Outlook and Recommendation The EUR/USD turned green towards the end of the month and will enter August at 1.0984. US dollar gains are expected to
The EUR/USD turned green towards the end of the month and will enter August at 1.0984. US dollar gains are expected to intensify into year-end as market participants await the commencement of monetary policy normalization by the US Federal Reserve. Fed policymakers have become increasingly confident in the labor market outlook, with preference to an early and gradual path for monetary tightening; we anticipate the first benchmark interest rate increase to take place in September. A differentiated foreign exchange performance is expected to take place through 2016, with stabilization and modest strength anticipated for most currencies with the exception of the euro.
The US economy is showing signs of improving momentum on the back of better consumer and housing activity after a weak start to the year. Solid job growth, rising income gains, low gas prices, and pent-up demand should sustain the pickup in household spending into next year, while stronger sales are expected to provide a lift to business investment. Consumer confidence and spending remain well supported by strengthening job and income gains, cheaper gasoline prices, low borrowing costs, and rising stock market pricing and home values. Continued strong job growth has pushed the unemployment rate to a seven-year low of 5.3%, and alternative measures of labour market underutilization continue to improve. Auto sales are running at their highest level in a decade and major purchase plans are trending higher. US housing activity is also gaining traction, with both home sales and construction touching multi-year highs.
The euro fell 2% in July and is entering August at the mid-point of its range since March. Near term Greece risk has faded, and ongoing turbulence in China has highlighted the potential for safe-haven flows in periods of broader uncertainty. EUR sentiment remains overwhelmingly bearish with a sizeable $15.4bn short CFTC position as of mid-July. Downside risk is expected to rise into the end of August, with a renewed focus on challenging Greece negotiations and added pressure from the impending policy normalization at the Fed.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Major Economic Events In August That You Should Be Monitoring:
Time |
Cur. |
Event |
Forecast |
Previous |
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Saturday, August 1, 2015 |
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05:00 |
CNY |
Manufacturing PMI (Jul) |
50.2 |
50.2 |
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Monday, August 3, 2015 |
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05:45 |
CNY |
HSBC Manufacturing PMI (Jul) |
|
|
48.2 |
|
||
11:55 |
EUR |
German Manufacturing PMI (Jul) |
|
51.5 |
51.5 |
|
||
12:30 |
GBP |
Manufacturing PMI (Jul) |
|
51.6 |
51.4 |
|
||
18:00 |
USD |
ISM Manufacturing PMI (Jul) |
|
53.5 |
53.5 |
|
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Tuesday, August 4, 2015 |
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05:30 |
AUD |
Retail Sales (MoM) (Jun) |
|
0.5% |
0.3% |
|
||
08:30 |
AUD |
Interest Rate Decision (Aug) |
|
2.00% |
2.00% |
|
||
12:30 |
GBP |
Construction PMI (Jul) |
|
58.4 |
58.1 |
|
||
Wednesday, August 5, 2015 |
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02:45 |
NZD |
Employment Change (QoQ) (Q2) |
|
0.5% |
0.7% |
|
||
12:30 |
GBP |
Services PMI (Jul) |
|
58.0 |
58.5 |
|
||
16:15 |
USD |
ADP Nonfarm Employment |
|
215K |
237K |
|
||
18:00 |
USD |
ISM Non-Manufacturing PMI |
|
56.2 |
56.0 |
|
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Thursday, August 6, 2015 |
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05:30 |
AUD |
Employment Change (Jul) |
|
15.0K |
7.3K |
|
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12:30 |
GBP |
Manufacturing Production |
|
0.2% |
-0.6% |
|
||
15:00 |
GBP |
Interest Rate Decision (Aug) |
|
0.50% |
0.50% |
|
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Friday, August 7, 2015 |
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16:30 |
USD |
Nonfarm Payrolls (Jul) |
|
222K |
223K |
|
||
18:00 |
CAD |
Ivey PMI (Jul) |
|
53.0 |
55.9 |
|
||
Saturday, August 8, 2015 |
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06:00 |
CNY |
Trade Balance (Jul) |
|
|
46.54B |
|
||
Sunday, August 9, 2015 |
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06:00 |
CNY |
CPI (YoY) (Jul) |
|
|
1.4% |
|
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Tuesday, August 11, 2015 |
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13:00 |
EUR |
German ZEW Economic |
|
|
29.7 |
|
||
Wednesday, August 12, 2015 |
||||||||
09:30 |
CNY |
Industrial Production (YoY) (Jul) |
|
|
6.8% |
|
||
12:30 |
GBP |
Average Earnings Index +Bonus |
|
|
3.2% |
|
||
12:30 |
GBP |
Claimant Count Change (Jul) |
|
|
7.0K |
|
||
Thursday, August 13, 2015 |
||||||||
16:30 |
USD |
Core Retail Sales (MoM) (Jul) |
|
0.4% |
-0.1% |
|
||
Friday, August 14, 2015 |
||||||||
10:00 |
EUR |
German GDP (QoQ) (Q2) |
|
|
0.3% |
|
||
13:00 |
EUR |
CPI (YoY) (Jul) |
|
|
0.2% |
|
||
16:30 |
USD |
PPI (MoM) (Jul) |
|
0.2% |
0.4% |
|
||
Tuesday, August 18, 2015 |
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12:30 |
GBP |
CPI (YoY) (Jul) |
|
|
|
|
||
Thursday, August 20, 2015 |
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12:30 |
GBP |
Retail Sales (MoM) (Jul) |
|
|
-0.2% |
|
||
Friday, August 21, 2015 |
||||||||
16:30 |
CAD |
Core CPI (MoM) (Jul) |
|
|
|
|
||
16:30 |
CAD |
Core Retail Sales (MoM) (Jun) |
|
|
0.9% |
|
||
Monday, August 31, 2015 |
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|
Holiday |
United Kingdom – Summer Bank Holiday |