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Weekly Overview 10th-14th February 2020

Simon Alagbe


Monday 10th February 2020

There will be very little on the fundamental front today and the market is expected to continue in the sentiment generated as a result of the various economic data released on Friday.

USD: The dollar is expected to continue on the front foot as the data released on Friday confirmed a booming economy. The Bureau of Labour statistics revealed that 225k jobs were created in the month of January excluding the farming industry as average hourly earnings narrowly missed forecast. 

CAD: The Loonie has been under pressure in recent times, as the price of Oil continues to fall. The Job data released on Friday gave a glimpse of hope for the commodity supported currency, but the respite may not be sufficient to boost the currency owing to the bearish pressure on Oil. 

GBP: The Cable has lived below expectations in recent times as the impact of Brexit lingers. Britain is currently in a transition period till the 31st of December except they an approval for an extension of up to 2 years is given before July this year. 

Tuesday 11th February 2020

JPY: Banks in Japan will be closed on this day in observance of National Foundation Day. This is expected to affect volatility as liquidity of the Yen will be affected.

GBP: Cable traders should be on the lookout for the prelim GDP q/q data to be released by the country’s Office for National Statistics. The data in recent times has fallen short of expectations and a repeat of such will wane on the Queen's currency.

USD: The attention of traders will shift to the testimony of the Chairman of the Federal Reserve Bank by 4 pm as he testifies before the House Financial Services Committee, in Washington DC. He is expected to provide more insight into the monetary policy decision of the bank. Any sight of hawkishness in his speech is expected to lend further strength to the Greenback.

Wednesday 12th February 2020

AUD: The Reserve Bank of Australia will be at the forefront on this day as they will make available to the public the Official Cash Rate (the interest rate at which banks lend balances held at the RBNZ). The easing bias from the bank is expected to return to neutral but New Zealand’s economy has not been helped by the current viral situation in China. The country earns foreign exchange from forest products to China. If the bank keeps rate constant and the subsequent speech by the Governor, Adrian Orr sounds hawkish the Kiwi is envisaged to regain some lost ground against other major currencies. 

USD: The testimony of Federal Reserve Chair Powell continues before the Senate Banking Committee by 4 pm. 

OIL: OPEC and its allies have been meeting on how to stabilize the price of Oil, but Russia is standing against Saudi’s proposal to cut output by 600,000 barrels a day. With the current glut in the market pushing prices lower, Oil traders should look out for Crude Oil inventories to be released by the Energy Information Administration. A positive change(increase) in the number of barrels of crude oil held in the inventory of commercial firms will give more room to the bears. The only ray of light is the discovery of 2 drugs Abidol and Darunavir in the treatment of the coronavirus. If WHO makes public that the drug is efficacious in the treatment of the Virus then operation will fully resume in China and Oil demand will receive a boost.

AUD: The Reserve Bank of Australia rounds up the trading session as the Governor, Adrian Orr testifies before the Finance and Expenditure Select Committee, in Wellington. He is expected to provide insight into the monetary policy decisions of the bank. 

Thursday 13th February

AUD:  Philip Lowe, the Governor of the Reserve Bank of Australia opens the session as he participates in a panel discussion at the 7th Australia-Canada Economic Leadership Forum, in Melbourne. He is expected to respond to questions raised by participants. A positive outlook of the economy from his answers will strengthen the Aussie. 

USD: Inflation data, as well as Jobless claims data, is expected to be released by 2:30 PM. The CPI data is a very important indicator of the economy and helps the Central Bank in their decision to either hike or reduce rate. 

Friday 14th February

There is no better way to celebrate this special day than to take advantage of the data set to be released. 

EUR: Prelim GDP q/q is expected from the Euro Zone powerhouse by 8 am. Germany is responsible for over 28% of economic activity in the eurozone and any data from the country has a stronghold on the common currency (Euro). A positive GDP data will be a boost for the Fibre i.e. any figure above the 0.2% forecast will strengthen the Euro. 

USD: The Greenback round off the week with the expected Retail Sales Data and Core Retail Sales Data. The figures released last month were impressive and a repeat of such will aid the strength of the Greenback.

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