Forex Weekly News Review: June 5 - 9

The week started with the market positioned against the US dollar, but with a few exceptions, the greenback gained traction against most major currencies by the end of the week. The US posted weaker economic figures starting with the US ISM Non-Manufacturing PMI that come in slightly below market expectation at 56.9 versus 57.5 previous readings.

On Thursday, the RBA left rates unchanged pushing the AUD/USD exchange rate towards 0.7565 a 6-week high. The following day we had the Australian GDP, which posted a modest 0.3% growth rate.

On Thursday we had a busy economic calendar with plenty of risk events on the docket. We started the day early during the Asia session when the Chinese Trade Balance figures come out stronger than anticipated. Exports rose 7%, while imports rose 8.5%. China Trade Balance has widened to 282 billion.

The ECB president has also announced the QE program will continue until the end of the year and if needed will be extended beyond which was the catalyst for EUR/USD exchange rate dropping to 1.1168. The ECB monetary policy was also kept unchanged.

The UK parliamentary election has concluded the day with a shock as current PM May as failed to gain a majority vote in the new legislature. The immediate market reaction was to sell GBP/USD as the election results can jeopardize the Brexit talks.

On Friday we concluded the week with the main risk event being the UK Manufacturing production, which disappointed again for 4 consecutive weeks. The market consensus was a reading of 0.8%, but we had a modest actual reading of only 0.2%, which is higher than the previous reading of -0.6%. The GBP/USD had another round of selling pressure due to the weaker manufacturing activity and broke to 1.2633 a 7-week low.
See also:
Weekly Forex technical forecast November 19 - 23.
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