Currency

The Week Ahead – Central Bank Chatter, COVID-19, and Stats from China and the U.S Key

On the Macro

It’s a quieter week ahead on the economic calendar, with 49 stats in focus in the week ending 14th January. In the week prior, just 63 stats had been in focus.

For the Dollar:

December inflation figures will be in focus on Wednesday along with wholesale inflation numbers on Thursday. Expect plenty of interest in the numbers, with inflation key to the FED’s policy moves for the year.

On Thursday, jobless claims will also draw interest ahead of retail sales and consumer sentiment figures on Friday.

With the markets now zoomed in on the FED, FED Chair Powell is due to give testimony on Tuesday before the Committee on Banking, Housing, and Urban affairs. Expect plenty of market interest, with FOMC member chatter in the week also needing consideration.

In the week ending 7th January, the Dollar Spot Index rose by 0.05% to 95.719.

For the EUR:

Unemployment and industrial production figures for the Eurozone will be the key stats early in the week. On Friday, Eurozone trade data will also draw interest.

Finalized member state inflation figures due out in the week should have a muted impact, however, barring any upward revisions.

On the monetary policy front, the markets will be looking for any shift in ECB stance on inflation. ECB President Lagarde is scheduled to speak in the week.

For the week, the EUR slipped by 0.08% to $1.1361.

For the Pound:

It’s a relatively busy week ahead on the economic calendar.

Industrial and manufacturing production figures are due out on Friday along with GDP and trade data.

Expect the GDP and manufacturing production figures to be key.

The Pound rose by 0.41% to end the week at $1.3588.

For the Loonie:

It’s a particularly quiet week ahead on the economic calendar.

There are no major stats due out of Canada to provide the Loonie with direction. With no stats to consider, the Loonie will be in the hands of crude oil prices and market risk sentiment.

The Loonie ended the week down 0.05% to C$1.2643 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Retail sales and trade data will be in focus on Tuesday. Expect retail sales to be the key stat, however.

The Aussie Dollar slid by 1.13% to $0.7181.

For the Kiwi Dollar:

Economic data is limited to building consents that should have a muted impact on the Kiwi Dollar.

The Kiwi Dollar ended the week down by 0.69% to $0.6779.

For the Japanese Yen:

There are no material stats for the markets to consider. A lack of stats will leave the Yen in the hands of market risk sentiment and yield differentials.

The Japanese Yen fell by 0.42% to ¥115.560 against the U.S Dollar.

Out of China

Inflation figures for December will draw interest on Wednesday. Expect any market pickup in inflationary pressure to test support for riskier assets. At the end of the week, trade data will also influence. Weak numbers could point to further supply chain disruption stemming from the Omicron strain.

The Chinese Yuan ended the week down by 0.34% to CNY6.3778 against the U.S Dollar.

Geo-Politics

Nothing new to consider in the week ahead, with China and Capitol Hill and Russia continuing to be the key areas of focus.

COVID-19

COVID-19 news updates will remain a key area focus. Risk aversion could hit should a new strain of the virus appear in a developed economy.