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Weekly Forecast – August 7

Date of publication: August 7, 2017 | Author: Tim Clayton

It is important to note that there will be the peak holiday season in the US and Europe during August. There will be low trading volumes and a lack of Market liquidity.  Although it can be the case that market activity will also be subdued, the lack of liquidity can spark dramatic market moves, especially with senior traders often absent from the market. It is also the case that news events can have a more substantial impact than usual which can lead to a cascade effect.

It is also the case that major market crises can suddenly erupt during the holiday season with must larger reactions to important developments. There is, therefore, the need for caution over the next few weeks and it is very dangerous to be complacent surrounding the situation.

For investors needing to make large money transfers during August, there is a good case for locking in favourable rates through forward contracts.


The US CPI inflation data on Friday will be the main focus during the week, especially as recent data has been generally weaker than expected, when the Dollar was at 13-month lows after Fed meeting at the end of July.

Stronger than expected data would reinforce the more positive dollar tone while weak data would trigger fresh doubts surrounding the outlook and put the US currency under fresh selling pressure.

Markets will also continue to monitor comments from key Federal Reserve officials with New York Fed President Dudley one of the key members due to make comments during the week.

The Fed tone surrounding the outlook will have a significant impact on market sentiment.

Has the dollar turned a corner?

After heavy selling pressure during the past few weeks, the dollar corrected after Fridays jobs data. Sentiment will still be very cautious, but there is a good chance that the trade-weighted index has seen a near-term low with markets more confident that the Federal Reserve will push ahead with normalising policy.


The UK will release its latest data on industrial production on Thursday and this follows a run of notably disappointing data on industry over the past few months.

There will need to be much stronger than expected data to reverse underlying negative sentiment towards the UK outlook.

Overall, Sterling is unlikely to make significant progress during the week.


Senior ECB officials are not scheduled to make speeches during the week, but there is the potential for unofficial briefings and leaks. There are no significant Euro-zone data releases during the week.  

Overall, Euro trends are likely to be influenced strongly by dollar moves for the week as whole.


The Reserve Bank of New Zealand will announce its latest interest rate decision on Thursday local time. No change in interest rates is expected and the data on inflation expectations will be released on Monday local time.

Oil prices will be watched closely with OPEC members due to meet to discuss compliance to market quotas.


Currency pair Spot 1-week forecast 1-month forecast
EUR/USD 1.178 1.165 1.150
USD/JPY 110.7 111.5 112.5
EUR/GBP 0.903 0.905 0.885
GBP/EUR 1.108 1.105 1.130
GBP/USD 1.305 1.287 1.299
AUD/USD 0.792 0.785 0.775
USD/CAD 1.266 1.270 1.280
USD/SGD 1.361 1.365 1.372
USD/HKD 7.820 7.810 7.810
NZD/USD 0.741 0.745 0.735
GBP/JPY 144.5 143.5 146.2
GBP/AUD 1.647 1.640 1.677
GBP/NZD 1.762 1.728 1.768
GBP/SGD 1.776 1.757 1.783
GBP/HKD 10.20 10.05 10.15
GBP/CHF 1.268 1.265 1.311
 timTim Clayton is a market analyst with more than 20 years of experience in the financial markets, with particular focus on currencies. Holds an economics degree from University of New York. Writes for multiple publications including and SeekingAlpha so he is on top of all the happening in the world of currencies and macro-economics. 
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Information expressed in this article and on as a whole does not constitute as financial advice. If you decide to make any actions based on the information you read, we shall not be held responsible.

This post first appeared on Best International Money Transfer - Comparison & R, please read the originial post: here

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Weekly Forecast – August 7


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