Forex Weekly Outlook – August 14-18 2017

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The US dollar has stabilized after staging the comeback. What’s next? The Fed’s meeting minutes, US retail sales and consumer confidence stand out in the US and there are plenty of figures elsewhere. Here are the highlights for the upcoming week.

Initially, the US dollar enjoyed the momentum from the NFP. This was compounded with the upbeat JOLTs report. However, the poor PPI numbers already hurt the greenback and so did the mediocre CPI figures. The crisis around North Korea and the war of words hurt the greenback against the yen and the franc, while it boosted the USD against commodity currencies. Is the crisis overblown? Let’s start:

Updates:
  1. Japanese GDP: Sunday, 23:50. Early in the week, Japan releases its early estimate of GDP growth. In Q1, the economy grew by only 0.3% according to the final read. A slightly stronger figure is expected now: 0.6% q/q and 2.5% y/y.
  2. Chinese industrial output: Monday, 2:00. The world’s No. 2 economy influences all the world. Industrial production beat expectations in June with a y/y growth rate of 7.6%, providing an encouraging sign. A more modest rate of 7.2% is on the cards now.
  3. German GDP: Tuesday, 6:00. The largest economy in Europe enjoyed a quarterly growth rate of 0.6%, in line with European growth in that quarter. We already have an initial number for euro-zone GDP in Q2, but it did not take the German economy into account. We will now see how Germany fared. A robust growth rate of 0.7% is projected.
  4. UK inflation data: Tuesday, 8:30. Brexit sent the pound lower and in turn, prices are rising and triggered talk of a rate hike by the BOE. However, the recent slide to 2.6% and some doubts from the BOE trigger doubts if we will see a rate hike anytime soon. CPI is key for the next moves of Sterling. Headline CPI is expected to rise by 2.7% y/y.
  5. US retail sales: Tuesday, 12:30. The US economy leans heavily towards consumption. In June, all measures of retail sales disappointed: headline sales dropped by 0.2% and so did core sales. Will we see a rebound this time? The report for July will also shape GDP growth expectations for Q3. Headline retail sales are predicted to rise by 0.3% while core sales carry expectations for 0.4% and so does the control group.
  6. US housing data: Wednesday, 12:30. Building permits are on the rise, reaching an annualized level of 1.28 million in June. A small slide to 1.24 million is expected. Housing starts also look good with 1.22 million and a repeat is on the cards. For a meaningful reaction, we would need both measures to go in the same direction.
  7. FOMC Meeting Minutes: Wednesday, 18:00. These are the minutes from the July decision. The Fed tried not rocking the boat, avoiding any hints about another rate hike this year and the statement was eventually perceived as dovish. As the meeting was not accompanied by a press conference, the meeting minutes will provide further insights into the Fed’s thinking.
  8. Australian jobs report: Thursday, 1:30. After a few superb months, Australia saw a “normal” jobs report with 14K jobs gained. The unemployment stood at 5.6% in June. Full-time jobs were gained while part-time jobs were lost, adding a silver lining to the report. We now get the figures for July.
  9. US Philly Fed Manufacturing Index: Thursday, 12:30. This early indicator of the manufacturing sector disappointed with a drop to 19.5 points in July. The fresh data for August will be interesting to watch. Jobless claims are released at the same time, but they have been too stable of late. A score of 18.5 is forecast.
  10. US consumer confidence: Friday, 14:00. Friday, 14:00. The last word of the week belongs to the preliminary release of consumer confidence from the University of Michigan. According to the final figures for July, consumer confidence slipped to 93.4 points, offf the highs. A similar number is on the cards now: 94 points.

*All times are GMT

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About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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