FX Fundamental Breakdown – 08 Mar 2021
The dollar was bought up in the last week as traders wanted to price in NFP before Friday’s results. The Nonfarm Payrolls data was very positive, coming in at 379K vs the 182K that was forecasted, which marks the growth in jobs at almost double the expected rate. The ISM Manufacturing PMI was also positive with a reading of 60.8 vs the consensus reading of 58.8. However, both the ADP Employment data and ISM Services PMI fell below consensus. A bullish USD is expected this week following the positive NFP data.
In the coming week, look out for the Consumer Price Index data on Wednesday (10/3).
One week forecast for the USD is bullish.
The EUR was sold off in the last week as negative economic data was reported from the EU, affecting the currency. Both the CPI and Retail Sales data were below consensus, with Retail Sales reported significantly lower than forecasted value of -1.1%, down to -5.9%. The EU is still hopeful that the vaccine rollout will support economic recovery. There has also been some speculation surrounding Italy having a second wave of the virus, as their numbers in new cases continue to rise.
In the coming week, watch out for the Gross Domestic Product Data on Tuesday (09/03), and the ECB Rate Decision on Thursday (11/03).
One week forecast for the EUR is bearish.
The AUD fell in the last week as the RBA’s rate decision to hold rates was mostly priced on AUD markets. Economic data from the last week was quite mixed. While the Retail Sales data undelivered, the Trade balance was much higher than the expected forecast, and the GDP data was also better than expected, 3.1% vs the 2.5% forecast.
In the coming week, watch for the RBA Governor Lowe’s speech on Wednesday (10/03).
One week forecast for the AUD is bullish.
As the pound made gains across most non-USD pairs, the GBP was definitely one of the stronger currencies in the last week. While there was no high impact economic data from the UK in the past week, the continued rollout of the vaccine and the calm of the Brexit deal continues to support the GBP.
In the coming week, watch out for BoE Governor Bailey’s speech on Monday (08/03).
One week forecast for the GBP is bullish.