Weekly Market Report & Schedule of Main Events
By all counts, the US dollar enjoyed another reasonably successful week, up 0.30% according to the US dollar index.
Bolstered by a notable monthly supply-turned support area at 95.13-92.75, price registered a fresh 2019 peak at 97.37, inching closer to last year’s 97.71 high.
The unit, however, did lose its shine in the later stages of the week amid significantly weaker-than-expected retail sales and industrial output.
According to CNBC, The United States and China will also resume trade talks this week in Washington.
US President Donald Trump repeated on Friday he may extend a March 1 deadline for a deal and keep tariffs on Chinese goods from rising.
Both the United States and China reported progress in five days of negotiations in Beijing last week.
In other currencies…
AUD – Commodity Currency moving higher
The Australian dollar rose 0.78% against its US counterpart last week, despite early week representing reasonably bland action.
Underpinned by better-than-expected Chinese trade figures Thursday, the commodity-linked currency advanced higher in early Asia, reaching a peak of 0.7131.
Things turned sour as London traders entered the fight, which eventually saw the candles whipsaw through 0.71 to lows of 0.7071 amid US hours.
A quick recap of Friday’s trade reveals the candles declined in early hours, led by soft Chinese inflation data.
Despite this, a swift recovery took shape into the London session, bolstered by a waning US dollar that reclaimed 97.00 to the downside, and some optimistic trade-related comments out of recent negotiations between the US and China.
The move higher, as is evident from the H4 chart, formed the D-leg of a nice-looking AB=CD bearish pattern that completes around 0.7155, which could hamper upside in early trade.
Brexit concerns continue to weigh
Meanwhile, the British pound also ceded further ground to its US peer in recent trade, down 0.40% on the week and 1.69% on the month.
Brexit concerns continue to weigh on the currency, as Prime Minister Theresa May suffered another Commons defeat after MPs voted down her approach to Brexit talks.
MPs voted by 303 to 258 – a majority of 45 – against a motion endorsing the government’s negotiating strategy.
The defeat has no legal force and Downing Street said it would not change the PM’s approach to talks with the EU (BBC News).
The GBP/USD pair, however, received some much-needed respite Friday following an upbeat UK retail sales print.
The monthly growth rate in the quantity bought increased by 1.0% in January 2019, following a decline of 0.7% in December 2018, according to the Office for National Statistics.
Price movement concluded the week topping just south of 1.29, which happens to merge closely with a H4 descending channel resistance (taken from the high 1.3199).
New review of events in the upcoming week
Last week, the US dollar strengthened again relative to the basket of world currencies.
The dollar index (#DX) reached new monthly highs and closed in the positive zone.
Demand for the US currency is still high.
Trade negotiations between the US and China are in the spotlight.
Chinese President Xi Jinping said that trade negotiations between the United States and China will continue next week in Washington.
Both sides are striving to reach an agreement that will prevent an increase in tariffs for Chinese goods after March 1.
According to the president’s statements, China is ready to resolve economic disputes and seek an agreement that will satisfy both sides.
Investors expect publication of the RBA, the ECB and the Fed minutes.
Schedule of Important Economic Events of the week
In the upcoming trading week, we recommend paying attention to the following macroeconomic events.
Monday, February 18th
On Monday, the news feed will be calm.
Publication of important economic reports is not planned.
Financial markets of the US and Canada will be closed due to holidays.
Tuesday, February 19th
On Tuesday, investors will assess the following economic reports:
- Reserve Bank of Australia meeting minutes at 02:30 (GMT+2:00);
- Statistics on the labor market in the UK at 11:30 (GMT+2:00);
- German ZEW economic sentiment index at 12:00 (GMT+2:00).
Wednesday, February 20th
On Wednesday, the publication of the FOMC meeting minutes will be the key event at 21:00 (GMT+2:00).
The regulator may indicate a further rate of increase in interest rates.
We recommend paying attention to the comments by the Central Bank representatives.
Thursday, February 21st
On Thursday, the news feed will be full of events. We expect the publication of important economic reports:
- Statistics on the labor market in Australia at 02:30 (GMT+2:00);
- German manufacturing PMI at 10:30 (GMT+2:00);
- ECB monetary policy meeting account at 14:30 (GMT+2:00);
- US durable goods orders at 15:30 (GMT+2:00);
- US Philadelphia Fed manufacturing index at 15:30 (GMT+2:00);
- Existing home sales in the US at 17:00 (GMT+2:00).
We also recommend paying attention to the speech by the Bank of Canada Governor.
Friday, February 22nd
On Friday, financial market participants will assess the following statistics:
- German GDP at 09:00 (GMT+2:00);
- German IFO business climate index at 11:00 (GMT+2:00);
- Consumer price index in the Eurozone at 12:00 (GMT+2:00);
- Report on retail sales in Canada at 15:30 (GMT+2:00).