Week Ahead: JPY, EUR, CAD, GBP, CHF
8:30 AM (EST) Update
If you follow me on Twitter you probably know we entered a bullish position on the Dollar - Yen dancing couple (USD/JPY) right after the Fed rate decision on Friday, when it reached the lower level of a triangle chart pattern I had mentioned in my previous USD/JPY update. But that wasn't all. Some Invest Diva students got to entered a bearish position on EUR/USD as well, which also closed with profit on Monday.
Ok, now that I got the bragging out of the way, let's get down to business and see what we can expect this week from the currency pairs on the forex dance floor. Here are economic points on the Japanese Yen, Euro , British Pound, Swiss Franc and Canada's dollar.
Silver Week in Japan
The Land of the Shining Sun is having yet another vacation week to mark the end of the summer which will continue until Wednesday (JEALOUS!!) So we are not expecting many moves from the Japanese Yen by itself at the start of the week. However, this could give us an opportunity to trade the Japanese Yen against more volatile currencies. It's all about pairing people!
Greek's Tsipras is BACK!
Mr. Tsipras, the leftist leader of Greece returned as Prime Minister on Monday. He is determined to secure debt relief from the country's creditors in his "first and most important battle" after scoring an unexpectedly clear election victory. On Sunday's snap election, voters gave Tsipras and his Syriza party a second chance to tackle Greece's problems, despite his summer U-turn when he ditched his anti-austerity platform to secure a new bailout deal and avert 'Grexit' - a Greek exit form the euro zone.
Is Mr. Euro happy about the recent Greek triumph? It may be too soon to tell but he sure has been on the path of erasing all his gains from last week so far (heck, our pip-making over the weekend) but to be fair, we can't blame all this on Mr Tsipras' return. After all, the majority of the world's population is sick and tired of hearing about Greek problems and investors don't seem to pay much attention to Greece anymore.
UK Interest Rate Cut?
Just as we were talking about a potential rate hike in Britain, Bank of England’s chief economist warns that UK interest rates may have to be cut further from their already record low level, highlighting signs that the global economy is on the edge of disaster, and entering its third phase of turmoil. Mr. Carney implicated only last week that the bank were looking to raise rates from 0.5% as early as next year.
To which Katy Perry said: "You change your mind Like a girl changes clothes. "
Swiss Trade Balance Due on Tuesday
The happiest country on earth is doing moderately on economics. After contracting by 0.2% back in Q1 2015, the Swiss economy managed to erase its earlier loss with a 0.2% expansion for Q2 2015. Their jobless rate for August ticked higher to 3.2% from 3.1% previous due to an influx of new job seekers. However the dark side of recent data shows that consumer confidence went down in July by A LOT (down from -6 to -19.)
The ordinary Swiss consumer may not be all that happy, but business is good in Switzerland since the KOF Swiss Economic Institute’s economic barometer ticked slightly higher to 100.7 in August from 100.4 previously, bringing the happiness indicator to the positive zone.
Probably the most unhappy data of all on a long term basis is inflation. Switzerland is still suffering from abysmally poor inflation levels. And while the month-on-month reading for August seems slightly upbeat (-0.2% current, -0.6% previous), the yearly reading actually shows that the intensifying deflationary trend is back (-1.4% current, -1.35 previous).
Any who, September's trade balance which shows the difference in value between imported and exported goods for the month is due on Tuesday at 7 AM GMT, and a positive number on could make Mr. Swissy very happy.
All Eyes on Bank of Canada Governor
Bank of Canada (BOC) governor Stephen Poloz is due to speak about the commodity cycle and the Canadian economy, in Calgary on Monday at 7:45 PM GMT. I must admit the Loonie (forex geek name for Canadian dollar) has been handling itself pretty well during the recent volatility, including Chinese turmoil and Fed rate decision.
Today's speech from Mr. Poloz is important because we want to know what he thinks about the recent turnaround in the economy. there is a risk that Q3 GDP will outperform the Bank’s forecast from the July Monetary Policy Report.
Low oil prices have pressured the Canadian economy in particular the province of Alberta so Governor Poloz’ words will address the central bank’s views on the topic of energy and the effects of monetary policy to aid the overall growth of the economy.
However keep in mind that Mr. Poloz is sort of a crowd pleaser , and may be very careful with his tone as he wouldn't want to upset everyone.