Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (February 6, 2014)

USD

The US dollar edged lower than most of its major counterparts in recent trading, as data from the US economy came in mostly weaker than expected. The ADP non-farm employment change figure showed a 175K increase, lower than the projected 191K figure, while the previous month’s figure suffered a downward revision. The good news though was that the ISM non-manufacturing PMI came in better than expected, as it climbed from 53.0 to 54.0. For today, the trade balance, initial jobless claims, and preliminary non-farm productivity and labor costs are up for release.

EUR

The euro chalked up small gains to the Greenback when euro zone data showed improvements. Spain’s services PMI ticked up from 54.2 to 54.9, but missed the consensus at 55.3. Italy’s services PMI improved from 47.9 to 49.4, indicating a slower pace of contraction. However, euro zone retail sales printed weaker than expected results, as the figure declined by 1.6%. Today’s big event for the euro is the ECB interest rate decision, which might spark volatility for euro pairs.

GBP

The pound struggled to hold on to its recent gains when the UK printed a weaker than expected services PMI. The figure fell from 58.8 to 58.3, indicating a slower pace of expansion in the industry. The BOE is set to make its interest rate decision today and no monetary policy changes are expected. However, any change in the rhetoric of the central bank might have a material impact on the pound’s movement.

CHF

The franc consolidated to the dollar in recent trading since there were no major reports released from Switzerland. The Swiss SECO consumer climate report is up for release today and an improvement from -5 to 0 is eyed. Swiss trade balance is also due today and a wider surplus is expected, which might be enough to give the franc a boost against its counterparts.

JPY

The yen gave up a bit of its gains as risk appetite improved in yesterday’s trading, contributing to a positive close for the Nikkei. There are no major reports lined up from Japan today so risk sentiment might be responsible for driving yen pairs around today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the recent bounce in risk appetite recently, with AUD/USD climbing above the .8900 handle. However, Canadian building permits printed weaker than expected results, as the figure showed a 4.1% decline instead of the estimated 2.3% increase. Earlier today, Australian retail sales printed a 0.5% uptick while NAB business confidence improved from 5 to 8. Later on, Canada will release its Ivey PMI and is expected to print a rise from 46.3 to 51.3 and show a return to expansion for the manufacturing industry.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 7, 2014)

USD

The US dollar was stuck in consolidation against most of its major currency counterparts, although US data came in weaker than expected yesterday. Preliminary non-farm productivity was higher than expected for the previous quarter so unit labor costs for the same period were understandably lower, which means that laborers had a smaller take-home pay for the three months up to December. Today the non-farm payrolls report is up for release and might show a rebound from the bleak December figures. However, cold weather conditions still affected several US states in January, which could lead to another weak jobs report.

EUR

The euro had a brief rally after the ECB interest rate statement, as Draghi sounded less dovish than usual. He pointed out that interest rates will remain low for an extended period of time but remarked on the improving business conditions. Other policymakers also dismissed the possibility of deflation weighing on overall economic performance. German trade balance and French government balance are the only reports due from the euro zone today, as the NFP might play a bigger role in EUR/USD price action.

GBP

The pound moved sideways in yesterday’s trading, as there were no surprises in the BOE rate statement. The central bank decided to keep interest rates and asset purchases unchanged for the meantime, even though there have been considerable improvements in the UK economy. Manufacturing and industrial production reports are lined up for today, along with the trade balance release.

CHF

The franc formed a tighter consolidation pattern to the dollar yesterday when Swiss data came in mixed. The SECO consumer climate figure jumped from -5 to 2, surpassing the consensus at 0 and indicating improving consumer confidence. However, the trade balance missed the forecast and showed a smaller than expected surplus while the previous month’s figure was revised down. Swiss foreign currency reserves and retail sales data are up for release today and might show improvements, which could then support the franc.

JPY

The yen was beaten up by the improvement in risk sentiment in recent trading, as there were no reports from Japan for the currency to draw support from. Only the Japanese leading indicators figure is up for release today and it might show a small improvement from 111.1% to 111.9%, which could be positive for the Nikkei and risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance in recent trading, with the Aussie ending positive and the Kiwi ending in the red. The Loonie consolidated to the dollar despite the strong Ivey PMI figure since data from the US came in weak. The Ivey PMI climbed back above the expansionary level, which helped keep the Loonie afloat. Canadian jobs data is up for release today and a 19.7K rebound in hiring is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 10, 2014)

USD

The US dollar closed Friday on a weak note because the US non-farm payrolls report printed weaker than expected results. The actual figure came in at 113K versus the estimate at 180K, following December’s dismal jobs data. However, the jobless rate ticked down from 6.7% to 6.6% in January, mostly because of a decline in the participation rate. Traders are starting to price in dovish remarks for Yellen’s first testimony in front of Congress this week. There are no major reports due from the US today so the post-NFP reaction of the dollar might carry on.

EUR

The euro had a nice rebound on Friday, thanks to better than expected medium-tier data from Germany and France. The shared currency also took advantage of dollar weakness after the bleak NFP release. The German trade balance showed a higher than expected surplus of 18.5 billion EUR versus the estimate at 17.3 billion EUR while the previous period’s figure was revised higher. The French trade balance also printed good results, with a smaller than expected trade deficit. French and Italian industrial production figures are up for release in today’s London session, along with the euro zone Sentix investor confidence report.

GBP

The pound was able to bounce off its previous lows on Friday, although UK reports came in mixed. Manufacturing production increased by 0.3%, weaker than the estimated 0.6% growth, while the previous month’s figure was revised down to show a 0.1% decline. However, the trade balance turned out better than expected with a smaller shortfall of 7.7 billion GBP instead of the estimated 9.3 billion GBP deficit. There are no reports lined up from the UK today so the pound might be in for a bit of consolidation.

CHF

The franc was able to benefit from dollar weakness last week, as USD/CHF edged back to the bottom of the rising channel on its short-term time frames. Data from Switzerland has actually been weaker than expected, with a mere 2.3% increase in retail sales versus the estimated 3.9% gain and an increase in foreign currency reserves. The Swiss jobless rate is up for release today and a 3.2% figure is eyed, same as the previous month’s reading.

JPY

The yen lost ground to its major counterparts on Friday as risk appetite improved in the earlier sessions. However, volatility for USD/JPY picked up when the US NFP figure was released, although the yen still ended the day with losses. Earlier today, Japan printed a weaker than expected current account balance of -0.20 trillion JPY versus the estimated 0.06 trillion JPY shortfall. No other reports are lined up from Japan today so risk sentiment might push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to rake in more gains to the dollar on Friday, with the Loonie and Kiwi both ending up successful. Jobs data from Canada was better than expected, as the economy added 29.4K jobs in January and pushed the jobless rate down from 7.2% to 7.1%. Canadian housing starts are up for release today and another strong figure might push USD/CAD to new lows. No reports are due from Australia and New Zealand today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 11, 2014)

USD

The US dollar continued to lose ground to most of its major counterparts, despite the lack of top-tier data released in the latest New York session. Traders are starting to price in dovish remarks from Fed head Yellen, as jobs data have posted consecutive misses. Take note that Yellen’s speech will be released early on the Fed’s website to price action could pick up even before her actual testimony in Congress.

EUR

The euro edged slightly higher in recent trading even though data from the euro zone came in weak. French industrial production fell by 0.3% instead of the estimated 0.1% dip while Italian industrial production declined by 0.9% instead of staying flat. However, Sentix investor confidence came in stronger than expected at 13.3, up from 11.9. There are no reports lined up from the euro zone today.

GBP

The pound struggled to hold on to the 1.6400 major psychological level against the dollar since there were no major reports released from the UK yesterday. There are still no reports lined up for today so pound movement might depend on risk sentiment and US events.

CHF

The franc took advantage of recent dollar weakness, allowing USD/CHF to break below the rising channel on its 4-hour chart. Swiss jobless rate held steady at 3.2% as expected, allowing the franc to hold on to its gains. There are no reports due from Switzerland today.

JPY

The yen gave up more ground to its counterparts when risk sentiment continued to improve. Japanese current account data came in below consensus while the money supply was as expected. There are no reports lined up from Japan today since traders are on holiday. Volatility among yen pairs might be a little higher because of the low liquidity in today’s Asian trading session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground to the dollar even though there weren’t much reports released yesterday. Earlier today, Australian reports came in mixed with a higher than expected quarterly HPI but a sharp drop in home loans. However, the NAB business confidence came in strong with an improvement from 6 to 8. Over in China, the PBOC announced its expectations of more volatile money market rates and higher borrowing costs, reviving concerns of a default in the nation. Up ahead, Canada’s government budget release is due.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 12, 2014)

USD

The US dollar experienced some volatility during Janet Yellen’s testimony in front of Congress in the latest US trading session. However, her speech didn’t contain any surprises as she simply confirmed that the Fed would carry on with its taper plans originally set by former Fed head Bernanke. There are no major reports lined up from the US today so dollar behavior might hinge on risk sentiment. Still, keep an eye out for the release of crude oil inventories and the Federal budget balance in today’s New York session.

EUR

The euro gave up some of its recent gains to the dollar when Yellen emphasized that the US central bank would carry on with its taper plans. There were no reports to keep the euro supported then. Euro zone industrial production is up for release today and a 0.2% decline is expected to follow the previous month’s 1.8% jump. ECB President Draghi is also set to testify and might spur additional volatility among euro pairs.

GBP

The pound spiked up to the dollar in recent trading but lacked the momentum to push higher. The BRC retail sales monitor showed a 3.9% increase, better than the previous 0.4% uptick. The BOE inflation report is up for release today, along with BOE Governor Carney’s speech. No major announcements are expected so it will be interesting to see whether Carney retains his previous monetary policy bias or not.

CHF

The Swiss franc returned some of its recent returns to the US dollar, as there were nor reports from Switzerland to give the franc a boost in recent trading. Swiss CPI is up for release today and a 0.3% decline is expected to follow the previous month’s 0.2% dip, possibly reigniting fears of deflation in the country.

JPY
Yen pairs continued to climb up the charts in recent trading, as Japanese traders were on holiday yesterday. Asian equities ended higher when risk appetite improved but the Nikkei was unable to benefit from this since Japan’s stock market was closed then. Earlier today, Japan printed a couple of weak data points with a 15.7% decline in core machinery orders and a 0.4% dip in tertiary industry activity. No other reports are lined up from Japan today but the weak figures might spur a decline for the Nikkei and yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls held on to their recent wins in yesterday’s trading as risk sentiment improved. AUD/USD managed to stay above the .9000 major psychological level while NZD/USD stayed on track to its climb to .8400. However, the Westpac consumer sentiment report released earlier today printed a 3.0% decline. Chinese trade balance data, along with new loans and money supply, are still up for release and might have an impact on Aussie trading. There are no reports due from New Zealand and Canada.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 13, 2014)

USD

Data was light in the US session but that didn’t stop the Greenback from cashing in on the weakness of most of its major currency counterparts, except for the British pound. The Federal budget balance came in better than expected at a deficit of 10.3 billion USD instead of the estimated 16.4 billion USD shortfall. US retail sales data are up for release today, with the core figure projected to show a 0.1% uptick and the headline figure to print a flat reading. Weaker than expected results might be in the cards since hiring has been weak in the past couple of months.

EUR

The euro suffered heavy selling pressure in recent trading because of remarks from an ECB official saying that the central bank is considering implementing negative deposit rates. Draghi’s speech did not have much of an impact on price action since he simply reiterated his previous remarks. Euro zone industrial production came in below consensus and printed a 0.7% decline instead of the projected 0.2% dip. German final CPI and the ECB monthly bulletin are up for release today, but these aren’t expected to have a huge impact on the euro.

GBP

The pound enjoyed a strong rally against its currency rivals in recent trading, after BOE Governor Carney announced upgrades in its growth forecasts. He upgraded the GDP forecast for the year from 2.8% to 3.4%, pushing GBP/USD back above the 1.6600 mark. Although the RICS house price balance came in weaker than expected at 53% versus the estimated 56% reading, this wasn’t enough to erase the pound’s gains. No reports are due from the UK today.

CHF

The franc struggled to hold its ground to the dollar in recent trading, as Swiss CPI printed a 0.3% decline following the previous 0.2% dip. Deflation remains a concern in the Swiss economy, making it difficult for the franc to extend its rallies. Swiss PPI is up for release today and might be indicative of future inflation prospects. After printing a flat reading in the previous release, a 0.1% dip is expected.

JPY

The yen regained a bit of ground on the heels of risk aversion in the markets, after Janet Yellen recently confirmed that the Fed would push through with its taper and won’t bother with the potential crash in emerging markets. There have been no major releases from the Japanese economy so far and none are due today, which suggests that yen pairs could be swayed by risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar got sold off heavily in today’s Asian trading session because of weak Australian jobs data. The employment change figure showed a 3.7K decline following the previous month’s 23K drop. This was enough to push the jobless rate up from 5.8% to 6.0%, taking AUD/USD below the .9000 mark and AUD/JPY below 92.00. No other reports are lined up from the comdoll economies but the downturn in risk appetite might keep weighing on the rest of the comdoll pairs for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 17, 2014)

USD

The US dollar lost ground to its major currency counterparts on Friday, as data came in mixed. Capacity utilization and industrial production both fell short of expectations while import prices posted a mere 0.1% uptick. The preliminary UoM consumer sentiment index for February held steady at 81.2. There are no reports lined up from the US today since banks are closed for President’s Day. With that, stay on your toes for potentially higher volatility in today’s New York session.

EUR

The euro took full advantage of dollar weakness on Friday but was unable to keep up its rally against the Japanese yen. GDP reports from the euro zone came in strong, with the French economy showing 0.3% growth and the German economy printing a 0.4% GDP figure. This was enough to propel the euro zone economy into 0.3% growth for the quarter and provide a bit of support to the euro against most of its counterparts. There are no reports due from the euro zone today with only the Eurogroup meetings scheduled.

GBP

The pound kept up with its strong rally against the dollar and the yen on Friday, despite the lack of top-tier UK data on that day. Over the weekend, BOE Governor Carney had a testimony in which he commended the recovery in the UK housing market. There are no reports lined up from the UK today so the pound might be able to extend its rally if risk appetite stays in the markets.

CHF

The franc was able to pocket more gains last Friday, thanks to broad dollar weakness and the improvements in the euro zone economies. There were no reports released from Switzerland then and none are due today, which suggests that the franc might keep moving to the tune of risk sentiment.

JPY

The yen gained ground on the heels of weaker than expected Japanese GDP, as the economy posted 0.3% growth instead of the estimated 0.7% GDP figure. The revised industrial production report is up for release today but this might not be enough to keep the Nikkei and the yen pairs from sliding.

Commodity Currencies (AUD, NZD, CAD)

The comdolls also gained ground on dollar weakness last week, despite the weaker than expected manufacturing sales report from Canada. China had a better than expected CPI, which was enough to keep the Australian dollar supported, but New Zealand printed a weak quarterly retail sales report. However, the Kiwi still managed to start this week on a strong note, as NZD/USD stayed on track towards the .8400 handle. There are no other major reports lined up from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 18, 2014)

USD

The US dollar consolidated against most of its major counterparts in yesterday’s New York trading session, as most traders were on a holiday because of President’s Day. There were no reports released from the US economy then. Only medium-tier data such as the Empire State manufacturing index, TIC long-term purchases, and NAHB housing market index are up for release today. Weaker than expected reports could trigger a sharp selloff for the US dollar, as it would confirm that the extreme weather conditions are starting to take their toll on overall economic performance.

EUR

The euro took a break from its recent strong rallies, as there were no major reports released yesterday. News of Merkel voting against an additional set of funds for Greece as proposed by German Finance Minister Schaeuble also weighed on the euro. German ZEW economic sentiment data is up for release today and the index is projected to dip from 61.7 to 61.3, which might lead to a weaker euro.

GBP

The pound continued its strong rally in the start of yesterday’s trading but made a quick pullback during the US session. There were no major reports released from the UK economy then but today could be a different story as CPI figures are due. Recall that BOE Governor Carney recently upgraded the inflation forecasts yet analysts are expecting to see the annual CPI hold steady at the 2.0% mark. Stronger than expected results might be positive for the pound, as it would convince policymakers to tighten earlier than expected.

CHF

The franc paused from its recent climb against the dollar, as there were no reports released from the Swiss economy yesterday. There are still no reports due today so USD/CHF price action might hinge on market sentiment or US economic reports. Another round of weak data from the US could push USD/CHF even lower for the day.

JPY

Yen pairs ended the day on a weak note, as risk aversion spurred by weak Japanese GDP provided support for the lower-yielding yen. The BOJ is set to make its monetary policy statement today and it will be interesting to see what they have to say about the recent weakness in the economy and what they plan to do to offset the effect of the upcoming tax hike. Dovish remarks could push yen pairs back up the charts, as it could convince some traders that the BOJ is still ready to ease when needed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls bounced back to action in recent trading despite the lack of top-tier data. Earlier today, the RBA released the minutes of its latest monetary policy meeting and showed that the central bank isn’t looking to cut rates soon, leading to a strong AUD rally. However, the gains fizzled as the minutes also revealed the policymakers’ preference for a weak Australian dollar. Only the foreign securities purchases data is up for release from Canada today and this might not have such a huge impact on Loonie action.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 19, 2014)

USD

The US dollar had a mixed performance in the recent trading sessions, as it weakened against the euro and franc but gained ground against the pound, Kiwi, and Aussie. US data all came in weaker than expected, as the Empire State index showed a sharper than expected decline from 12.5 to 4.5 instead of just falling to 9.9. The TIC long-term purchases report showed a surprise negative reading as China reportedly trimmed its US Treasury debt holdings. Meanwhile, the NAHB housing market index slipped from 56 to 46 instead of holding steady as analysts predicted. US building permits and PPI are up for release today but the star of the show could be the FOMC meeting minutes, which could shed light on how many policymakers agree that the Fed should continue tapering.

EUR

The euro continued its rally against the dollar and the yen in yesterday’s trading sessions, despite weaker than expected data from the euro zone. The German ZEW economic sentiment figure fell from 61.7 to 55.7 instead of just dipping to the estimated 61.3 reading while the region’s ZEW reading fell from 73.3 to 68.5. There are no reports set for released from the euro zone today so much of the euro’s price action could depend on overall market sentiment.

GBP

The pound retreated to its counterparts yesterday when the UK CPI came in weaker than expected. The consensus was a 2.0% reading, same as in the previous month, but the actual figure ticked down to 1.9%. This throws shade on Carney’s recent inflation upgrade, forcing some to rethink the BOE’s hawkish stance. BOE meeting minutes are up for release today and another round of upbeat remarks might push the pound back up.

CHF

The franc carried on with its rally against the dollar although the gains were made at a slower pace. There were no reports released from Switzerland yesterday while today has the ZEW economic expectations report on tap. An improvement from the previous 36.4 reading might be enough to push USD/CHF lower while a decline could trigger a bounce.

JPY

The yen slipped against its counterparts in yesterday’s Asian trading session when the BOJ expressed its bias to ease further. However, the gains were quickly erased as yen pairs tested significant resistance levels. No major reports are lined up for today but BOJ Governor Kuroda is set to testify in front of Parliament, which suggests that more easing remarks could be in the cards.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi lost ground to the dollar in recent trading while the Loonie fought to hold on to its recent gains despite weaker than expected Canadian foreign securities purchases. The report showed a 4.28 billion CAD deficit instead of the expected 9.97 billion CAD surplus. Earlier today, Australia reported a 0.8% uptick in its CB leading index and a 0.2% decline for its MI version. Wage price index showed a quarterly 0.7% increase, stronger than the previous 0.5% rise. Canadian wholesale sales data is due today and a 0.5% drop is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (February 20, 2014)

USD

The US dollar made a quick rebound against most of its major currency rivals in recent trading, as the FOMC minutes showed the Fed’s commitment to carry on with their taper plans. Data from the US has actually been mostly weak, with building permits showing a 0.94 million figure instead of the estimated 0.98 million reading. Headline and core PPI both came in line with consensus, showing 0.2% upticks, while housing starts also disappointed. Up ahead, the US CPI figures are due along with the initial jobless claims and Philly Fed index. Another round of disappointing data could force the Greenback to return some of its recent gains.

EUR

The euro struggled to keep up its rallies in yesterday’s trading sessions when the euro zone didn’t release any economic reports. For today, German and French manufacturing and services PMIs are up for release and this might be crucial in determining whether the euro can hold on to its recent gains or start a selloff. Most of the PMIs are expected to show improvements, enough to boost the region’s manufacturing and services PMIs.

GBP

The pound let go of its recent wins when the jobs data came in mixed. The economy added 27.6K jobs in January but the jobless rate ticked up from 7.1% to 7.2%, a couple of notches away from the BOE’s jobless rate target. The BOE meeting minutes showed a unanimous vote to keep monetary policy unchanged and triggered a quick bounce for pound pairs when Carney’s hawkish comments were echoed by most policymakers. Only the CBI industrial order expectations are due from the UK economy today and this might not have much of an impact on the pound.

CHF

The franc paused from its recent rallies as Switzerland’s ZEW economic expectations report showed a decline from 36.4 to 28.7. Only the trade balance is up for release today and a wider trade surplus is projected, which might be enough to support the franc against the euro and the dollar. Otherwise, a sharper selloff might be in the cards as this would force the SNB to jawbone the franc later on.

JPY

The yen had a mixed performance in recent trading as there were no major reports released from Japan, leaving the currency vulnerable to market sentiment. There are still no major reports lined up for today, which suggests that the yen’s movement could still depend on the market’s risk preferences.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered a fresh wave of losses in recent trading as most data came in weak. Canada’s foreign securities purchases showed a surprise deficit while New Zealand’s quarterly PPI figures posted declines instead of the estimated upticks. Earlier today, China released a weak HSBC flash PMI reading and showed a deeper contraction in the industry, pushing AUD pairs lower. No other reports are due from the comdolls today so much could depend on risk sentiment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 11, 2014)

USD

The US dollar had a mixed performance to its major currency counterparts recently as data was light in the US session. In fact, there were no major economic releases from the US. For today, JOLTS job openings data and the NFIB small business index are the only reports on the US calendar and these aren’t likely to cause huge waves among dollar pairs. Analysts speculate that the US dollar could stay supported in the near term though, as the recently released NFP figure pointed to a recovery in the jobs market.

EUR

The euro retreated to the dollar in recent trading, as data from the euro zone came in mostly weaker than expected. French industrial production showed a 0.2% decline instead of the estimated 0.6% uptick while the previous figure was downgraded. Italian industrial production was stronger than expected with a 1.0% increase versus the estimated 0.4% growth while the previous figure was upgraded. However, euro zone Sentix investor confidence fell short of expectations when it climbed from 13.3 to 13.9, weaker than the estimated 14.3 figure. German trade balance is the only report due from the euro zone today.

GBP

The pound gave up ground to the dollar in recent trading sessions, as the UK BRC retail sales monitor chalked up a 1.0% decline. This pushed GBP/USD down to the 1.6650 minor psychological level in Asian trading, although the pair is nearing a support zone. UK inflation report hearings and manufacturing production are lined up for today and this should determine whether pound pairs will retreat further or bounce higher. Manufacturing production is likely to show another 0.3% uptick but a stronger than expected reading might give pound pairs a strong boost.

CHF

The franc paused from its recent rallies to the dollar when Swiss retail sales printed weaker than expected results. It showed a mere 0.3% increase when analysts were expecting to see 2.7% growth, although the previous figure was upgraded to 2.5%. There are no reports due from Switzerland today so the franc might have a chance at resuming its drop if traders don’t favor the US dollar in today’st rading sessions.

JPY

Yen pairs stayed stuck in consolidation in the past few hours as traders await the BOJ interest rate decision. No actual policy changes are anticipated, as central bankers are still waiting to assess the impact of the upcoming sales tax increase on overall economic performance. Japanese exports have been lagging though and this issue might come up in today’s BOJ press conference.

Commodity Currencies (AUD, NZD, CAD)

The comdolls did enjoy a bit of support in recent trading, even though risk appetite seems to have weakened. The New Zealand dollar got a boost from PM John Key when he spoke of the need to bring interest rates back to normal levels. This set the stage for this week’s RBNZ interest rate decision, confirming that the central bank is likely to hike. As for Canada, housing starts were stronger than expected at 192K, enough to give the Loonie a chance to rally yesterday. In Australia, NAB business confidence showed a small decline.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 12, 2014)

USD

The US dollar had another mixed performance in recent trading, as major pairs were mostly driven by country-specific events and couldn’t establish a clear direction because of the lack of US reports and major catalysts. Risk sentiment is shifty, with the tension in Ukraine still present and with investigators unable to identify what caused the Malaysian Airline plane’s disappearance. Data on US crude oil inventories is due today along with the US 10-year bond auction, both of which aren’t expected to cause a huge impact on dollar behavior.

EUR

The euro gave up some of its recent gains to the dollar in yesterday’s trading sessions, as data from Germany came in weak. The trade balance fell short of expectations, with the surplus at 17.2 billion EUR instead of the estimated 19.3 billion EUR. This is also lower compared to the previous month’s 18.3 billion EUR surplus. French final non-farm payrolls and euro zone industrial production data are up for release today but these aren’t likely to spur the euro in a particular direction, unless actual results come in way above or below expectations.

GBP

The pound lost a lot of ground in recent trading because of downbeat comments from BOE officials. Carney emphasized that the UK central bank isn’t looking to hike rates anytime soon since there is a lot of spare capacity in the economy and both inflation and employment have room to improve. This was followed by remarks from MPC member Bean who said that further appreciation for the pound could hurt the country’s exports and overall economic performance. No reports are due from the UK today so this change in rate hike expectations might keep hurting the pound.

CHF

The franc consolidated to the dollar in yesterday’s trading sessions, as both Switzerland and the US had no reports released. These two economies have virtually no major reports lined up for today so more sideways movement for USD/CHF might be in the cards.

JPY

The yen posted gains against most of its major counterparts, including the US dollar, when the BOJ refrained from easing monetary policy. The central bank also made no changes to its growth and inflation forecasts, despite the potential weakness from the upcoming sales tax increase. The BOJ also highlighted the recent weakness in exports but explained that this might just be due to temporary factors. No major reports are due from Japan in the next few hours.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to their lower-yielding counterparts yesterday when risk appetite waned. Data from Australia reflected weakness, with the NAB business confidence figure falling from 9 to 7 and the Westpac consumer sentiment report showing a 0.7% decline. Earlier today, the Australian home loans report showed a flat reading and a downward revision in the previous month’s figure. The RBNZ is set to make its interest rate decision in the next Asian trading session and rate hike expectations could keep NZD/USD afloat. However, a disappointment in the monetary policy statement could lead to a massive selloff.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 21, 2014)

USD

The US dollar extended its gains to most of its major counterparts when data from the US economy came in stronger than expected. The initial jobless claims report showed a 320K reading instead of the projected 327K figure while the Philly Fed index jumped from -6.3 to 9.0. On the other hand, existing home sales fell short of expectations and declined from 4.62M to 4.60M. There are no major reports lined up from the US today but there are a bunch of testimonies by FOMC officials. This could set the tone for dollar trading as it would confirm whether or not other policymakers agree with Yellen’s statements on future monetary policy plans.

EUR

The euro lost further ground in yesterday’s trading sessions, with EUR/USD breaking below the 1.3800 mark to the dollar. Only the German PPI was released from the euro zone and this printed a flat reading instead of the estimated 0.2% uptick. Euro zone current account and consumer confidence are up for release today and this might determine whether the euro will lose further ground or recover before the end of the week.

GBP

The pound was unable to hold on against the dollar in recent trading, as risk aversion took over the markets. The CBI industrial order expectations actually came in stronger than expected as it improved from 3 to 6 yet GBP/USD sold off because of strong US data. UK public sector net borrowing data is up for release today and it might show a 7.8 billion GBP reading.

CHF

The franc still continued to give way to the dollar in yesterday’s sessions when the SNB reiterated its pledge to defend the franc peg. There are no reports lined up from Switzerland today so EUR/CHF and USD/CHF movement might depend on euro zone and US events.

JPY

The yen made a bit of recovery to its counterparts as risk rallies were kept at bay. The worsening conflict in Ukraine and the economic sanctions being imposed turned out to be favorable for the safe-haven yen. There were no major reports released from Japan yesterday and none are due today, as Japanese banks are on holiday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to dollar strength recently, as the run in risk aversion dampened demand for these higher-yielding currencies. The looming risk of corporate default in China weighed on the Australian dollar, although the country reported a 0.2% uptick in its CB leading index earlier today. New Zealand reported a 2.2% increase in visitor arrivals for February, helping NZD/USD stay above the short-term rising trend line. The event risk for the Loonie today is the Canadian retail sales release, which might show a 0.8% increase for the headline figure and a 0.9% gain for the core figure. Canadian CPI is also up for release today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 24, 2014)

USD

The US dollar let go of some of its recent gains on Friday as most traders booked profits off key levels. Data from the US was relatively light for the day, with a few FOMC officials supporting the positive outlook for the economy. Only the flash manufacturing PMI is up for release from the US today and this isn’t expected to make a huge impact on dollar movement. Do keep close tabs on the economic sanctions being imposed by the US on Russia as these could impact overall risk sentiment.

EUR

The euro recovered a bit against the dollar on Friday, thanks to a better than expected current account balance from the euro zone. The surplus widened from 20.0 billion EUR to 25.3 billion EUR. Germany and France are set to print their manufacturing and services PMIs today and these could determine whether the euro selloff would resume or not. Most of the figures are expected to show small improvements, although the readings could still reflect contraction in the industries.

GBP

The pound was unable to bounce back on Friday, as the public sector net borrowing report showed that the government incurred a 7.5 billion GBP deficit. There are no major reports lined up from the UK today so pound pairs might be in for a bit of consolidation, as traders wait for the UK CPI to be released later on this week.

CHF

The franc rebounded on Friday, taking advantage of profit taking by most market participants. There were no reports released from Switzerland then and none are due today, which might mean a bit of sideways movement for both USD/CHF. As for EUR/CHF, the price action might hinge on the euro zone PMI releases.

JPY

The yen bounced back to action on Friday, as risk sentiment favored the lower-yielding Asian currency. However, Japanese traders were on holiday then and there were very little cues from Asian equities. Japan’s banks resume operation today and it will be interesting to see how the recent sanctions imposed by the US on Russia will be priced in the Nikkei and yen pairs. No economic reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a bit of bounce on Friday, most notably the Loonie. The Canadian currency drew a lot of support from stronger than expected economic data, as retail sales and CPI all came in higher than estimates. Core CPI showed a 0.7% increase while the headline figure printed a 0.8% uptick. Core retail sales had a 1.0% rise while headline retail sales made a 1.3% jump. There are no reports due from Canada today but in the Asian session, China’s HSBC flash manufacturing PMI printed a weaker than expected 48.1 reading which weighed on the Aussie.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 25, 2014)

USD

The US dollar gave up some ground to its major counterparts in recent trading, pushing EUR/USD back above the 1.3800 mark. Data from the US was weaker than expected, as the flash manufacturing PMI slipped from 57.1 to 55.5 instead of just falling to 56.6. US CB consumer confidence and new home sales data are up for release today, with consumer confidence expected to improve from 78.1 to 78.7 and new home sales likely to fall to 447K from 468K. Also scheduled for today are some testimonies by Fed officials who will probably give their assessment on the US economy and indicate whether they support Yellen’s stance or not.

EUR

The euro bounced against the dollar in recent trading, despite mixed PMI figures from the euro zone. France reported strong results for its manufacturing and services sectors but Germany’s figures fell short, although the region’s figures came in close to consensus. German Ifo business climate is up for release today and it might show a dip from 111.3 to 110.9. Worse than expected data could push EUR/USD back below the 1.3800 mark while strong results could lead the uptrend to resume.

GBP

The pound was unable to take advantage of dollar weakness in recent trading, leaving GBP/USD to consolidate around the 1.6500 handle. There have been no reports released from the UK on Monday but traders are sitting tight ahead of today’s CPI release, which is forecasted to weaken to 1.7%. If so, that would lower the odds of tightening by the BOE, as the central bank would be keen to keep inflation close to their 2% target.

CHF

The franc took advantage of the dollar’s selloff in recent trading, despite the lack of data from Switzerland. There are still no reports lined up from Switzerland today so franc movement could hinge mostly on market sentiment.

JPY

The yen consolidated against most of its currency counterparts, as there were no major reports released from Japan. The Nikkei managed to clock in a solid 1.8% gain at the start of the week, as Japanese traders returned to their trading desks. There were no reports released from Japan then and none are due today, leaving the yen pairs at the mercy of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to gain from the dollar’s slide yesterday, with NZD/USD holding above the rising trend line on the 1-hour time frame and AUD/USD breaking above .9100. Chinese data was weaker than expected, as the HSBC flash manufacturing PMI sank further, but this caused speculation that the PBOC or Chinese government might start adding stimulus. There are no other reports lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 26, 2014)

USD

The US dollar had a mixed performance to its counterparts, as it failed to draw strong support from economic data. The CB consumer confidence report churned out stronger than expected results, with the index climbing from 78.3 to 82.3 and surpassing the consensus at 78.7. However, new home sales turned out to be a disappointment at 440K while the previous figure was revised lower. The Richmond manufacturing index also showed a weak reading of -7 instead of the projected -1 figure. Durable goods orders data is up for release today, with the headline figure expected to print a 1.1% increase and the core report to show a 0.3% uptick.

EUR

The euro had a volatile day as it was tossed around by comments on negative deposit rates. Germany’s Bundesbank head Weidmann, who is also an ECB member, hinted that this policy option could be implemented since the ECB is running out of tools to combat the euro’s appreciation. Apparently, gains in the shared currency are starting to hurt Germany’s economic performance. Other ECB officials suggested that further QE could be implemented to boost inflation. Germany’s Ifo business climate figure came in line with expectations and today it will be the turn of the GfK consumer climate figure to show how the consumer sector is faring.

GBP

The pound found a bit of support as the UK CPI came in line with expectations at 1.7% while other inflation indicators showed stronger than expected results. BBA mortgage approvals came in weaker than expected though at 47.6K while the previous month’s reading was downgraded. No reports are due from the UK today so the pound’s rallies could carry on if risk appetite stays strong.

CHF

The franc had a choppy trading day despite the lack of major reports from Switzerland. The SNB quarterly bulletin and UBS consumption indicator are up for release today and this might push franc pairs in a clearer direction.

JPY

The yen lost ground to the pound, Aussie, and Loonie but managed to consolidate against the euro in yesterday’s trading. There were no reports released from Japan, as the yen’s movement hinged on currency-specific events. There are still no reports lined up from Japan today so the lower-yielding currency’s action could be sensitive to risk once more.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to edge higher against the dollar in recent trading, although their rallies were slower this time around. AUD/USD climbed safely above the .9150 handle while USD/CAD retreated to 1.1150. New Zealand is set to print its trade balance later on and possibly show a larger surplus of 595 million NZD compared to the previous 306 million NZD, which might give the Kiwi a boost. No reports are due from Australia and Canada today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 27, 2014)

USD

The US dollar was unable to benefit from stronger than expected US economic data, as the lower-yielding currency still lost ground despite the 2.2% jump in headline durable goods orders. The core version of the report printed a 0.2% uptick, close to the estimated 0.3% increase, but the previous month’s readings were revised lower. The flash services PMI printed stronger than expected results, with an upward revision in the previous reading. What weighed on the Greenback was the Fed bank stress test results, which showed that Citigroup and four other U.S. banks failed. Another factor that weighed on the dollar was the bond auction that showed a rapidly flattening yield curve. US initial jobless claims and pending home sales are up for release today, both of which are not expected to have a strong impact on the dollar unless they come in significantly above or below expectations.

EUR

The euro didn’t get to take advantage of dollar weakness in recent trading, as the region showed signs of economic weakness as well. Talks of negative deposit rates are starting to weigh on the shared currency again, as policymakers try to figure out what other tools they can use to battle deflation and prevent the euro from climbing higher. German GfK consumer climate came in line with expectations at 8.5. Euro zone money supply and private loans data are due today but these aren’t expected to make a huge effect on euro action.

GBP

The pound made a strong bounce in recent trading, despite the lack of data from the UK. Traders are pricing in strong UK retail sales in light of the rebound in hiring. After showing a 1.5% decline in the previous month, a 0.5% increase is expected for February.

CHF

The franc tried to take advantage of dollar weakness but its gains were limited, thanks to the SNB’s recent pledge to keep the franc weak. The UBS consumption indicator climbed to 1.57 from an upwardly revised 1.49 reading, lending a bit more support for the franc. There are no reports due from Switzerland today.

JPY

The yen gained ground to most of its major counterparts, as traders flocked to the safe-haven currency against the US dollar. The Nikkei has been on a decline, which also means that risk sentiment is in support of the yen. Traders are starting to price in the impact of the corporate tax hike due next month. Japanese household spending and inflation data are up for release in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls cashed in gains in the midst of dollar weakness, with AUD/USD climbing to the .9200 major psychological level and NZD/USD breaking above consolidation. Perhaps the most surprising move among the comdolls was USD/CAD’s dip below the 1.1100 major psychological level despite recent BOC remarks on a possible rate cut. New Zealand printed a stronger than expected trade surplus of 818 million NZD although the previous month’s surplus was revised lower.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 28, 2014)

USD

The US dollar continued to bleed to the pound and the commodity currencies, as data from the US failed to give the currency any support. Data came in mixed, with pending home sales printing a weaker than expected figure. The report showed a 0.8% decline instead of the estimated 0.1% uptick while the previous month’s figure was revised to show a 0.2% decline. Initial jobless claims came in strong at 311K versus the estimated 326K figure, but the GDP reading was revised down from 2.6% to 2.4%. US consumer data, namely the revised UoM consumer sentiment figure and personal spending figures, are on tap for today.

EUR

The euro suffered another round of losses to its major counterparts, particularly the dollar and the pound, as data from the euro zone came in weak. Private loans tumbled by 2.2% versus the estimated 2.1% dip while the previous figure was revised lower. Data on German import prices and French consumer spending are up for release today and more signs of weakness could lead to more declines for the euro.

GBP

The pound made a strong bounce to the dollar and the euro yesterday when UK retail sales printed stronger than expected results. The report marked a 1.7% jump versus the estimated 0.5% uptick, although the previous figure was revised down from -1.5% to -2.0%. For today, UK current account and final GDP are on tap. Strong figures could allow the pound to extend its rally.

CHF

The franc kept consolidating to the dollar, thanks to the lack of major reports from Switzerland. The Swiss currency failed to take advantage of dollar weakness as recent comments from SNB officials showed that the central bank is still keen on pursuing franc weakness. There are no reports due from Switzerland today.

JPY

The yen had a topsy-turvy day as it gained on risk aversion then lost ground when Japanese data came in strong. Tokyo core CPI and national core CPI both printed healthy gains while household spending marked a 2.5% decline. Traders are uneasy about buying the yen ahead of the April sales tax increase while the improvement in risk appetite is keeping yen pairs strong.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to gain ground against its lower-yielding counterparts, with the Kiwi boosted by more rate hike expectations and the Aussie lifted by risk sentiment. Even the Loonie was able to take advantage of the gains, as USD/CAD dipped below the 1.1000 mark. There are no reports due from the comdoll economies today so be mindful of potential profit taking ahead of the weekend and end of the month.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (March 31, 2014)

USD

The US dollar took a breather from its latest declines, as traders booked profits off key levels last week. Data from the US economy came in mostly in line with expectations, as personal spending and income rose by 0.3% while the University of Michigan consumer sentiment figure was revised to 80.0. Yellen is set to give a speech in today’s New York trading session and spark additional volatility for dollar pairs. If she emphasizes her rate hike timeline of six months after the end of asset purchases, the dollar could draw more support.

EUR

The euro showed signs of weakness on Friday but was able to make a quick bounce to the dollar and the yen before the trading week closed. Reports from the euro zone were actually weaker than expected, with German CPI coming in at 0.3% instead of the estimated 0.4% figure and French consumer spending posting a mere 0.1% uptick instead of the projected 1.0% gain. German retail sales and euro zone CPI flash estimate are on tap for today and another round of weak reports could lead to more losses for the euro.

GBP

The pound retreated slightly on Friday, as data from the UK came in below consensus. The current account balance showed a larger than expected deficit of 22.4 billion GBP while the previous reading was downgraded to show a 22.8 billion GBP shortfall. Meanwhile the final GDP reading saw no revisions from its previous 0.7% figure. UK net lending to individuals data is due today, along with a speech from BOE Governor Carney.

CHF

The franc consolidated to the dollar on Friday, thanks to the lack of data from Switzerland. USD/CHF formed a doji on its daily time frame, indicating a possible reversal. Swiss KOF economic barometer is due this Monday and it might show a small improvement from 2.03 to 2.08, which could allow the franc to gain more ground against the dollar.

JPY

Traders dumped the Japanese yen early on as data from Japan over the weekend showed bleak results. Manufacturing PMI declined while the industrial production report showed a surprise 2.3% decline. On top of that, Japan will be implementing its sales tax hike this week and traders are anticipating further BOJ stimulus to offset the potential economic drag. Japanese housing starts data is also due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave back some of their recent gains on Friday as profit-taking took place in the forex market. New Zealand reported a 1.7% decline in building consents and a decline in ANZ business confidence while Australia showed a 4.6% increase in HIA new home sales. Canada is set to print its monthly GDP reading today and possibly show a 0.4% growth reading for January.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (April 1, 2014)

USD

It was a mixed bag for the US dollar in Monday’s trading, as it gave up gains to some of its counterparts but locked in wins against others. USD/JPY carried on with its rally past the 103.00 handle while GBP/USD broke past the 1.6650 minor psychological resistance. Fed Chairperson Yellen’s speech caused volatility among dollar pairs as she spoke of the labor market needing support, which is a more dovish statement compared to her remarks during the latest FOMC decision. Up ahead, ISM manufacturing PMI is due and analysts expect to see an improvement from 53.2 to 54.2.

EUR

The euro made a small recovery to the dollar in recent trading even though the CPI reading for the euro zone came in weaker than expected at 0.5%. This prompted calls for further easing from the ECB in their upcoming rate decision, but ECB member Nowotny mentioned that the euro zone recession might be over and sparked a rally for the shared currency. Spanish and Italian manufacturing PMI, along with the German unemployment change data, is due today and should provide a bit more movement for euro pairs.

GBP

The pound extended its rally against the dollar in yesterday’s trading sessions when BOE Governor Carney spoke of higher rates for the UK economy. UK manufacturing PMI is up for release today and this might determine whether the pound can hold on to its recent gains or not. The figure is slated to dip from 56.9 to 56.7 for March, which might lead to a bit of a pullback for GBP/USD if the actual figure comes in as expected. A weaker than expected reading could trigger a quick selloff.

CHF

The franc regained ground to the dollar, with USD/CHF closing below the doji on its daily time frame and confirming a potential selloff. Data from Switzerland was actually weaker than expected as the KOF economic barometer showed a decline from 2.03 to 1.99 instead of improving to 2.08. Swiss SVME PMI is up for release today and a small improvement from 57.6 to 57.9 is projected, which might help USD/CHF extend its drop.

JPY

The yen lost ground to most of its major counterparts recently when Japan printed a weaker than expected Tankan index. The figure rose from 16 to 17, short of the estimate at 19, while the non-manufacturing component improved from 20 to 24 as expected. Average cash earnings stayed flat instead of dipping by the estimated 0.1%, allowing the yen to hold steady in the early Asian session. No other reports are due from Japan for the rest of the trading day.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and the Kiwi resumed their rallies to the dollar while the Loonie lagged behind, although Canadian GDP came in stronger than expected at a monthly growth of 0.5%. Earlier today, Chinese official manufacturing PMI improved from 50.2 to 50.3 instead of falling to the projected 50.1 reading. However, the HSBC final manufacturing PMI was revised lower to 48.0. The RBA is set to announce its interest rate decision today and possibly spark more volatility for AUD/USD. No reports are due from Canada and New Zealand.

By Kate Curtis from Trader's Way