Last week the US dollar gained ground against all the major group of currencies. The worst performer against the greenback was the British Pound: GbpUsd lost 340 pips at 1.4133(-2.35% weekly) as traders are incrementing their short positions on the pair in a strategy that would see a messy Brexit from the EU. Bank of England Governor Mark Carney stated that the BoE will support with liquidity the banking system in case of funding stress. When unknown consequences will be triggered by a known catalyst, in this case a referendum that mirrors high level of democracy in UK but opacity regarding the future, traders are discounting different scenarios. The implied volatility of GBP FX options soared far beyond the level reached during last year general elections, thus the financial community in its aggregate is ready to pay an high price to protect its British Pound positions. Mixed macro data with UK CPI monthly that was half the consensus increased the expectation of a prolonged dovish monetary policy; Retail Sale data however was above the estimates. The fact that UK Prime Minister reached an agreement with the EU last month, and was satisfied with the result, was not enough as will be UK citizens to decide. Quite the opposite of what happened in Greece last summer, with a referendum that said no to the conditions of the bailout but then the Greek prime minister signed the deal (Varoufakis, former Finance Minister then resigned). As the news flow regarding different scenario will increase, GBP traders will adjust their strategies accordingly. The Loonie dollar lost ground as well against the Greenback, but It seemed more profit taking on short UsdCad positions than a short term trend inversion. UsdCad rose 258 pips to 1.3261 ( 1.95% weekly) after it dropped for nine consecutive weeks. Oceanic currencies performance followed the performance of the Canadian dollar with NzdUsd at 0.6680 (-1.56% weekly) and AudUsd at 0.7501 (-1.25% weekly), with a loss in pips of 106 for the former and 95 for the latter.
UsdJpy rebounded 149 pips, thank to technical buyers as the pair found support on its 2016 low. The rate closed last Friday at 113.03 ( 1.32% weekly). EurUsd lost 107 pips last week at 1.1160 (-0.95% weekly), but it still trading inside its medium term trading range. Swiss Franc slid 68 pips gainst the Greenback and UsdChf closed at 0.9760 ( 0.70% weekly). US Indices closed off their intraweek highs and the S&P500 closed last Thursday at 2,035.94 (-0.36% weekly) but after five consecutive weeks of gains. The multiyear trend on US indices halted as it seems that gauges are developing a trading range, so far proved by the absence of higher highs and higher lows. Crude Oil lost 3.77% weekly at 39.59 $/barrel after 5 consecutive positive weeks and precious metals retraced as well, with Gold down 3% weekly at 1,216.7 $/oz and Silver at 15.2 $/oz (-3.86% weekly). On Monday at 12:30 GMT will be released in US Personal Consumption data followed by Pending Home Sales at 14:00 GMT. On Tuesday the most relevant event will be US Consumer Confidence at 14:00 GMT. On Wednesday will be released in Germany the CPI data and will be interesting to see if the YoY deflationary trend will keep its pace. At 14:30 GMT EIA Crude Oil Stocks Change. On Thursday German Unemployment Rate at 7:55 GMT and then UK Gross Domestic Product at 08:30 GMT. At 09:00 GMT will be the turn of Eurozone CPI, with an YoY expectation at -0.1% versus the former release (-0.2%). The Asian session will start with several Tankan data in Japan at 23:50 GMT and then in China will be released on Friday the Non Manufacturing PMI at 01:00 GMT followed by the Caixin PMI at 01:45 GMT. The European session will start with Swiss Retail Sales data at 07:15 GMT followed by Eurozone Unemployment Rate at 09:00 GMT. At 12:30 GMT the most important data of the day: US Non Farm Payrolls and Unemployment Rate. Jobs data are expected to decrease 37k from the previous month. At 14:00 GMT will be the turn of US ISM Price Paid and Manufacturing PMI. US Total Vehicle Sales will be the last event in the economic calendar.