Forex Weekly Outlook – Dec. 25-29 2017

The last week before the holidays saw the dollar mostly lower, with the exception of the Japanese yen. What’s next? The last week of 2017 is a holiday week that features low trading volume and liquidity. This usually results in quiet trading, but can also see surprising sparks. There are very few events, but they could trigger an outsized response given the conditions. Here are the highlights for the upcoming week.

Congress passed the tax bill in back and forth process and everything is ready for Trump’s signature. The news was supposed to help the US dollar but was basically priced in. US data was mixed: big beats on building permits and housing starts were countered by a miss on durable goods orders. The final read of US GDP for Q3 was marginally lower: 3.2%. All in all, the economy is doing well. The Canadian dollar enjoyed the positive inflation and retail sales numbers while the pound was attuned to political developments related to Brexit, as usual, but received a small upgrade on annual GDP.

Crypto-currencies stole the show with huge volatility amid the inclusion of bitcoin in CME’s futures trading. They had a terrible Friday. Here are 5 reasons for the crypto-cash and updates on 5 coins.

Updates:

  • US CB Consumer Confidence: Wednesday, 15:00. The Conference Board’s measure of consumer confidence reached a new high in November: 129.5 points. The last read for the year may be even higher thanks to the holiday season.
  • US Pending Home Sales: Wednesday, 15:00. Sales of homes pending the closing transaction jumped by 3.5% in October after three months of disappointments. We may see a slide in November.
  • US jobless claims: Thursday, 13:30. This weekly barometer of the labor market disappointed with a jump to 245K last time. We could see it sliding back to the 230Ks now.
  • Chicago PMI: Thursday, 14:45. This purchasing managers’ index is usually overshadowed by bigger events but could have its say this time. After standing at the high level of 63.9 points in November, the fresh release for December will find it hard to reach higher ground. However, it had already reached higher ground. The 50-point mark separates growth from contraction.
  • German CPI: Friday, during the European morning with the final release coming at 13:00. Prices in Europe’s third-largest economy rose by 0.3% in November and its early publication will shape the numbers for all the euro-zone. Draghi’s dovishness is based on poor inflation in the euro-zone. We’ll now get an early look while liquidity is super-low just ahead of the New Years’ Party.
  • *All times are GMT

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    Further reading:

    • EUR/USD forecast – for everything related to the euro.
    • GBP/USD forecast – Pound/dollar analysis
    • USD/JPY forecast – outlook for dollar/yen
    • AUD/USD forecast – projections for the Aussie dollar.
    • USD/CAD forecast – Canadian dollar predictions

    Safe trading!


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