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Weekly Market View

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Fishing In Troubled Waters

Fri, Aug 8 2008, 12:56 GMT
by Tatsuya Kawanishi

FXstreet.com

Last week 3 central banks: FRB, BoE and ECB decided to hold the ongoing interest rates at 2.00%, 5.00% and 4.25% respectively. The BoE has held the rate at 5.00% for four-months running. The MPC did show a concern about a serious recession in the U.K. We have been seeing the global economy steadily deteriorate into a slump. Major central banks might consider to cut interest rates followed by the FRB. Indeed, the Reserve Bank of New Zealand cut the interest rate by 25 bps in July. The Reserve Bank of Australia also showed a dovish outlook that the RBA would make consideration of future rate cut. As each country shows their dovish stance and negative economic data, the USD has been relatively appreciated against European currencies and Asia-Pacific currencies. The EUR/USD dropped over 400 pips while the AUD/USD fell from 0.9347 to 0.8897 in a week. The JPY crosses have shown big movements as well. The EUR/JPY has got back into the 165.00 region.

Next week several explosive events are lined up. We can not afford to miss any of them. Alright! Let's review them all!

On Sunday (Aug 10th) we have the following events to watch:

• There is no significant event on Sunday.

On Monday (Aug 11th) we have the following events to watch:

• In Australia, RBA Monetary Policy Statement is released at 01:30 GMT. Be aware of AUD/USD traders.
• In the U.K. PPI Input, PPI Output. Trade Balance and RBC Retail Sales Monitor are remarkable events to monitor.

On Tuesday (Aug 12th) we have the following events to watch:

• In Australia, NAB Business Confidence (Previous -9) should be taken into account.
• In Japan, Industrial Production and Household Confidence (Previous 32..6) are notable events to follow.
• In the U.K. CPI, Core CPI, and RPI are notable events to watch.
• In Canada, Trade Balance is to be taken into account.
• In the U.S. Trade Balance is released at 12:30 GMT.
• In New Zealand, PPI Input (Previous 2.3%) and PPI Output (Previous 1.8%) are released at 22:45 GMT.
• In Japan, GDP and Current Account (Previous 2.03T) are important events to monitor.

On Wednesday (Aug 13th) we have the following events to watch:

• In Australia, WMI Consumer Sentiment (Previous -6.7% ) is scheduled at 00:30 GMT.
• In the UK, Average Earnings Index and Unemployment Rate are remarkable events to follow.
• In the Euro Zone, Industrial Production (Previous -1.9%) is to be taken into account.
• In the U.K. BoE Inflation Report is released at 09:30 GMT.
• In Japan, Tertiary Industry Activity Index (Previous -0.2%) is scheduled at 23:50 GMT.

On Thursday (Aug 14th) we have the biggest day of the week with the following events:

• In New Zealand, Business Manufacturing Index is released at 00:00 GMT. Later on, Retail Sales and Core Retail Sales are scheduled at 22:45 GMT.
• In Switzerland, Consumer Climate (Previous 2) is scheduled at 05:45 GMT.
• In Germany, GDP and CPI are notable events to follow.
• In the Euro Zone, CPI, Core CPI and GDP are released all together at 09:00 GMT.
• In the U.S. CPI and Core CPI are remarkable events to watch.

On Friday (Aug 15th) we have the following events to watch:

• In Canada, manufacturing Shipments (Previous 2.7%) is released at 12:30 GMT.
• In the U.S. These remarkable events such as Empire State Manufacturing Index, TIC Net Long -Term Transactions (Previous 67.0B), Industrial Production, and Michigan Consumer Sentiment are released. The events would generate high volatility for the USD against the other majors.

Published on  Fri, Aug 8 2008, 12:58 GMT