Another busy week in the forex market ending the 16th august that saw the kiwi dollar performing poorly in the and the greenback sliding back to the reds.
Coronavirus forex news predominated trading forecast of the G7 currencies. Global forex sentiments and economic data also featured in the foreign exchange market.
This article aims to provide an in depth economic review of the g7 currencies.
Fundamentals That Affected Forex Trading Forecast
Several forex trading signals affected forex trading forecast this week as outlined below:
Positive Sentiments
Russia ignited positive global forex trading signals as it announced development and registration of covid 19 vaccine in the war against the infectious diseases. It became the first country to register a vaccine against the coronavirus.
President Vladimir Putin expressed confidence in the vaccine and indicated that one of his daughters received a dose of the vaccines against the coronavirus disease.
Germany also expressed optimism that it would develop covid 19 vaccines, possibly in a few months or early next year. The development of an effective vaccine is a sure way to fight this disease.
Negative Sentiments
Towards the end of the week, positive global sentiments turned negative as the US congress hit a stalemate over the covid 19 stimulus package.
Under the prevailing covid 19 infection ravages and new spikes of covid 19, questions and doubts continue to arise daily towards sustainable economic recovery efforts worldwide.
The Coronavirus Pandemic
Despite the ray of hope on covid 19 vaccines, the war on the infectious viral disease is not over. And globally, confirmed cases of the virus infection continues on the rise.
As on Sunday, the 16th confirmed cases stood at 21.5 M while recoveries were 13.5M. Sadly, fatalities reached 0.772M. The coronavirus pandemic continues to ravage world economies and undermines efforts to recovery.
Economic Data
Many countries, including China, released their economic reports that were skewed to the positive. Economic data of China has a direct impact on trade-related assets like the Australian dollar and Canadian dollar.
Additionally, China posted an improved economic outlook stirring positive global risk sentiments. Interestingly, it managed to register an improved economy despite the coronavirus threats and floods.
Review of G7 Currencies Trading Forecast
Table: Summary of G7 currencies trading forecast
| currency pair | 10th Aug | 16th Aug | average | percentage change | remarks |
| USD | 93.569 | 93.085 | 93.396 | 0,350 | drop |
| GBP/USD | 1.3070 | 1.3084 | 1.3059 | 0.2375 | drop |
| EUR/USD | 1.1736 | 1.1841 | 1.1782 | 0.4496 | increase |
| USD/JPY | 105.95 | 106.59 | 106.57 | 0.63 | increase |
| USD/CAD | 1.3350 | 1.3266 | 1.3276 | 0.8854 | drop |
| AUD/USD | 0.7149 | 0.7171 | 0.7154 | 0.1816 | increase |
| USD/CHF | 0.9156 | 0.9090 | 0.9126 | 0.3836 | drop |
| NZD/USD | 0.6589 | 0.6538 | 0.6565 | 0.9994 | drop |
USD Forecast Back To The Reds
It was yet another bad week for the American dollar that traded in the reds. The dollar spot index dropped by 0.36% to close at 93.096 on a choppy and mixed week.
In the previous week and early part of this week, the usd forecast flexed its muscles and showed signs of improvement. However, it went downwards mid-week to close in the reds.
Negative forex trading signals among traders due to lack in progress toward the coronavirus recovery stimulus package primarily weighed on the dollar.
The democrats could not agree with President Trump on the coronavirus stimulus package leading to a stalemate. Despite posting positive economic data, the negative sentiments were too much for the dollar.
On a sour note, the continuing spikes of coronavirus, and deaths in the US continued to pound recovery efforts of the usd forecast.
On the other side of the world, positive global risk sentiments ignited by positive covid 19 forex news pulled inventors towards the riskier market. Russia developed and registered the Global’s first vaccine against the infectious viral disease.
The American economic calendar was very busy. First, inflation figures skewed upwards while the producer price index upped by 0.6%. The consumer price index did not disappoint either.
More support for the dollar came from the drop in weekly jobless claims that eased down for the 2ndconsecutive week. Not to be left behind, industrial production and retail sales continued on the upswing momentum.
GBP/USD
No major pound forex news in Britain that led to the mixed performance of the sterling pound. However, Britain posted poor economic data that scared away forex traders towards other markets.
In the pound forex news, unemployment numbers and claimant count numbers forex trading signals were in focus on Tuesday. In the UK, persons claiming unemployment benefits increased by 94.4k to weigh heavily on the sterling pound.
On the other hand, the unemployment rate remained constant at 3.9%.
According to pound forex news released on Wednesday for the 2nd quarter GDP and manufacturing production, the manufacturing production figures improved by 11%, while the GDP data shocked…
According to pound forex news, the UK’s GDP shrinks further by 20.4 %, having contracted in the first quarter by 2.2%. More damage to the pound forex news came from continuing spikes in covid 19 new cases and deaths.
Over the week, the pound increased by 0.26% to close at 1.3086, having fallen by 0.25 in the previous week.
EUR/USD
The EU had a relatively busy week in terms of economic activities. Many countries posted good economic data. And the Eurozone also improved significantly. While production figures increased by 9.5%, the Eurozone’s GDP contracted.
In the 2nd week of August ending on 16th, the euro rallied by 0.47% to close at 1.1842 after improving dismally by 0.08% in the previous week.
The EUR ended the week safely on the green. It drummed up much strength from continuous improvement in Europe’s sentiments and global risk aversion forex sentiments. Over the week
Eurozone posted a dropped GDP by 11.7%and a decline in employment by 2.8%. Also, industrial production in the Eurozone went upwards. Usually, global positive forex trading signals scare investors away to the risky markets.
Risk aversion sentiment as the US congress hit a stalemate on a new stimulus package.
Furthermore, low confidence in global economic recovery sustainability resulted in added aversion measures. The continued spikes in coronavirus new cases globally have greatly hampered global economic recovery efforts.
USD/JPY
According to usd jpy forex news, Japan had a busy week on the economic calendar. The yen dropped by 0.64% to close at 106.6 against the greenback. In the previous week, it had increased slightly by 0.09%
The usd jpy forex news suggests that the continuing spikes in covid 19 new cases in japan weighed heavily on the yen. Furthermore, usd jpy forex news indicated that Japan posted very good economic data, but the yen performed poorly.
The Japanese yen trading forecast was mainly driven by counter currency flow and positive global risk sentiments.
Positive global risk sentiments ignited by improved economic data of China and covid 19 forex news vaccine developments and registration by the Russians. Other positive financial reports from other economies only served to weaken the yen’s trading forecast.
AUD /USD
The Australian dollar trading forecast fluctuated over the week to gain 0.20% and close at 0.7171. It was primarily driven by covid 19 new spikes and improving economic data from China’s forex trading signal.
Australia posted improved economic data, but it was pressured downwards by coronavirus infection rate. Economic data in focus included consumer confidence, business confidence, wage growth, and unemployment numbers.
Both the consumer and business confidence declined due to covid 19 new spikes. However, wage growth and employment figures provided support for the Aussie.
USD/CAD
Canada had a relatively quiet calendar leaving trading forecasts of the Canadian dollar to global positive economic updates. Economic data released focused on manufacturing sales and housing statistics.
Oil prices primarily drove Lonnie’s forex trading forecast, economic data, and global forex sentiments to rally by 0.88%. It closed the week at 1.3266, following a 0.21% gain in the previous week.
Better than expected economic data from China boosted the Canadian dollar trading forecast. On top of that, improved oil prices early in the week pushed the Lonnie upwards. Also, more support came when there was more news on improved global economic data.
Towards the end of the week, sentiment turned positive on improved financial data, significantly uplifting the Lonnie.
USD/CHF
It was relatively quiet in Switzerland in the economic calendar. The Swiss franc rallied against the dollar to close at 0.9156 while gaining 0.3836% against the dollar.
Early in the week, Swiss franc lost much value sparked by global positive risk sentiments attributed to China’s improved economy and coronavirus vaccine news.
However, toward the end of the week, it received strength from negative risk aversion sentiments ignited by the US congress failure to strike a deal on a new US recovery package.
NZD/USD Top Loser
Thanks to nzd usd forex news of lockdown measures reintroduction and a possible negative interest rates policy from the Reserve Bank of New Zealand, the kiwi trading forecast ended in the red.
In the second week of August, the kiwi dropped significantly by 0.95% to close at 0.6542. Critical statistics in nzd usd forex news included business confidence and retail sales.
The NewZealand’s business confidence level dropped by 10 points. The kiwi forex trading forecast was pushed down by negative global sentiments fuelled by the US economic recovery stalemate, and negative updates from the US.
Moreover, more lockdowns in Auckland proved fatal to the kiwi, while interest rates remained unchanged at 0.25%.
Nzd usd forex news hopes on vaccines and economic data provided some support to the kiwi but not enough to save it from the reds. NewZealand’s business confidence went down while retail sales increased dismally.
As NewZealand reported a new covid 19 case in three months, it went on a bearish run over the week’s trading forecast.
Conclusion
Over the end of the week, economic data, global sentiments, and covid 19 pandemics combined forces to affect the trading forecast of the g7 currencies.
The NewZealand dollar emerged as the biggest loser while the Canadian dollar was the week’s top gainer.
Notably, the greenback continued losing its status as a safe-haven currency during harsh economic conditions.