Weekly Forex Market Recap: July 12 – 16 - Kakiforex.com - Financial Market Media No. 1 in the World Weekly Forex Market Recap: July 12 – 16 Weekly Forex Market Recap: July 12 – 16

July 17, 2021

Weekly Forex Market Recap: July 12 – 16

 It was another week of risk-off vibes as negative covid-19 updates continued, as well as on inflation fears. Safe havens were able to win out in this environment, but the Kiwi was able to buck the trend and take the top spot among the majors thanks to a hawkish move from the Reserve Bank of New Zealand.

Notable News & Economic Updates:

  • China PBOC lowers banks’ reserve requirements to encourage lending
  • China’s slowing v-shaped economic recovery sends global warning
  • Fed’s Daly says inflation temporary, taper may start by year-end
  • Crypto trading volume fell 43% in June following China’s crackdown on the sector
  • Covid cases are surging again in Latin America and the U.S., WHO officials warn

  • Stablecoins Should Be More Strictly Regulated, Fed Chair Tells Congress
  • Oil prices slip as drop in Chinese crude imports raise alarm on demand
  • UK inflation tests BoE as it jumps to highest since 2018
  • Powell says the Fed is still a ways off from altering policy, expects inflation to moderate
  • China’s GDP grew 7.9% in the second quarter; retail sales beat expectations
  • China industrial output rises 8.3% in June
  • Blockchain protocol Thorchain loses 4K Ether in attack
  • Dow drops 330 points on Friday, on pace to snap 3-week winning streak

Intermarket Weekly Recap

Safe havens win out the financial markets week as traders likely continued to focus on the recent negative covid-19 developments. Recent headlines have pointed to rising case counts, igniting calls by governments to reinstate various measures to slow the spread from renewed mask mandates to full lockdown protocols.

These measures likely lead to speculation that economic growth is likely to slow, raising the level of uncertainty for traders as this conflicts with the idea that we will see global monetary policy tightening soon as inflation data came in hot from around the world.

Overall, it looks like the risk-off camp won out the week as safe haven assets like gold, the U.S. dollar, and Treasury bonds stayed green through the latter half of the week, while oil, crypto, bond yields and equities drifted lower.

In the forex market, we saw a clearer display of the level of uncertainty as most major currencies saw choppy, mixed price action. But there was an outlier among the group as the New Zealand dollar caught a strong bid going into the Wednesday session after the RBNZ announced an end to their quantitative easing program, earlier than expected. This bullish sentiment on the Kiwi was later reinforced on Friday after data showed inflation surged, the fastest pace since 2011.

The Bank of Canada also gave their latest monetary policy statement this week, and while it wasn’t as hawkish as the RBNZ, we did see the BOC reduce their rate of bond purchasing to C$2 billion per week. But unlike the RBNZ, the BOC sounded a bit cautious on their outlook as the reduced their 2021 growth forecast from 6.5% to 6.0%. This is likely why we didn’t get the same bullish outcome for the Loonie, and likely why the Loonie was the biggest loser of the week, on top of weaker-than-expected Canadian jobs update and lower oil prices.

USD Pairs

  • Consumer Inflation climbs higher than expected in June as price index rises 5.4%
  • Powell says the Fed is still a ways off from altering policy, expects inflation to moderate
  • U.S. producer prices surge more than expected in June
  • Fed’s ‘Beige Book’ shows economy strengthened last month but supply shortages worsened
  • U.S. small business optimism rises despite labor shortage, inflation worries – NFIB
  • Jobless claims hit new pandemic low, while New York manufacturing notches record high
  • Fed’s Evans says need more progress on employment before taper
  • Fed’s Powell rapped on inflation, regulations in Senate hearing
  • Philly Fed factory index falls in July to lowest since December
  • NY Fed Empire State business conditions index surges to record 43.0 in July vs 17.4 in June
  • U.S. retail sales unexpectedly rise 0.6% in June
  • U.S. consumer sentiment drops in early July on inflation fears

GBP Pairs

  • Bank of England Financial Stability Report: BoE warns some asset prices look stretched
  • UK inflation jumped to a three-year high in June, driven by price increases in clothes and second-hand cars
  • UK jobs leap as economy bounces back, pay jumps too
  • UK reports 42,302 COVID cases, highest since Jan. 15

EUR Pairs

  • ECB’s Lagarde sees policy change in July, possible 2022 measures
  • ECB’s Schnabel says she doesn’t expect ‘excessively high’ inflation
  • Germany Wholesale prices in June 2021: +10.7% y/y
  • German Inflation Rate at +2.3% y/y in June 2021
  • ECB’s new guidance must show there is leeway on inflation -Centeno
  • Industrial production down by 1.0% in euro area and by 0.9% in the EU
  • ECB to wait for core inflation rise before tightening, Schnabel says

CHF Pairs

  • Swiss Producer and Import Price Index rose by 0.3% in June
  • Swiss National Bank rejects higher target as way to boost inflation

CAD Pairs

  • Carolyn Rogers appointed as Senior Deputy Governor of the Bank of Canada
  • Canadian manufacturing sales fell 0.6% to $57.9B in May, the second consecutive monthly decline.
  • Bank of Canada rosy on rebound, sees hot inflation in near term
  • Sales of Canadian wholesale goods rose 0.5% in May to $72.2B, the third consecutive monthly increase.
  • Foreign investors acquired $20.8B in Canadian securities in May
  • Canadian housing starts was 293,567 units in June 2021, up from 284,837 units in May 2021
  • Oil edges up on Friday but on track for big weekly drop on supply concerns

NZD Pairs

  • New Zealand June electronic retail card spending gains 0.9%
  • Skilled labour shortage ‘a problem we’ve got to address’, Finance Minister Grant Robertson says
  • New Zealand Food Prices Rise 2.8% On Year In June
  • New Zealand House Prices Continue to Soar Despite Curbs
  • New Zealand dollar jumps as RBNZ puts early end to bond buying
  • BusinessNZ: Expansion in New Zealand’s manufacturing sector picked up in June
  • New Zealand inflation surges, fueling RBNZ rate-hike bets

AUD Pairs

  • Australia’s NAB business confidence index down from 20 to 11 in June
  • Australia Weekly Consumer Confidence: 110.0 vs. 107.8 previous
  • Australia consumer sentiment holds up as Sydney locks down
  • Australian economy added 29.1K jobs in June vs. projected 19.7K gain
  • Australia’s jobless rate improved from 5.1% to 4.9%

JPY Pairs

  • Japan’s May machinery orders rise 7.8%, up for third month in a row
  • Japan wholesale prices continue to surge as import costs hit record
  • Japan’s factory mood in July hits highest since late 2018 – Reuters Tankan
  • BOJ cuts Japan growth forecast, unveils climate scheme plan
  • BOJ Governor Kuroda’s comments at monetary policy statement news conference