SMATS FX is proud to provide our weekly analysis of currency markets and exchange rates.
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USD |
The US Dollar begins its resuscitation as it climbs on the back of Biden’s US$1.8 T bill being just about passed through the senate, despite rising COVID-19 cases. The non-farm payrolls beat expectations last week, buoying the Dollar further in Friday’s London session while this week’s CPI data should play a significant role for USD pairs as economists are cautious about the potential of inflation sky-rocketing on the back of the pandemic. Influences on HKD, SGD & AED It is mostly an empty docket for our exotic currencies this week, with just the inflation report out for the United Arab Emirates on Tuesday and the industrial production for the 4th quarter out for Hong Kong. Both are expected to fall, the former by 2% and the latter by 5%. Our exotic currencies will move in line with Dollar movements as they are pegged to the US Dollar, local COVID-19 cases should also impact the exotic pairs as well as general risk sentiment. |
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AUD |
Aussie Dollar pairs suffered last week as the Reserve Bank of Australia increased their bond-buying operations to A$4 B while adding that the quantitative easing program can be extended if necessary. NAB business confidence for February should climb from 10 to 11 when it is released on Tuesday, while the Westpac consumer confidence is due out during Monday’s Asian session. RBA Governor Lowe will be giving a speech on Wednesday, traders should listen out for any hints as to how the economy is progressing. |
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NZD |
The Kiwi Dollar has struggled alongside emerging markets and other comdolls, this week and in the absence of any domestic data releases, the NZD will be move in line with emerging markets as COVID deaths start to dwindle and bond yields start to dominate the headlines. Next week the GDP for Q4 is expected to fall by 0.5% QoQ but rise by 0.3% YoY despite COVID-19 restrictions. |
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EUR |
The Euro continues to fall as the Eurozone lag in the vaccination race. The biggest catalyst for the Euro this week is set to be the monetary policy statement from Christine Lagarde on Thursday, they are expected to sit on their hands and make no material changes to the interest rate or bond purchasing. Hints that the central bank is ready to act on some quantitative easing could prove to weaken the shared currency. Germany will be releasing their balance of trade for January on Tuesday and Spain will be releasing their retail sales and CPI data on Friday. |
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GBP |
The GBP has been on a tear since Sunak’s budget as he gives hopes to the UK economy as they lead the way to herd vaccination. The Pound Sterling finished last week in the green and with a rather empty slate this week, the Pound could be vulnerable to some profit taking. The balance of trade for January should narrow from £-6.2 B to -£4.8 B, at the same time they will be releasing their MoM GDP for January, it is expected to have declined by 5.4%, manufacturing production and industrial production will also be released on Friday. |
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