Last week the US dollar lost ground against all the currencies in the major group. Oceanic currencies outperformed other G7 currencies against the Greenback, given the optimism that Chinese Authorities are restoring confidence in the worlds second biggest economy. Positive expectations on exports are relevant for both Australia and New Zealand, given their high correlations with the Chinese economy. The best performer against the Greenback was the kiwi dollar, with NzdUsd up 218 pips at 0.6898 (+3.26% weekly) and the second best was AudUsd , up 171 pips at 0.7673 (+2.28% weekly). EurUsd gained 231 pips at 1.1390 (+2.07% weekly): the most traded currency pair trades above the most relevant moving averages and both fundamentals and technical factors are bullish for the pair. The Federal Reserve already cut its year end expected Fed Funds Rate and layoffs in the energy sector are keeping the unemployment rate quite volatile. The structural low price of both Crude Oil and Natural Gas had the consequence to create redundancies; not only imbalances between supply and demand but also cost trimming to keep companies attractive to fund managers. At the same time, EurUsd it seems has started to discount the “Trump factor” as analysts and most of CEOs of big corporates in The US are worried that the potential Republican Candidate would bring political instability as Mr. Trump indeed has a very high chance in being chosen as the Candidate of a party that is quite skeptical of him. UsdChf slid below the medium term positive trendline, thus the next week the downtrend may continue; the rate lost 187 pips at 0.9573 (-1.95% weekly).
The Loonie dollar rose to a fresh 2016 high against the Greenback, with UsdCad at 1.3010 (-1.93% weekly), down 251 pips. The Japanese Yen level is still in a narrow trading range and closed last Friday at 111.6 (-1.28% weekly). The British Pound rebounded after the heavy losses of 2 weeks ago. GbpUsd rose to 1.4221 (+0.62% weekly), with a gain of 88 pips. In the commodities market Crude Oil was the worst performer as it erased its year to date performance. Crude Oil closed at 37.45 $/barrel (-10.96% weekly) as The Kingdom of Saudi Arabia will reduce its output only if other major producers will do the same. It makes sense as The Kingdom wants to protect its market share and if it would cut production alone buyers will shift to other producers. Negative week for precious metals with Silver that underperformed Gold: the shiny metal closed at 1,222.44 $ /oz (-2.58% weekly) and Silver at 15.03 $/oz (-4.81% weekly). The US Jobs report last Friday was mixed as NFP (Mar) data at +215k beat expectations (+205 K) but Unemployment at 5% was above the consensus (4.9%). Performance of US indices diverged from Japanese and European gauges. Positive market sentiment in US lifted Nasdaq100 +3.05% weekly and both S&P500 and DJIA near 1.5%. In Germany the DAX lost 1.38% weekly and in Japan the Nikkei 225 lost 2.96% weekly. On Monday in China will be celebrated the Ching Ming Festival and banks will be closed. The most relevant event during the Asian session will be the Australian Retail Sales data at 01:30 GMT. During the European session the Eurozone Producer Price Index will be released at 09:00 GMT. On Tuesday the Reserve Bank of Australia will decide the interest rate level, now at 2% and the consensus is in favor that the RBA will keep rates unchanged. In The Eurozone and US several Markit data will be released and on Wednesday the Chinese Caixin Services PMI at 01:45 GMT will be the most relevant event of the Asian session. At 07:00 GMT it’s the turn of the Non-Monetary policy`s ECB meeting. At 14:30 GMT the most important event for Crude Oil traders, with the EIA Crude Oil Stocks Change and then it will be the turn of the FOMC minutes at 18:00 GMT, and markets are expected to be quite volatile around the data release. On Thursday the ECB Monetary Policy Meeting Accounts at 11:30 GMT and then the session will continue with a speech of ECB Draghi and also of Janet Yellen as well at 21:30 GMT. On Friday Swiss Franc traders will pay attention to the Swiss Unemployment Rate data at 05:45 GMT. Germany trade balance figures at 06:00 GMT and then in UK several data will be released at 08:30 GMT. Industrial Production, Trade Balance and Manufacturing Production. During the US session will be released the Canadian Unemployment Rate at 12:30 GMT and then it’s the turn of the UK NIESR GDP Estimates at 14:00 GMT and the Baker Hughes US Oil Rig Count will be the last event in the economic calendar.
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