SMATS FX is proud to provide our weekly analysis of currency markets and exchange rates.
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USD |
The first full trading week of the year will be keeping the USD active with several top-tier data reports. Topping the chart this week is the non-farm payrolls on Friday, after shooting up to 266k in November, we expect to see 168k increase for December. Along with that the unemployment rate is expected to remain at 3.5%. Tuesday sees the release of the ISM non-manufacturing PMI, we expect the December figure to improve from 53.9 to 54.5. US-Iran tensions are also likely to impact the USD as Iran have come out to say that they are no longer tied by the 2015 nuclear deal following last week’s attack on the Iran military commander.
Influences on HKD, SGD & AED The AED has no real data to speak of in the upcoming week, but they can expect to see some movement inline with US Dollar movements. Singapore will be releasing their retail sales on Friday, we expect to see an increase from -2.2% to 2.5% for November, which should drive the SGD higher. The HKD will be releasing their foreign exchange reserves for December, which should be largely unchanged at HK$ 435 B.
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AUD |
A couple of top-tier data reports out of Australia is likely to drive the Aussie Dollar this week. On Thursday, the trade balance is set to see its surplus narrowed down from A$4.5 B to A$4.2 B while exports are expected to fall by 5%. The retail sales, which is set to be released on Friday, has been forecast to increase by 0.4% after the previous reading saw a flat reading, which dragged the AUD down. |
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NZD |
Kiwi traders will have to look out for global catalysts in the absence of any major reports out of New Zealand. The Australian data is likely to impact the Kiwi Dollar along with the US employment data out on Friday. As it is the first full trading week of the year, we can expect to see some volatility across the board as traders’ price in last week’s major points. |
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EUR |
The Euro will have several low-impact data releases this week, German retail sales rebounded from -1.3% in October to 2.1% in November, allowing the Euro to gain during Monday’s session. The Euro zone’s flash CPI is expected to increase by 0.3% to 1.3% while the core figure is expected to remain at 1.3% for December. With the Euro typically making the most of risk-off flows, we can expect to see some Euro strength in the coming weeks with traders hesitant to buy the safe-haven Dollar. |
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GBP |
The Pound Sterling doesn’t have many major hard-hitting data releases this week, but we will have a look into their final services PMI numbers on Monday, it is expected to climb to 49.1 from 49.0. We will begin the year like we ended the last with Brexit-related updates driving the Sterling’s strength as Boris Johnson and EC President Von Der Leyen meet on Wednesday to discuss the transition deal in further detail. |
