Weekly forex forecast this week ending 5th of July was full of positive economic data that supported riskier forex markets to hammer the safe-haven currencies.
Furthermore, fx news in the coronavirus vaccines’ progress ignited positive global sentiments, adding more injuries to the safe-haven currencies.
However, surges in new cases of the virus in the US mainly scared investors from the riskier market and counteracted the effects of positive global sentiments.
Weekly Forex Forecast Fundamentals
The coronavirus continued increasing numbers, and economic data predominantly drove the forex market fundamentals.
Also, changes in oil prices affected commodity-based economies, as discussed below in detail.
Coronavirus
Currently the total number of confirmed cases of coronavirus stood at 11.3 million at the end of the week has risen by 1.3 million globally.
This week’s increase was higher than in the previous week’s increase of 1.1 million globally.
Fatalities stood at 0.53 million, while recoveries were 6.4 million worldwide.
Evidently, the world continued to encounter an upward trend in COVID-19 infections over the week.
Notably, most of these cases emanated from the US.
“Scientists from different countries are developing more than 145 vaccines against the coronavirus and 21cvaccines are in human trials”, as reported by New York Times magazine.
On the positive mood, BioNTech and Pfizer’s coronavirus trial generated positive results adding more hope in the fight against the virus.
Economic Data
Economic data forex news affected the forex market this week.
Many countries continually reported improved economies which drove investors towards the riskier markets, while shying away from the safe-haven currencies.
The economic data of importance include GDP, employment numbers, production, retail sales, spending, consumer confidence, and nonfarm payrolls.
As the world economies continue to reopen, many of them posted improved economies in the week.
For instance, the European Union, China, and the USA reported improved economic data.
Crude Oil Prices
Oil prices went on an upwards trajectory primarily supported by low inventories and sustained production cuts from OPEC.
However, oil prices received pressure from a surge in coronavirus cases and revived lockdown measures, mostly in many States of the US, including other world economies.
The crude oil prices weekly forecast rallied during the week to register a dismal 1% price increase to reach $40 per barrel.
Weekly Forex Forecast Performance of G7 currencies
Table: G7 currencies weekly forex forecast performance summary
| Currency pair | 29th June | 5th July | average | Percentage change | remarks |
| USD | 97.501 | 97.301 | 97.321 | 0.106 | drop |
| EUR/USD | 1.1242 | 1.1249 | 1.1243 | 0.2674 | gain |
| GBP/USD | 1.2299 | 1.2485 | 1.2425 | 1.2161 | gain |
| USD/JPY | 107.57 | 107,57 | 107.59 | 0.32 | gain |
| USD/CAD | 1.3659 | 1.3547 | 1.3587 | 1.0432 | drop |
| AUD/USD | 0.6865 | 0.6942 | 0.6910 | 1.1511 | gain |
| USD/CHF | 0.9513 | 0.9459 | 0.9471 | 0.2373 | drop |
| USD/NZD | 1.5874 | 1.5298 | 1.5395 | 1.7091 | drop |
USD — Economic Data Improves while the Dollar Weakens
The American dollar experienced another week of consecutive weekly loss.
The US’s economic report was highly encouraging in the forex market this week, but disapprovingly the dollar edged lower by 0.27 % to close at 97.172.
In the previous week, the greenback had lost 0.19%.
The performance of the greenback was driven by coronavirus pandemic and economic data, mostly from riskier markets.
The US administration reported good economic data where there were notable performances in the nonfarm payrolls, consumer spending, consumer confidence, and drop in employment records.
The improved economic performance could be attributed to its monetary policies and vigorous fiscal plans.
Rising cases of the coronavirus hammered the dollar, with the US contributing approximately a quarter of the 11.3 million global infections.
Many states in the US have halted easing on the lockdown measures while others have reimposed them.
On Thursday, the United States recorded more than 55,000 new coronavirus cases, a daily global record for the COVID-19 pandemic.
Additionally, the weekly forecast shows that improved economies of riskier markets such as Canada worked against the dollar.
EUR/USD
The euro fluctuated against the greenback in the forex market this week in review to edge upwards 0.2674% to close at 1.1248.
Economic data and COVID-19 infections drove weekly forecasts affecting the EUR/USD currency pair.
The euro found much support from improved economic data in most of its member states and increasing infections in the US.
Besides, the euro gained sharply as the EU central bank announced plans to expand its coronavirus recovery stimuluspackage by 600 billion euros, on Thursday.
However, Brexit talks uncertainty braked the euro weekly forex forecast bullish run.
GBP/USD
The cable performs well to net 1.2% gain to close at 1.2485. Economic data and COVID-19 pandemics drove GBP/USD weekly forecast.
However, the upward trend of the sterling pound was checked by good financial data of the US;
Appetite for riskier markets lifted the pound to close 1.2671% higher, to regain from a previous week’s loss of 0.11%.
Britain recorded a drop in its GDP by 2.2%, contrary to an earlier projection of 2.0% by economists.
However, the weak economic data of the UK, combined with uncertainty in Brexit talks, pushed the pound down.
The increasing cases of coronavirus infections is another forex fundamental that weighed heavily on the pound also.
USD/JPY
According to investing.com, the USD/JPY currency pair gained 0.32% over the week.
This currency pair received mixed reactions from investors in response to fx news in the forex market.
In comparison, the dollar was dumped by the forex market investors when risk was on and favored when risk was off.
Looking at the weekly forex forecast, the American dollar received support from its improved economic data.
Despite this good news, the rising cases of COVID-19 in the US pulled the dollar downwards while uplifting the yen.
Also, increased weekly forex forecast jobless claims reported in the US negatively affected the dollar.
Japan had a weak economic report that helped weaken the yen according to the weekly forecast.
USD/CAD
Support for the Canadian dollar came from good news on its improved economic data according to the weekly forex forecast.
The commodity-sensitive loonie also renewed its strength from improved oil prices.
Furthermore, the loonie received a much-needed boost from improved economic data from the US and hopes on coronavirus vaccines.
It rose by 0.27% to close the week at 1.3547, partially reversing a previous week’s loss of 0.60%.
However, the Canadian economy shrunk by 11.6% compared to an earlier projection of 13% to pressure the Canadian dollar downwards.
Also, increasing cases of COVID-19 had investors embark on risk aversion measures to favor the greenback as a safe haven.
AUD/USD Bullish Run
Weekly forex forecast shows that the Australian dollar traded in the green rallying against the American dollar throughout the week ending 5th July.
The AUD/USD g7 currency pair started the week at 0.6865 to close higher at 0.6910, having gained 1.511%.
Forex forecast for the Australian dollar painted a very busy week. Improved economic data from China, the European Union, and the US fx news supported the Aussie.
On the other hand, the increasing cases of the coronavirus in the US slowed the Aussie’s upbeat mood.
Moreover, the weekly forex forecast indicates that progress towards the coronavirus vaccine downplayed the effects of the rising cases of COVID-19 in the forex market.
USD/CHF
A perceived risk in the forex market weighed heavily against the Swiss franc.
The global market turned optimistic on a potential vaccine for the coronavirus pandemic.
The continued increase in new COVID-19 cases that could lead to another round off lockdown measures made investors jittery.
The American dollar edged lower in the forex market against the safe-haven Swiss franc losing 0,2373% to close at 0.9459 on a bearish run.
In the weekly forex forecast, the currency traded in the red from Tuesday to Thursday in reaction to coronavirus vaccines progress, while Monday and Friday were green.
On Friday, investors focused on fx news on the US’s economic data to support the dollar.
USD/NZD Trades in Reds
The USD/NZD currency pair started the forex market this week at 1.5574 dropping daily to close at 1.5298, having lost 1.7091% on 5th July.
Though not much, the kiwi received leverage from the improved economic report of New Zealand.
Interestingly, the kiwi found much strength from improved economic data from China, the EU, and the US.
The rising cases of the virus fx news helped the kiwi also, as investors engaged risk aversion measures.
Conclusion
Except for the Swiss franc, the American dollar lost against all the other g7.
The performance of the foreign exchange currencies was primarily affected by improved world economies, progress in COVID-19 vaccines, and the continued increasing cases of the virus.
The above fundamentals will continue to affect the forex market in the weeks to come.