Weekly Forex Forecast: 2nd to 6th February
The major event of last week was the monthly FOMC which saw the Fed members committed to hiking interest rates any time after April, despite a slew of weaker than expected economic data. The US Dollar managed to find renewed bids on the positive outlook of the Fed despite a weaker Q4 2-14 GDP growth. The Euro was strong for most of last week despite the weekend Greece election outcome that saw the new Syriza party form the government.
For the most of last week, the commodity risk currencies were weaker while the Euro, Sterling, and Yen managed to trade stronger. The Greenback was mostly mixed, opening last week on a weaker note but managing to close modestly higher than the intraweek lows.
Fundamentals for the Week 2 – 6 Jan
| Date | Event | Estimates |
| 2 February | Japan Final Manufacturing PMI | 52.1 |
| China HSBC final manufacturing PMI | 49.8 | |
| Spain manufacturing PMI | 54.2 | |
| Italy manufacturing PMI | 49.3 | |
| Eurozone Final Manufacturing PMI | 51.0 | |
| UK manufacturing PMI | 52.9 | |
| US Core PCE price index m/m | 0% | |
| US Personal Spending m/m | -0.1% | |
| US Final Manufacturing PMI | 54.1 | |
| US ISM manufacturing PMI | 54.9 | |
| US Construction spending m/m | 0.9% | |
| 3 February | Australia building approvals m/m | -4.8% |
| RBA Cash rate | 2.5% | |
| RBA statement | – | |
| UK construction PMI | 56.9 | |
| Italy Prelim CPI m/m | 0.1% | |
| Eurozone PPI m/m | -0.7% | |
| New Zealand Global dairy prices | – | |
| US Factory orders m/m | -1.8% | |
| New Zealand employment change q/q | 0.8% | |
| New Zealand unemployment rate | 5.3% | |
| 4 February | RBNZ Governor Wheeler Speech | – |
| Spain services PMI | 54.5 | |
| Italy services PMI | 49.9 | |
| UK services PMI | 56.6 | |
| Eurozone retail sales m/m | -0.1% | |
| ADP Nonfarm payroll change | 221k | |
| US Final services PMI | 54.3 | |
| Canada Ivey PMI | 55.9 | |
| US ISM non-manufacturing PMI | 56.6 | |
| 5 February | Australia retail sales m/m | 0.3% |
| German factory orders m/m | 1.4% | |
| BoE Official bank rate | 0.5% | |
| Canada trade balance | -1bn | |
| US trade balance | -38.0bn | |
| 6 February | RBA monetary policy statement | – |
| German industrial production m/m | 0.4% | |
| Canada building permits m/m | 4.5% | |
| Canada unemployment change | 5.1k | |
| Canada unemployment rate | 6.7% | |
| US nonfarm payrolls | 231k | |
| US unemployment rate | 5.6% |
Currencies/Events to Watch this Week
Euro: With no major news releases scheduled for the week ahead, the Euro is likely to be susceptible to the political events unfolding out of Greece. For the most part, CPI and manufacturing, services PMI data is due, but the markets are likely to shrug off the data in the event the headline prints fall below estimates on account of the ECB’s QE.
US Dollar: The main event of the week will be the US nonfarm payroll data and the unemployment rate, both of which if positive could help sustain the Dollar Index’s rally. Besides the NFP other data includes factory orders and PMI’s.
British Pound: The British sterling will be looking for the monthly services, manufacturing and construction PMI data for the week ahead. The BoE interest rate decision is also scheduled for this week, but it is highly unlikely that we will get to see any change from last month’s monetary policy outcome.
Yen: With no major news releases due for the week, the Yen is likely to remain subdued based on how the events of the week unfold.
Australian Dollar: After the surprise rate cut from Canada and a neutral statement from the RBNZ, all eyes will be on Australia this week as the RBA meets for its first monetary policy meeting for this year. While consensus has been pricing in a rate cut later this year, the RBA has been staunchly ruling out the rate cuts. While the chances of a change in interest rates is low in this first meeting, the statement could potentially shed light into future timetable for interest rate adjustments from the RBA.
FX Majors Weekly Pivots
| R3 | R2 | R1 | Pivot | S1 | S2 | S3 | |
| EURUSD | 1.1766 | 1.1593 | 1.1442 | 1.1269 | 1.1118 | 1.0945 | 1.0793 |
| GBPUSD | 1.5437 | 1.533 | 1.5202 | 1.5095 | 1.4968 | 1.486 | 1.4733 |
| USDCAD | 1.3289 | 1.3042 | 1.2872 | 1.2625 | 1.2455 | 1.2208 | 1.2033 |
| USDJPY | 119.69 | 119.173 | 118.289 | 117.772 | 116.888 | 116.371 | 115.487 |
