Smats FX weekly market report | Monday 10 February 2020

USD 

The Greenback was one of the best performing currencies last week after their sensational jobs data last week. This week we have the inflation data and retail sales due as the headlining data reports out of the US. The annual inflation rate is expected to have ticked higher to 2.4% last month while the retail sales continues to grow steadily at a rate of 0.3% month-on-month. 

Influences on HKD, SGD & AED

A busy week for the Singapore Dollar starts on Wednesday when they release their retail sales for December, expectations are that it has increase by 0.1% year-on-year. They will also be releasing their balance of trade figure for January on Thursday; it is expected to have contracted to SG$3.7B. An empty week for the Hong Kong Dollar and Dirham leaves the currencies vulnerable to global market sentiment.

AUD

The Coronavirus continues to push the Aussie Dollar down as emerging markets struggle with the uncertainty surrounding the flu-like virus. Some Chinese data is due out on Monday morning which can give us an indication as to how the Chinese economy has been impacted by the virus. A lack of top-tier data coming out of the land down under will make the AUD susceptible to Coronavirus updates.

NZD

The Reserve Bank of New Zealand are set to make their rate decision this week, back in November the RBNZ held rates at 1.0% when many had suspected a cut. This week we expect no changes to the interest rate following stronger than expected economic data and some NZD strength last week. Thursday sees the release of the manufacturing PMI figures for January, the headline figure is expected to hop back up to 51.0 after dropping from 51.2 to 49.3 in December. The manufacturing PMI is normally considered when the RBNZ make their rate decision, but its impact will be limited as its being released after the RBNZ decision.

EUR

The Euro has few hard-hitting data reports out this week, the most important catalyst for the Euro this week is set to be European Central Bank head Lagarde’s speech at the 2018 ECB Annual Report. Then there will be some lower-tier data sprinkled out during the week with the Eurozone industrial production due to slide by 1.8%, EU economic forecast is set to be released on Thursday and finally Friday sees the Q4 flash GDP data released.

GBP

The British Pound struggled somewhat following Brexit uncertainties last week. This week we have the preliminary GDP figures due out on Tuesday, we can expect to see a flat reading for the final quarter of last year. On Tuesday, the Bank of England Governor Mark Carney is set to speak at the House of Lords Economic Affairs committee, the comments might be somewhat subdued with the governor set to step down soon.