Main events on June, 26-30

US Durable Goods Orders Soft Reading send Dollar Lower

The US Durable Goods Orders missed market expectation and has fallen -1.1% for the second consecutive month. The market consensus was for a -0.6% reading, but the weaker aircraft sales have prompted the fall in durable goods. The non-defense capital goods orders fell 0.2% while shipments also declined by 0.2%. The EUR/USD jumped higher on the news reaching 13-months high after it broke above 1.1430.

Mario Draghi QE Tapering Hints Pushed EUR/USD to 13-Months High

The ECB president Mario Draghi during a speech at the European Central Bank Forum on Central Banking, in Portugal has made the case for the unwinding of the QE program as the EU economy has strengthened in the last months. The ECB QE program stands at €60 billion/month, which brought the ECB balance sheet to $4.5 trillion. The EUR/USD rallied aggressively during the whole trading week due to the change in the ECB rhetoric.

BOE Carney Rate Hike Comments Strengthen the British Pound

The BOE governor Mark Carney in his speech at the European Central Bank Forum on Central Banking, in Portugal has hinted at the possibility that the BOE interest rate decision to keep rates at record low of 0.25% will factor in from now one the growth forecasts. The GBP/USD exchange rate rallied strongly the whole week on the prospects of higher interest rates, but it found resistance at the big psychological number 1.3000.

US Q1 GDP Revised Higher to 1.4% But the Dollar Remain weak

The US first-quarter GDP was revised higher from 1.2% previous reading to 1.4%. The excessive consumer spending readings were the main factor for the better US economic growth. The dollar continues to weaken against all major currencies, but both EUR/USD and GBP/USD have found resistance and begin consolidating the recent gains.

Unemployment Benefits Jumped Higher Weakening the Dollar

The US Initial Jobless Claims unexpectedly jumped higher by 4000 to 244k versus 240k market consensus. The news helped weaken the dollar even further. The broad-based dollar weakness was the main driver last week.

The UK Q1 GDP Puts Britain among the Weakest Major Economy

The UK GDP reading for the first quarter of 2017 was confirmed at 0.2 versus the 0.2% estimated. The British Pound weakened on the news, but the bearish momentum quickly faded away as the big psychological number 1.3000 acted as a magnet. The UK economy is still forecasted to grow by 1.7% in 2017.
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