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Currency Market Analysis

Feb 17, 2020 | Currency Market Analysis

Global Themes

Today is a holiday for both the US and Canada, which means lighter liquidity may result in volatility for the FX markets. The US dollar is holding onto most of its gains from the past couple of strong weeks. A strong Consumer spending number from the US on Friday has kept the Buck on the front foot. Looking ahead, this week sees major market moving data from the UK, Canada, Eurozone and the US. For the dollar, markets will look to Wednesday when the Fed Minutes will be released, potentially shedding light on the possibility of a rate cut in 2020.

CAD

With the rise of oil prices last week, the Canadian dollar strengthened nearly half a percent and remains near its strongest point of the month (around 1.3236). Canada will release inflation numbers on Wednesday and retail sales numbers on Friday. Monitoring the price of oil will help determine if the Canadian dollar and commodity currencies can maintain momentum after the first weekly gain since January.

EUR

The Euro is hovering around nearly 2-year lows and could tumble even further if poor numbers regarding German Investor confidence are released on Tuesday. Manufacturing PMI data at the end of the week will shed light on the health of the Eurozone economy and gauge recessions risks for the market.

GBP

At the end of last week, the pound bounced above 1.30 after the finance minister change and markets eradicated the idea that the Bank of England will cut rates in 2020. Important data from the UK starts on Wednesday with benchmark inflation numbers. On Friday, manufacturing PMI numbers will be released to round out the week.


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