Here are the Top 5 Forex Developments for the trading week between 12/08/14 and 12/12/14:
Number One: Chinese Consumer Price Index/Producer Price Index
The Chinese economy experienced more problems in November as evident by the consumer price index and the producer price index. Worries about the Chinese economy have increased and applied pressures outside China as well. On Wednesday forex traders received the CPI which rose only 1.4% year-over-year while the PPI contracted by 2.7%. The disappointment helped advance the sell-off in commodity prices which forced commodity currencies down with it.
Number Two: Australian Employment Report
The Australian economy added 42,700 in November which powered past expectations which called for an increase of 15,000 jobs while October’s data was revised lower to show job gains of 13,700. The unemployment rate rose to 6.3%. The better than expected figure was largely due to a rise in part-time jobs which increased by 40,800; the Australian Dollar initially rallied, but commodity prices dragged down the Australian currency.
Number Three: Reserve Bank of New Zealand Interest Rate Decision
While the RBNZ left interest rates unchanged at 3.50% as expected, Governor Wheeler did mention that the central bank is aiming to increase interest rates in order to keep the economy well balanced. The unemployment rate is expected to continue to decrease while the economy is set to resume its expansion. This has boosted the New Zealand Dollar, but a set of weaker than expected economic reports have limited the upside.
Number Four: US Advanced Retail Sales
Retail sales in the US advanced by a surprising 0.7% in November while October’s data was revised higher in order to show an increase of 0.5%. Economists expected November to show an increase of only 0.4%. Retail Sales less auto rose by 0.5% against expectations which called for an increase of 0.5%. This bodes well for the holiday shopping season and the US Dollar surged after the release and resumed its advance throughout the week.
Number Five: UK Industrial/Manufacturing Production
Industrial production contracted 0.1% in October month-over-month and rose 1.1% year-over-year. Manufacturing production contracted 0.7% month-over-month and rose 1.7% year-over-year. This was a a big disappointment for forex traders who expected a monthly increase of 0.2% and a year-over-year increase of 1.8% and 3.2% respectively. The British Pound came under pressure.