Week in FX Americas Helicopter Ben leaves the Door Open

Anyone looking for some clear evidence from Bernanke on the Fed’s next steps in Jackson Hole was left disappointed ahead of the long weekend. He again pledged to provide additional support as needed, without mentioning any new specific bond buying program. The central banker sees continued economic weakness and called the state of the labor market a “grave concern.” A good deal of his highly anticipated speech was defending the effectiveness of his past actions. However, he stopped short in “tipping his hand,” saying that of the tools currently available to policy makers, “we should not rule out further use of such policies if economic conditions warrant.” He indicated that the Fed “will provide additional policy accommodations as needed.” He went on to state that additional bond buying and forward rate guidance “have been and can continue to be effective” in providing economic support. All of this would suggest that he is leaning in the way of action, without actually saying so.

Below are some other highlights of the week:


  • USD: The S&P’s Case-Shiller report shows average home prices up on a year over year basis for the 20-city index. At +0.5% it’s a concrete sign that prices are beginning to stabilize.
  • USD: The CB consumer confidence fell to 60.6 from 65.4 in August, the lowest reading in ten-months. This was mostly on the back of business and job prospects declining.
  • USD: The Richmond Manufacturing Index saw economic activity shrinking again this month, though at a slower pace (-9 from -17). The service sector recovered a bit -6 from -11, while the employment weakened, down six points to -5. Over the last two weeks bot the empire and Philly fed recorded similar results and raising concerns about a widespread US manufacturing slowdown.
  • USD: US GDP growth grew at +1.7% rate in Q2, up slightly from the prior +1.5% reading, though the overall pace suggests growth will remain sluggish ahead of the Presidential election. It’s growing enough to hold US unemployment rate steady and nothing more than that.
  • USD: The NAR said that its seasonally adjusted index for pending sales of existing homes increased +2.4% in July from a month earlier to a reading of 101.7. This is the highest print in two years when buyers took full advantage of federal tax credits. The index was up +12.4% year-over-years.
  • CAD: Canada’s current a/c deficit widened (seasonally adjusted -$16.02b) more than expected in Q2 to the highest level in two-years as energy exports to the US fell and imports grew, resulting in the goods balance slipping back into a shortfall after three consecutive surpluses. Exports declined by -$3.6b to +$117.15b while imports grew by +$2.3b to -$120.76b.
  • USD: The number of US workers filing applications for jobless benefits has stabilized in recent week (last week claims were unchanged at a seasonally adjusted +374k), suggesting that the pace of layoffs has fallen since spring. However, job creation is likely to remain tepid at best. Ben continues to closely monitor the US job situation as they eye further stimulus.
  • USD: US personal spending rose the most in five months (+0.4% in July), a sign that “wary consumers are beginning to come out of their shell.” Consumer spending counts for two-thirds of total demand in the US economy. Personal income rose +0.3% in July. Income is now up for the eight consecutive months. The same month’s savings rate fell to +4.2% from +4.3% (the highest recorded level in a year).
  • CAD: The Canadian economy grew faster than expected in Q2 (+1.8% vs. +1.6% annualized or +0.5% quarterly) as businesses replenished inventories and invested in plants and equipment by the most in a year. Net exports were a bigger drag on growth as imports grew 8-times faster than exports.
  • USD: Chicago PMI suffered a slide in their order backlogs (lowest level in three-years) during this month, sending the business barometer down to 53.0 from 53.7 in July. Supplier deliveries also contracted, while production and new orders both advanced on the month.
  • USD: Factory orders rose by +2.8% in July, handily beating consensus +1.9%. Ex-transportation and orders rose only +0.7% and that after a downwardly revised -2.2% decline in June.



ASIA Week in FX



  • It’s monetary policy announcement week, AUD, CAD, GBP and EUR
  • Employment focus in AUD, CAD and USD
  • Retail Sales and Trade headlines come to us from AUD and CHF
  • Manufacturing data is produced in GBP and USD
  • Inflation numbers are released in CHF and CNY
  • CAD has building permits
  • EUR has the Spanish 10-year auction to take down


Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell