SMATS FX Weekly Market Report | Monday 29 June 2020

USD

After spending most of the week in the red, the US Dollar managed to make back some of its losses thanks to major risk aversion and a turnaround in risk sentiment towards the end of the week. The US jobs data that is due out on Thursday is likely to be the biggest market mover across the board ahead of the 4^th of July weekend. Expectations of a 2.9 M gain in jobs in June is expected, should the data miss the forecast, it is likely to have a large impact on the markets. The US unemployment rate is also due out on Thursday, we are likely to see it decrease from 13.3% to 12.3%.

Influences on HKD, SGD & AED

Our exotic currencies will largely be moving in line with the USD, especially on Thursday during the jobs data. Hong Kong are set to release their balance of trade, exports and import numbers on Monday while they expect a 30% decline in retail sales for May. Singapore will be releasing several data reports on Friday, the retail sales are likely to increase from -31.7% to 5.5% while the Markit PMI numbers are expected to increase from 27.1 to 35.

AUD

A quiet week last week did not stop the Aussie Dollar from challenging the top of the charts thanks to positive risk sentiment in the early part of the week and positive comments from the Reserve Bank of Australia’s Governor Lowe. This week we have several lower tier reports out of the Land Down Under, the retail sales numbers are due out on Friday with expectations of a 16.3% surge following a 17.7% drop in March. On Thursday, we expect the trade surplus to widen from A$8.8 B to A$9.1 B. COVID-19 cases and any easing of lockdown restrictions will highly impact the Aussie Dollar.

NZD

It was a topsy-turvy week for the Kiwi Dollar as it benefitted from positive risk sentiment in the first half of the week but comments from the RBNZ officials that the export economy might start to suffer caused a drop in NZD value. Traders should keep an eye out for the jobs data out of the US at the end of the week as it tends to influence demand for USD counterparts. ANZ Business confidence numbers are due out on Thursday, a report that the Reserve Bank pay close attention to, it is expected to climb from -41.8 to -33.0 when it is released.

EUR

Counter-currency weakness, an improving European economy and hopeful business sentiment data from Europe caused the Euro to take top spot last week. Business confidence numbers are due out for the European region on Monday is expected to gain slightly from -2.43 to -2.0. A EU-South Korea video conference will be taking place on Tuesday to discuss the COVID-19 outbreak and the expansion of the EU-Republic of Korea strategic partnership. ECB members will be giving speeches throughout the week which could see some intraday movement in Euro pairs.

GBP

Thanks to mostly negative global risk sentiment the GBP ended off in the red as the higher yielding currencies gained. The biggest GBP driver this week will come in the form of their GDP growth rate for the 1^st quarter of the year, it is expected to have contracted by 2.0% QoQ and 1.6% YoY. GFK consumer confidence for June is likely to impact the rates as well as the Bank of England’s thought process going into next month’s rate decision, it is expected to have gain from -36 to -32. The BOE will be giving their financial stability report on Thursday as well as the FPC record.