euro pushed higher against the dollar on Friday, but remained within striking distance of 14-month lows as the prospects of an early hike in U.S. interest rates continued to underpin investor demand for the greenback.

EUR/USD was up 0.33% to 1.2964 late Friday, holding above the 14-month trough of 1.2858 reached on Tuesday.

The pair was likely to find support at the 1.29 level and resistance at around 1.3015.

Expectations that the Federal Reserve is growing closer to raising interest rates continued to support the dollar, with the European Central Bank likely to stick to its looser monetary policy stance.

A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.

The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

Data on Friday showing that U.S. retail sales rose in August and another report showing that consumer sentiment rose to a 14-month high in September underlined the view that the economic recovery is deepening.

The single currency has remained under pressure since the ECB unexpectedly cut rates to record lows on September 4 and unveiled new easing measures in a bid to shore up inflation in the euro area.

The euro rose to two month highs against the weaker yen on Friday, with EUR/JPY up 0.56% in late trade. For the week the pair gained 2.17%.

The yen fell to more than six year lows against the dollar on Friday amid expectations for more stimulus from the Bank of Japan.

BoJ Governor Haruhiko Kuroda said Thursday that the bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.

In the week ahead, investors will be focusing on the outcome of Wednesday’s Fed policy meeting. Fed Chair Janet Yellen was to hold a press conference following the meeting. Tuesday’s report on the ZEW German business sentiment index will also be closely watched.

Monday, September 15

• In the euro zone, Germany’s Bundesbank is to publish its monthly report.
• The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.

Tuesday, September 16

• 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 produce data on producer price inflation.

Wednesday, September 17

• The euro zone is to release revised data on consumer price inflation.
• The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.

Thursday, September 18

• The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.

Economic indicators are reports released by the legislature or a private association that subtleties a nation's economic exhibition. Economic reports are the methods by which a nation's economic well being is directly measured, yet remember that numerous elements and strategies will influence a country's economic exhibition. You may recognize a portion of these economic reports, for example, the joblessness numbers, which are very much advanced. Others, such as lodging details, receive less inclusion. Regardless, every indicator fills a specific need and can be helpful.