Weekly Forex Preview: 29 September – 03 October

The last full trading week of the month of September saw the Forex markets driven by Central bank speeches and some fundamental data. Commodity risk currencies were mixed across the board with the Aussie and Kiwi dollar succumbing to verbal interventions by their respective central bank governors. The US Dollar found renewed strength as it continued its bullish trend through the week.

Eurozone Fundamentals

PMI’s from Germany and France continued to be mixed weighing in on the Euro which was weakest against the Greenback. There has been a lot of talk coming out of the ECB which is raising expectations that Mario Draghi will likely lay out the plans for the ECB’s ABS purchases during the ECB press conference this week. In terms of change of policy, interest rates are expected to remain unchanged.

Canadian Data Mixed

Retail sales slumped declining -0.6% while headline retail sales saw a softer decline by -0.1%. The Canadian Dollar was mixed gaining against the Aussie but losing ground to the Greenback. Against the Euro, the CAD was mostly flat.

USD Fundamentals refreshes the Bulls!

The US Dollar was supported by a broad better than expected fundamental data during the week, with the exception of core durable goods orders which declined on the backdrop of a weaker aircraft purchases. That said, the revised Q2 GDP was in line with expectations posting a 4.6% growth as called for.

Key Events: 22 - 26 September

• China HSBC Flash Manufacturing PMI softly higher at 50.5 v/s 50.0 estimates

• Eurozone Flash manufacturing PMI 50.5 v/s 50.6 Flash services PMI 52.8 v/s 53.2

• Canada Core retail sales m/m -0.6%, headline sales -0.1%.

• German Ifo business climate falls further to 104.7

• US Core durable goods orders 0.7% unchanged, core durable goods orders decline -18.2%

• US Flash services PMI declines 58.5 v/s 59.4

• Japan core CPI y/y 3.1%

• US Q2 Final GDP 4.6%

Fundamentals for the Week 29 September – 03 October