This week we expect a whole series of important macroeconomic news from the USA. It will all start with the release of the GDP data for the second quarter on Wednesday. Further the baton will be picked up by the FOMC’s decision on QE and interest rates and by employment stats on Friday. The GDP is expected to show impressive growth against the recovery after the disastrous first quarter in the background. The Fed will hardly suggest anything new except for the 10-billion tapering of the asset purchasing programme, but traders and investors will still look for hints at the earlier start of the policy toughening in the comments. Meanwhile, the labour market is expected to demonstrate even bigger growth than in the preceding months due to the recent high rates of the weekly unemployment claims All this pictures quite a strong week for the dollar. Those speculators, who always prefer to jump the gun, have already built the longest position against the euro for 8 months. However, we should say that this in its turn may be the reason for the euro’s poor performance in the coming days, as the currency is growing due to fresh purchases rather than old ones. Exactly this formation of a significant long position in USD contributed to appreciation of the American currency last week. Over that time EURUSD lost about a figure (from 1.3527 to 1.3429), though with other currencies movement was even more impressive. In the meantime, bears did an important thing – they hit a fresh yearly low. It should contribute to inflow of new USD-bulls, developing the pair’s decline even more. The only obstacle can be made by extremely poor important statistics. Thus, the labour market is quite able to grow by the expected 230K ( against 288 a month ago), but will certainly meet the difficulties with decline of the unemployment rate as the labour force ranks will be joined by fresh graduates. It is also quite possible that the Fed will preserve its cautious tone in regard to the rate increase. Many times Yellen has made more cautious comments than expected, especially if she delivered a prepared speech. Her most hawkish comments were given at the press-conferences and this time we expect. Thus, this week it won’t be a surprise if we see possibly consolidation and even a slight upward bounce of the pair from the current levels (1.3430).
The cable suffered losses last week. As has been mentioned earlier, the fact that in the preceding week the currency closed the week negative will benefit bears. The developing profit-taking didn’t let GBPUSD stay within the moderately downtrending market. On Thursday the pair was pushed lower and on Friday the pound was pushed down during the EU and Asian sessions on the attempts to recover. It seems that now Britain doesn’t have such news which could support growth. Bulls can only hope for weakness of the US statistics.
At the end of the previous week the pair made a jerk, hitting two-week highs. Yet, despite the general trend for the dollar’s growth, the pair still failed to get above 102, which keeps it in the lower part of the sideward channel of the recent half-year. Hopefully, this dead tiresome sideward trend will end soon as did similar consolidations in 2011 and 2012.
The Canadian dollar keeps depreciating. On Friday against general demand for the dollar, USDCAD grew from 1.0740 to 1.0810. Technically it was an upward move within the developing medium-term uptrend on breaking through the resistance of the short-term downtrend. Bulls did their part: the week was closed positive, which increases chances of growth this week.