Welcome to the easyMarkets weekly review where we look back over the results of some of the previous week’s economic indicators. It gives us the chance to reflect on how much expectations were met or missed and to examine a successful trade you could have made this week.
Event: EU Markit Manufacturing PMI & Services PMI (July)
Date: Monday 24 July 2017 at 08:00 GMT
Markets affected: EUR/USD, EUR/GBP
Trending hashtags: #eur, #pmi
On Monday, the EUR/USD saw multi-month highs and peaked for 2017 on the back of political turmoil in the US with the investigations into President Trump’s links to Russia and his administration’s struggles to conduct promised tax reforms and increase infrastructure spending. The somewhat disappointing reports in the EU for the manufacturing PMI and services PMI didn’t dampen the common currency. Manufacturing came in at 56.8 and below the expectation of 57.3. Services PMI was also a fraction off expectations coming in at 55.4 versus the anticipated 55.5. The euro got its boost from a report published by the IMF noting that Europe will be the world’s growth driver for the year, and at the same time revised the pace of expansion in the US down to 2.1% for the year.
Event: NZ Balance of Trade
Date: Tuesday 25 July 2017 at 22:45 GMT
Markets affected: NZD/USD, AUD/NZD
Trending hashtags: #nzd, #trade
New Zealand’s balance of trade came in at -$3.66 billion on Tuesday and fared better than expectations of -$3.70 billion. The previous month’s figure was also revised from -$3.75 billion to -$3.80 billion. These are the annualised figures for June, on a month-by-month change, the trade surplus increased to $242 million and the previous month was revised down from $130 million to just $75 million. Exports came in at a better than forecasted $4.7 billion against the expected $4.6 billion for June. The Kiwi dollar rose 0.05%, on the back of the balance of trade data, hitting 0.7421.
Event: Australia Consumer Price Index (Q2)
Date: Wednesday 26 July 2017 at 01:30 GMT
Markets affected: AUD/USD, AUD/NZD
Trending hashtags: #aud, #cpi
The all-important inflation data for Australia came in on Wednesday in the form of the consumer price index. CPI increased 0.2% coming in at 1.9% for the second quarter of this year, below the expected 2.2% year on year increase. The figure was also below the previous quarter’s 2.1% and sent the AUD/USD down by 0.38% to $79.06.
Event: UK Gross Domestic Product (Q2)
Date: Wednesday 26 July 2017 at 08:30 GMT
Markets affected: GBP/USD, EUR/GBP
Trending hashtags: #gbp, #cpi
The cable rallied on Wednesday following the release of GDP figures that showed the UK economy grew by 0.3% for the 2nd quarter of this year. GBP/USD traded at 1.3150, increasing 0.2% from the previous close and is looking to test new highs after breaking above year-to-date highs of 1.3127.
Event: US Interest Rate Decision
Date: Wednesday 26 July 2017 at 18:00 GMT
Markets affected: EUR/USD, GBP/USD, XAU/USD
Trending hashtags: #usd, #interestrate
The Federal Reserve maintained the interest rate at 1.25% and said it would look to normalize the balance sheet. The news sent the US dollar to 15 month lows on the back of dovish statements by the Fed with the EUR/USD nearing the 1.1800 mark for the first time since late 2014. Metals soared on the back of the announcement with gold reaching six week highs. The precious metal which is often inversely related to the greenback increased 1% and hit $1,264 a troy ounce.
Trade of the Week
Time in: Wednesday 26 July 2017 at 17:00 GMT
Market : EUR/USD
Investment: $500 with 200:1 leverage
Time out: Thursday 27 July 2017 at 03:00 GMT
If you had bought EUR/USD with a $500 margin at the price of 1.16256 and closed the deal once after the US Interest Rate Decision on Wednesday at 18:00 GMT which saw the currency pair increase 1.29%, you might have made $1,292. Note this example does not take into account spread.