Forex Weekly Outlook June 4-8 – Trade wars To Affect Markets

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Italian Crisis and Trade Wars Still Influencing Market

The trade talks between the U.S and China didn’t go as planned over the weekend and the pending trade war between the two leading economies could have an effect on the markets this week.

Monday, June 4: AUD & NZD Extend Gains; USD Broadly Weaker


The comdolls pair were able to record gains on Monday due to risk-on vibes, commodities rally, and Greenback weakness causing a spike in demand for the Aussie and Kiwi.

The Aussie was the top performer for the day largely due to positive Australian data released earlier, with the Kiwi also recording massive gains.

NZD/USD went up to trade at 0.7044, NZD/CAD also rose to 0.9096, and NZD/JPY went up to 77.11

AUD/USD was up to trade at 0.7660, AUD/JPY rose to trade at 83.84, and AUD/CAD also went up to 0.9891


The Greenback recorded some losses on Monday even though there were no apparent catalysts for this price movement. Market analysts revealed surprise at the weakness of the US Dollars after last week’s better-than-expected NFP report.

However, some of them pointed to the trade talks between China and United States which didn’t go as planned over the weekend as causing the currency to bleed. Further trade issues which saw the U.S earlier decides to push through with its planned tariffs on aluminum and steel imported from the E.U., Canada, and Mexico, causing its neighbors to impose retaliatory tariffs against the U.S

USD/JPY dipped to 109.45, USD/CHF also slipped to trade at 0.9833, and USD/CAD went down to trade at 1.2912

Market events of the week

Australian Rate Decision: Tuesday, 4:30.

The interest rate in Australia hasn’t been changed since 2016 by the Reserve Bank of Australia. The situation is expected to stay the same as Phillip Lowe and his colleagues aim to hold the Cash Rate at its current 1.5%. Even though the RBA had earlier raised its growth forecasts for this year, it is in no hurry to do the same for rates.

UK Services PMI: Tuesday, 8:30.

This is the most important purchasing manager’s index published in the UK for the service sector, which is the largest sector in the region. For April, 52.8 points was released, which was below expectations but shows a modest growth rate in the sector. For May, it is expected to raise a point further to 52.9.

US ISM Non-Manufacturing PMI: Tuesday, 14:00.

This is one of the first indicators of the U.S economy and it dropped by 2 points to 56.8 for April. This time around, there will be no NFP to overshadow it and it is expected to rise to 57.9 for May.

US JOLTS Job Openings: Tuesday, 14:00.

This report has been playing catch up with the others as the data for April will be released this week. In March, the annualized level of job openings went up to 6.55 million, which represented a multi-year high. It is however expected to drop to 6.49 million for April.

Australian GDP: Wednesday, 1:30.

This GDP report is coming late but it is released only once, unlike the U.S that has two revisions. The economy of Australia disappointed in the last quarter with a slow growth rate of 0.4% q/q. For the first quarter of the year, it is expected to rise to 0.8%

Canadian jobs report Friday, 12:30.

The job report in Canada will be the last major event of the week and will decide the direction of USD/CAD since the U.S NFP has already been published. In April, a total of 1,100 jobs were lost in Canada which was a rather disappointing outcome. For May, a bounce back is expected, with the unemployment rate expected to stay at 5.8% for the third month in a row.


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