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Weekly Forecast – May 8


Date of publication: May 8, 2017 | Author: Tim Clayton

Reaction to Macron’s French Presidential election win will be an important focus during the week, especially with parliamentary election in June. Trends in oil and commodity prices will also be a key factor after sharp losses last week, especially as the moves in energy prices will have a significant impact on global monetary policy expectations.

US

The US economic releases are concentrated late in the week with both the consumer prices and retail sales data due on Friday. The CPI data could have important implications for Fed policy at the June meeting.

The job-openings data will be released on Tuesday and there will be commentary from Fed officials, although political events may have greater impact as healthcare and tax proposals are debated.

UK

The Bank of England will announce its latest monetary policy decision on Thursday along with the policy summary and minutes. The central bank will releases its latest inflation report containing new forecasts while Governor Carney is due to hold a press conference.

The central bank will be extremely reluctant to change policy during the General Election campaign and rhetoric surrounding both the economy and potential policy trends are also likely to be restrained.

The economic data is unlikely to have a significant impact on the UK currency during the week.

The election campaign will be watched closely, although the most important element is likely to be the rhetoric surrounding EU exit negotiations following the election of Macron.

Euro-zone

Following Macron’s victory in the French Presidential election, markets will be watching the early tone among key elements such as trade unions and the major political parties.  In particular, there will be a focus on whether he can secure an alliance with the Socialists of Conservatives for the June parliamentary elections.

Euro-zone economic data is unlikely to have a major impact during the week, although the comments from ECB officials will be watched closely to assess whether there is any significant shift in policy emphasis following the French vote.

International

The Reserve Bank of New Zealand will announce its latest interest rate decision on Thursday local time.

Australia is due to present its latest budget release with any commentary from the ratings agencies watched closely.

China will release its latest trade data which will be important for confidence in the Chinese and global growth outlooks.

 

Forecasts

Currency pair Spot 1-week forecast 1-month forecast
EUR/USD 1.102 1.110 1.090
USD/JPY 113.0 112.5 110.5
EUR/GBP 0.850 0.845 0.835
GBP/USD 1.299 1.314 1.305
AUD/USD 0.742 0.750 0.755
USD/CAD 1.366 1.350 1.335
USD/SGD 1.405 1.400 1.395
USD/HKD 7.784 7.782 7.775
NZD/USD 0.691 0.705 0.705
GBP/JPY 146.7 147.8 144.2
GBP/AUD 1.750 1.751 1.729
GBP/NZD 1.879 1.863 1.852
GBP/SGD 1.824 1.839 1.821
GBP/HKD 10.11 10.22 10.15
GBP/CHF 1.281 1.288 1.299

 

 timTim Clayton is a market analyst with more than 20 years of experience in the financial markets, with particular focus on currencies. Holds an economics degree from University of New York. Writes for multiple publications including Investing.com and SeekingAlpha so he is on top of all the happening in the world of currencies and macro-economics. 

 

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