AUD/USD Weekly Forecast – 25 July – 29 July

Events that marked the week:

Tuesday's session was marked by RBA Meeting Minutes. Officials at the Reserve Bank of Australia (RBA) are awaiting further information on growth and inflation before deciding whether to adjust monetary policy, the minutes of the July 5 meetings revealed Tuesday. “The Board noted that further information on inflationary pressures, the labour market and housing market activity would be available over the following month and that the staff would provide an update of their forecasts ahead of the August Statement on Monetary Policy,” the official July 5 minutes said. This information would allow the Board to refine its assessment of the outlook for growth and inflation and to make any adjustment to the stance of policy that may be appropriate.”

USD - Major events in the week ahead

Events that marked the week:

On Tuesday Building Permits and Housing Starts figures were published. New-home construction in the U.S. rose more than forecast in June, providing some momentum for residential real estate near the end of its busy selling season. Residential starts increased 4.8 percent to a 1.19 million annualized rate, the most since February, from 1.14 in May that was lower than previously estimated, Commerce Department data showed Tuesday in Washington. Permits, a proxy for future construction, also climbed. Permits climbed 1.5 percent to a 1.15 million annualized rate, matching the median forecast of economists surveyed by Bloomberg.

Thursday brought Unemployment Claims and Philly Fed Manufacturing Index figures. The number of applications for U.S. unemployment benefits unexpectedly fell last week, reaching a three-month low, indicating the labor market remains steady. Initial jobless claims dropped by 1,000 to 253,000 in the week ended July 16, from an unrevised 254,000 in the prior period, a report from the Labor Department showed Thursday in Washington. The median forecast of 44 economists surveyed by Bloomberg called for 265,000. Continuing claims decreased.

Separate report on Philly Fed Manufacturing Index showed that the index of current activity, fell from 4.7 in June to -2.9 this month. For nine of the past 11 months, this diffusion index has been negative. Twenty-two percent of the firms reported an increase in activity, 3 points lower than last month, and the percent of firms that reported decreases rose from 20 to 25. Fifty-one percent of the firms reported steady activity this month, similar to the share that reported steady activity last month.

This week markets will be looking at:

CB Consumer Confidence (Tuesday 16:00)

New Home Sales (Tuesday 16:00)

Durable Goods Orders (Wednesday 14:30)

Federal Funds Rate/FOMC Statement (Wednesday 20:00)

Unemployment Claims (Thursday 14:30)

Advance GDP (Friday 14:30)

Chicago PMI (Friday 15:45)

Revised UoM Consumer Sentiment (Friday 16:00)

EUR/USD Weekly Forecast – 18 July – 22 July

Events that marked the week:

Wednesday's session brought Eurozone Industrial Production data. In May 2016 compared with April 2016, seasonally adjusted industrial production fell by 1.2% in the euro area (EA19) and by 1.1% in the EU28, according to estimates from Eurostat, the statistical office of the European Union. In April 2016 industrial production rose by 1.4% in the euro area and by 1.5% in the EU28.In May 2016 compared with May 2015, industrial production increased by 0.5% in the euro area and by 1.1% in the EU28.

GBP/USD Weekly Forecast – 18 July – 22 July

Events that marked the week:

On Wednesday UK pound has reacted positively to the coronation of Theresa May as Britain’s new Prime Minister, as she emerged as the only candidate to be the next leader of the Conservative Party on Monday, following the withdrawal from the race of her nearest challenger Andrea Leadsom. The market’s eyes will now be on who May will select to be in her administration, it is widely thought that the current Chancellor George Osborne will be forced out of his position, and that there will be a minister responsible purely for the negotiations in leaving the European Union (EU). Observers will also keeping an eye on the balance of the new Prime Minister’s team, between those who wished to leave to EU, and the ones who voted to remain.