Weekly News Highlights

EUR/USD

Last week the EUR/USD pair initially increased slightly due to worse than expected pre-NFP data. However, on Wednesday the pair erased its previous gains as more and more investors speculated over a possible ECB interest rate increase. On Thursday, the Euro weakened once the ECB announced that its fiscal policy has remained unchanged. This proves that investors are aware of higher risk of deflation, which may lead to recession as seen in Japan. Friday’s Non-farm payrolls came out slightly below the expectation but the pair didn’t experience a significant reaction. This week the pair starts out slightly below the 1.3700 level. The main event is the FOMC meeting on Wednesday, when it is expected that Fed will withdraw another $10 billion per month from the monetary stimulus. Traders should keep an eye on the following events this week: U.S. JOLTS Job Opening (on Tuesday), ECB Monthly Bulletin (on Wednesday) and U.S. PPI (on Friday).

 

GOLD

Last week the price of Gold remained under pressure, but there were some signs of strengthening of physical demand. Traders were mainly waiting for the Non-farm payrolls data. As the job data came out slightly below expectation, the traders immediately reacted and the price jumped up from $1,287/ounce to $1,307/ounce. This commodity slightly reversed afterwards and ended the week on $1,303/ounce. This week investors should mainly pay attention to FOMC Meeting Minutes which will be released on Wednesday.

USD/JPY

The USD/JPY pair strengthened last week by almost 1.30 percent and reached the highest value since January (104.07). However, the pair slid to the 103.20 area once it was revealed that the Non-farm payrolls data did not beat the expectation The sentiment has remained bearish this week ahead of the BOJ Monetary Policy Statement (Tuesday morning GMT). The surveys shows that the general expectation is that the BOJ will continue the same fiscal policy without any changes. If any changes will be announced, it will likely cause the Yen to drop and the pair to reach the 104 level again. We should pay attention to the FOMC minutes on Wednesday and Japanese Monetary Policy Meeting Minutes on Thursday.

GBP/USD

Last week the GBP/USD pair decreased by more than more than 100 pips, from 1.6680 to 1.6570. The British pound suffered after the ECB decision was announced to leave the current policy unchanged, despite very low inflation. Even though the U.K. has its own currency, they are still dependent on the EU decision, which in this case hurt the pound. Also all of the U.K. PMI indices (Manufacturing, Construction and Services) came out last week below the expectation, which might hint to slower economic recovery. This week traders should pay attention to U.K. Manufacturing Production on Tuesday, the FOMC Meeting Minutes on Wednesday and the most important the U.K. Official Bank rate statement on Thursday.