Forex: Quiet Beginning for the week

on Jun 24, 2013


Last week the euro recorded two-week lows against a broadly stronger dollar after the US Federal Reserve indicated that the QE wind-back may start later this year.
On Wednesday, Fed Chairman Ben Bernanke said that the bank could begin tapering asset purchases before the end of the year and could wind them down completely in the first half of 2014 if the US economic recovery matches expectations. The Fed sees economic growth at between 2.3 and 2.6 percent in 2013, with unemployment falling to between 6.5 and 6.8 percent by the end of 2014. The central bank also expects inflation to edge closer to its two percent target.

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Today CESifo GmbH (Munich Society for the Promotion of Economic Research) is due to release reports on German business climate, current assessment and expectations, all for June.
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Last week the pound fell to a 12-day low against the US dollar. On Friday the quote registered a 1.5366 daily low for a fall of 1.46 percent on the day.
Today the only release likely to affect the quote’s movements is the Chicago Fed’s National Activity Index (CFNAI) for May. The monthly index is designed to gauge overall economic activity and related inflationary pressure.

The US dollar continued its uptrend against the throughout last week, reaching a nine day-high at 98.49 on Friday.
Last Thursday the pair recorded a three-year low at 0.9161 following the US Federal Reserve’s two-day meeting and release of US Initial Jobless Claims data. The number of the people who filed for unemployment assistance in the week ended June 15 rose to 354,000, from the previous week’s revised 336,000.

The greenback remained stronger after Fed Chairman Ben Bernanke said that the central bank could begin slowing its $85 billion a month bond-buying programme by the end of this year.
There is no significant economic data for the quote scheduled for today.
The Canadian dollar was in focus on Friday following the official data which showed that the annualized Canadian consumer price inflation in May rose 0.7 percent, up from 0.4 percent in the prior period but lower than expectations for a 0.9 percent rise.
Following the release, the USD/CAD registered a two-year high at 1.0486, gaining 108 pips on the day.
This week’s relevant releases which should affect the pair are the Canadian monthly report on GDP, US revised data on first quarter economic growth, weekly government reports on initial jobless claims and personal income and expenditure data.
Last week the Swiss National Bank decided to keep its interest rate unchanged at zero, in line with expectations. The central bank reaffirmed the minimum exchange rate of CHF 1.20 per euro and said that it still anticipated growth in a range of one to 1.5 percent in the current year, though warning that economic risks remained high.
This week the USD/CHF should be impacted by the Swiss index for consumer spending for May and Swiss KOF Leading Indicat


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