Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (June 3, 2014)

USD

The US dollar had a very strong start to the trading week, as it raked in gains against the euro, Loonie, and yen. The US ISM manufacturing PMI showed a decent improvement from 54.9 to 55.4, slightly lower than the consensus at 55.7 but still a positive reading. There are no top-tier reports due from the US today, as only medium-tier ones like the factory orders data and total vehicle sales report are up for release. With that, the Greenback might move to the tune of risk sentiment for the rest of the trading day.

EUR

The euro sank lower against its forex counterparts when the German preliminary CPI reading fell short of expectations and hinted of weaker than expected euro zone CPI forecasts. The reading showed a 0.1% downtick versus the estimated 0.1% gain, following the previous 0.2% decline. Other euro zone reports, such as the Italian manufacturing PMI, also disappointed while the Spanish and region-wide PMI simply came in line with expectations. Euro zone CPI forecasts are due today and a downgrade from 0.7% could seal the deal for further ECB easing later on this week.

GBP

The pound put up a strong fight to the dollar in recent trading when the UK manufacturing PMI was able to come in line with expectations. The figure slipped from 57.3 to 57.0, indicating that the expansion in the industry slowed down. For today, construction PMI is due and might show a climb from 60.8 to 61.2. In this case, the pound might be able to go for more gains.

CHF

The franc gave up its recent gains to the dollar when the SVME PMI turned out to be a disappointment. The figure was expected to dip from 55.8 to 55.7 but it fell to 52.5 instead, reflecting a sudden drop in industry activity. There are no major reports lined up from Switzerland today but traders might keep selling the franc on the heels of the slowdown in manufacturing.

JPY

The yen lost a lot of ground to its forex counterparts in recent trading as risk appetite picked up. The Nikkei recorded a 2.07% gain for the day, reflecting optimism that capital spending might make up for the slack in retail sales and household spending. There are no reports due from Japan today so the yen might continue to give way to risk appetite.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was a big loser in the recent trading sessions as building approvals showed a weaker than expected reading and led traders to believe that the RBA might sound dovish in today’s rate statement. Earlier today, retail sales came in worse than expected at only 0.2% versus the estimated 0.3% gain. Chinese non-manufacturing PMI showed an improvement though, helping limit the Aussie’s losses. As for the Loonie and Kiwi, there are no major reports due from Canada and New Zealand, leaving these currencies at the mercy of market sentiment.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 4, 2014)

USD

The US dollar took a quick break from its strong rallies as risk appetite picked up in recent forex trading sessions. Data from the US economy was relatively better, as factory orders showed a 0.7% increase and saw an upward revision in the previous month’s reading. Total vehicle sales came in at 16.8 million versus the estimated 16.0 million reading. For today, US trade balance and ISM non-manufacturing PMI are up for release. The trade deficit could widen from 40.4 billion USD to 40.8 billion USD while the PMI is slated to climb from 55.2 to 55.6.

EUR

Despite the downgrade in inflation forecasts, the euro managed to put up a good fight to the dollar and score wins to the yen as the employment reading came in better than expected. CPI forecasts were dropped from 0.7% to 0.5% while the unemployment rate improved from 11.8% to 11.7%. Spanish and Italian services PMI are up for release today and these might not have such a huge impact on euro movement as traders are awaiting the ECB rate statement tomorrow.

GBP

The pound showed weakness when the construction PMI fell short of expectations and dropped from 60.8 to 60.0 instead of improving to 61.2. For today, the services PMI is up for release and this would have a bigger impact on pound movement since the sector comprises a huge chunk of overall economic activity. A dip from 58.7 to 58.3 is expected and this might lead to pound weakness all over again.

CHF

The franc was a little more steady in recent trading, despite the lack of top-tier data from Switzerland yesterday. There are still no reports due from the country today so it might be more sideways movement from franc pairs, unless there are any major changes in risk sentiment.

JPY

The yen fell victim to the strong improvement in market sentiment recently as it lost ground to its major counterparts. The Nikkei managed to chalk up a pretty decent gain for the day, along with other Asian equities. There have been no reports released from Japan then and none are due today, which suggests that yen pairs might keep moving to the tune of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance in recent trading as the Kiwi continued its descent while the Aussie had a chance to bounce on a relatively upbeat RBA rate statement. The central bank made no changes to monetary policy but gave a more positive outlook for Australia, even though the latest retail sales release came in weak. The Loonie should take center stage today with the BOC interest rate decision, although no actual changes are expected again.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 5, 2014)

USD

The US dollar advanced against its major forex counterparts again when risk aversion popped back in the financial markets. Data from the US economy was mostly stronger than expected, with the ISM non-manufacturing PMI climbing from 55.2 to 56.3. Revised non-farm productivity and unit labor costs also showed better than expected results. However, the ADP non-farm employment change missed expectations, leading some to expect a weak NFP reading for Friday. For today, only the initial jobless claims report is due and it might show a higher figure of 309K versus the previous 300K.

EUR

The euro sank again in recent trading when traders started pricing in expectations of further easing from the ECB in today’s interest rate decision. Euro zone data was mostly in line with expectations, with only the Spanish services PMI printing weaker than expected results. For today, German factory orders are also up for release and it might show a 1.3% rebound. However, this could be overshadowed by the ECB event during which Draghi might announce negative deposit rates or further LTRO.

GBP

The pound struggled to hold steady in recent trading when services PMI came in better than expected at 58.6 versus the estimated 58.3 reading. However, this is a small decline compared to the previous 58.7 figure. For today, the BOE interest rate decision might spark a lot of volatility for pound pairs, although Carney and his men are likely to keep monetary policy unchanged for the time being.

CHF

The franc bounced back and forth in recent trading, as the lack of top-tier data from Switzerland kept the currency in range. There are still no reports due from Switzerland today but bear in mind that the franc tends to react the same way as the euro when there are top-tier events in the euro zone. With that, the ECB rate statement might also lead to franc weakness if the central bank decides to ease.

JPY

The yen put up a good fight to its major forex counterparts, despite the lack of data from Japan yesterday. There are no major reports lined up from the country today, which suggests that yen pairs might be sensitive to risk sentiment and country-specific events.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar edged higher in recent trading when the GDP release showed a stronger than expected 1.1% growth versus the estimated 0.9% uptick. The New Zealand dollar also recovered off its recent lows but maintained its downtrend. As for the Canadian dollar, it lost ground on the heels of a dovish BOC statement, as Governor Carney spoke of weak inflationary pressures. Australian trade balance and Ivey PMI are the main event risks for the Aussie and Loonie today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 9, 2014)

USD

The US non-farm payrolls figure came in close to expectations as it posted a 217,000 gain in hiring versus the estimated 214,000 increase. The previous month’s reading was revised slightly lower from 288,000 to 282,000 yet the jobless rate managed to hold steady at 6.3% as the participation rate improved. Average hourly earnings showed a mild 0.2% uptick, better than the previous report’s flat reading. For today, there are no major reports due from the US which means that risk sentiment might be the main driver of price action.

EUR

The euro made a small retreat on Friday when German industrial production came in weaker than expected, posting a 0.2% uptick instead of the projected 0.4% rebound. Trade balance was better than expected though while French trade balance also posted stronger than estimated results. German and French banks are on holiday today with only the euro zone Sentix investor confidence report due.

GBP

The pound consolidated at the end of the week as UK trade balance came in weaker than expected while consumer inflation expectations showed a decline from 2.8% to 2.6%. Only the BRC retail sales monitor is up for release today and it is expected to show an improvement from the previous 4.2% reading, which might then lead to gains for the pound.

CHF

The franc calmed down from its recent volatile movement as Switzerland printed better than expected CPI of 0.3%. The foreign currency reserves data came in line with expectations at 444.4 billion CHF, suggesting that the SNB may still have room to defend the franc peg if needed. There are no reports due from Switzerland today as Swiss banks are on holiday.

JPY

The yen posted gains on Friday when risk appetite picked up during the Asian trading sessions. Japan’s leading indicators was better than expected at 106.6% versus the projected 106.2% reading. Over the weekend, Japan reported mixed data, with a weaker than expected current account, a stronger than expected final GDP reading of 1.6%, and a 2.3% increase in bank lending as expected. Data on consumer confidence is up for release today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a pretty good rebound on Friday, except for the Loonie which suffered due to bleak Canadian jobs data. The headline figures were mostly in line with expectations yet underlying reports showed that most of the gains were just a result of part-time hiring. Canadian housing starts are due today while Australia and New Zealand have no reports on tap. Do stay tuned for RBA Governor Stevens’ speech later on though.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 10, 2014)

USD

The US dollar regained strength against the euro and Swiss franc in yesterday’s trading sessions but it lost ground to the yen and Aussie then consolidated to the pound. There have been no major reports released from the US economy yesterday while today has the JOLTS job openings and wholesale inventories data on tap. Both of these reports aren’t expected to have a huge impact on the US dollar, which might be driven mostly by risk sentiment throughout the day.

EUR

The euro suffered another sharp selloff at the start of the week, as traders digested the longer-term impact of the recent ECB easing announcement on the shared currency. Only the Sentix investor confidence index was released from the euro zone yesterday and this showed a weaker than expected reading of 8.5 versus the estimated 13.5 figure. For today, French and Italian manufacturing production numbers are due. Weaker than expected readings could lead to more euro weakness.

GBP

The pound was able to hold on to most of its recent gains as there were no reports released from the UK economy yesterday. Manufacturing production data is due today and a 0.4% uptick is expected to follow the previous 0.5% increase. A stronger than expected result might lead to more pound gains while a bleak reading could force it to return its recent wins.

CHF

The franc gave up most of its gains in recent trading as investor confidence fell sharply in the euro zone. Today, Switzerland will report its retail sales figure and possibly show a 2.2% annual reading, lower than the previous 3.0% figure. An even weaker than expected reading could lead to more franc weakness.

JPY

The yen had a mixed performance as it raked in huge gains to the euro but lost ground to the Aussie and consolidated against the Loonie. Data from Japan came in mixed over the weekend and yesterday’s consumer confidence release showed a stronger than expected result. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made decent recoveries in recent trading, with the Aussie, Kiwi, and Loonie advancing to the yen and dollar. This was spurred by positive risk sentiment and strong data from China, plus a better than expected housing starts figure from Canada. Earlier today, Australian data came in mixed as NAB business confidence held steady while home loans stayed flat. ANZ job advertisements slipped by 5.6% while the previous figure was downgraded. However, Chinese CPI came in stronger than expected and may be hinting of a pick up in the world’s second largest economy. There are no reports due from New Zealand and Canada today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 11, 2014)

USD

The US dollar dominated in recent forex trading sessions, particularly against the euro and the pound. Against the yen though, the Greenback gave up most of its recent gains. Medium-tier data from the US economy was mixed, as the JOLTS job openings data came in higher than expectations while the wholesale inventories figure was weaker than expected. Data on crude oil inventories and the Federal budget balance are up for release today, both of which aren’t expected to make a huge impact on dollar movement.

EUR

The euro resumed its selloff to the dollar and the yen in yesterday’s trading sessions, despite euro zone data printing in line with expectations. French industrial production showed a 0.3% gain while Italian industrial production marked a 0.7% increase. There are no reports due from the euro zone today, which suggests that the shared currency could be driven mostly by market sentiment.

GBP

The pound showed signs of weakness in recent trading when the U.K. manufacturing production report simply came in line with expectations of a 0.4% uptick. UK jobs data is due today, with the claimant count change likely to show a 25.0K drop in unemployment and the jobless rate expected to dip from 6.8% to 6.7%. Stronger than expected data could lead to a rebound for the pound while weak figures could push the selloff deeper.

CHF

The franc gave in further to dollar strength when Swiss retail sales came in much lower than expected. The annual reading showed a mere 0.4% uptick, much lower than the estimated 2.2% figure and the previous 3.4% gain. This goes to show that Swiss consumer spending considerably weakened in recent months. There are no reports due from Switzerland today so the franc might continue to reel from the latest bleak figures.

JPY

The yen took advantage of weak economic data from most major economies and advanced to the dollar, pound, and euro in Tuesday’s trading sessions. There have been no major reports released from Japan but the run in risk aversion was enough to boost the yen. For today, core machinery orders data is due and might show a 10.8% decline due to the recently implemented sales tax hike.

Commodity Currencies (AUD, NZD, CAD)

The comdolls stayed resilient in yesterday’s trading sessions despite risk aversion taking over most of forex price action. Strong Chinese CPI was enough to keep these currencies supported, as the promise of a pick up in the world’s second largest economy could be good for commodity exports. In Australia, Westpac consumer sentiment saw a 0.2% uptick and gave further support for the AUD. Later on, the RBNZ will announce its rate decision and a rate hike might be enough to support the potential uptrend among Kiwi pairs. No policy change, on the other hand, might push NZD lower.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 12, 2014)

USD

The US dollar struggled to extend its rallies in the latest trading sessions, as data from the US economy simply came in line with expectations. Crude oil inventories showed a 2.6 million deficit while the Federal budget balance printed a 130 billion USD deficit. Price action among dollar pairs could pick up today with the US retail sales figures up for release. Headline retail sales could show a 0.5% gain while core retail sales might see a 0.4% uptick, both stronger than the previous month’s figures. Initial jobless claims and import prices data are also due today.

EUR

The euro managed to consolidate against the dollar and reduce its losses to the Japanese yen in the latest round of forex trading. There were no reports released from the euro zone then but it appears that some traders booked profits off key support levels on their euro short positions. German WPI and French CPI are due today, both of which could provide clues on whether or not inflation is likely to keep weakening in the region. Euro zone industrial production data is also due today and might show a 0.5% rebound.

GBP

The pound extended its gains to its major forex counterparts when UK jobs data came in strong. The claimant count change made a 27.4K drop in joblessness, enough to bring the UK jobless rate down from 6.8% to 6.6%. This led to speculation that the BOE might start to consider tightening monetary policy or reducing its stimulus soon, pushing the pound to new highs against most of its counterparts.

CHF

The franc kept showing signs of weakness when Swiss retail sales came in much weaker than expected the other day. There have been no reports released from Switzerland yesterday and none are due today, which suggests that traders might dump the franc because of the downturn in Swiss data.

JPY

The yen held on to its recent wins against most of the weaker currencies when Japan’s core machinery orders report printed better than expected results. Analysts were expecting to see an 11.5% decline but the actual figure was down by only 9.1% even with the sales tax hike. This goes to show that the Japanese economy could stay resilient even without BOJ stimulus.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi got a very strong boost in recent trading when the RBNZ hiked interest rates by 0.25% in their latest rate decision. Governor Wheeler went on to say that further tightening moves could be seen as the central bank attempts to keep inflation contained, which means that their rate hiking cycle is not yet over. Meanwhile, the Australian jobs report showed mixed results, with the employment change noting a decline in hiring and a downward revision in the previous month’s results and the jobless rate holding steady at 5.8% instead of rising to 5.9%. There have been no major reports released from Canada and none are due today but rising oil prices appear to be supporting the Loonie.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 13, 2014)

USD

The US dollar edged slightly lower in recent trading sessions as US retail sales data disappointed. The headline figure showed a 0.3% uptick versus the estimated 0.5% gain while the core version of the report showed a 0.1% increase instead of the projected 0.4% rise. The good news though is that the previous month’s readings enjoyed small upward revisions. US PPI and preliminary UoM consumer sentiment data are due today and another set of weak figures might keep the dollar weak until the end of the trading day.

EUR

The euro struggled to pause from its sharp selloff to the dollar as medium-tier data from the euro zone came in weaker than expected. Germany reported a 0.1% decline in its wholesale price index while France showed a flat reading for its CPI, reminding market watchers that deflation is a very real threat in the region. French final non-farm payrolls and German final CPI are due today, with downward revisions likely to result in euro weakness.

GBP

The pound staged a strong rally against all of its major forex counterparts when BOE Governor Carney stated that the UK central bank might hike interest rates earlier than markets expect. He noted that house price inflation might force the central bank to tighten earlier even if there’s considerable slack in the economy. Only the UK CB leading index is due today and this might not have such a huge impact on pound action.

CHF

The franc continued to lose ground to its forex trading rivals despite the lack of data from Switzerland. It appears that euro weakness is also dragging the franc lower to its counterparts. There are still no reports due from Switzerland today so the franc might keep following the euro’s footsteps or might be sensitive to risk sentiment.

JPY

The yen had a mixed performance as it simply reacted to currency-specific events. It lost ground to the Kiwi and pound but was able to advance against the Aussie and euro. There have been no major reports released from Japan yesterday as traders are gearing up for today’s BOJ interest rate decision. No monetary policy changes are expected but it will be interesting to see how the central bank reacts to the latest set of economic reports. Optimistic remarks could keep driving the yen higher.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, with the Kiwi being the strongest among the group. After all, the RBNZ just hiked interest rates again and hinted that they’re not done with tightening. The Australian dollar suffered a brief selloff thanks to weak jobs data while the Loonie put up a good fight. Chinese industrial production and retail sales reports are due today and these might have a strong impact on market sentiment and comdoll trading.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies (June 17, 2014)

USD

The US dollar regained ground against most of its trading counterparts when most economic reports came in stronger than expected. The Empire State manufacturing index improved from 19.0 to 19.3 instead of dipping to the estimated 15.2 reading. Industrial production came in line with expectations of a 0.6% increase while capacity utilization data showed stronger than expected results. US CPI and housing starts data are due today and another round of good figures might extend the Greenback’s rally.

EUR

The euro paused from its recent recovery as it stalled below the 1.3600 mark to the dollar. Euro zone headline and core CPI came in line with expectations of 0.5% and 0.7% gains respectively. German and euro zone ZEW figures are up for release today and considerable improvements are expected, although this might set the stage up for disappointment. Weaker than expected figures could remind traders that the ECB is still ready to ease further and push the euro back in selloff mode.

GBP

The pound rallied against most of its counterparts, driven by positive CPI expectations for today’s release. There have been no reports released yesterday but it appears that traders are already bracing themselves for good UK data this week. CPI could slide from 1.8% to 1.7%, but the housing price inflation figures might draw more attention as strong gains could reinforce Carney’s view that rate hikes might take place earlier than expected.

CHF

The franc continued to show signs of weakness, as some market participants are already starting to place their bets for the SNB rate decision later on in the week. Swiss PPI data is due today and a flat reading is expected to follow the previous 0.3% decline. A weaker than expected reading could convince more traders that SNB easing is needed to ward off deflationary pressures.

JPY

The Japanese yen lost ground to some of its trading rivals as risk sentiment turned positive recently. There have been no reports released from Japan yesterday and none are due today, but the upcoming BOJ monetary policy meeting minutes in the next Asian trading session could renew yen strength if they show confidence in the economy.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar gave up a lot of ground when the RBA meeting minutes turned out dovish, indicating that policy might stay accommodative. This dashed hopes of a rate hike for the RBA this year. The Kiwi also followed suit, although the selloff was weaker since the RBNZ is more inclined to hike rates again. Canadian foreign securities purchases data was stronger than expected, providing some support for the Loonie. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 18, 2014)

USD

The Greenback traded mostly higher than its major forex counterparts, despite mixed data from the US economy. Building permits and housing starts posted weaker than expected results while CPI figures were better than expected. Headline CPI saw a 0.4% uptick while core CPI showed a 0.3% gain. For today, the FOMC interest rate decision will be the biggest mover for the US dollar. Yellen is expected to maintain the taper pace and announce the projections for growth and inflation. Hawkish remarks could lend support to the dollar while dovish comments could lead to a selloff.

EUR

The euro seemed immune to terrible economic data, as it barely sold off even with the bleak German ZEW reading. The figure slipped from 33.1 to 29.8 instead of improving to 35.2 while the euro zone ZEW did show an improvement but fell short of the estimated reading. There are no major reports lined up from the euro zone today so euro pairs might be in for a bit of sideways movement.

GBP

The pound is set to take center stage once more with the BOE monetary policy meeting minutes release. Yesterday’s CPI figures fell short of consensus but weren’t enough to derail the pound’s rallies. The headline figure slipped from 1.8% to 1.5%, indicating that the BOE probably shouldn’t tighten monetary policy just yet. However, more concerns raised on house price inflation in today’s minutes release might continue to drive rate hike expectations.

CHF

The franc struggled to hold steady in recent trading, with traders starting to place their bets on easing or intervention for the upcoming SNB rate decision. Swiss PPI came in better than expected with a 0.1% uptick instead of the estimated flat reading. Today, the Swiss ZEW is up for release and a stronger than expected report might reduce easing expectations.

JPY

The yen continued to weaken against its forex counterparts when the BOJ minutes revealed that policymakers thought the moderate recovery in the Japanese economy is likely to carry on. This sparked gains for the Nikkei and a pickup in risk sentiment. However, the board also cautioned about the downside risks to recovery particularly in emerging economies and commodity markets. There are no reports due from Japan today.

AUD

The Australian dollar lost a lot of ground in yesterday’s trading as the RBA minutes turned dovish. RBA Governor Stevens emphasized the need to keep monetary policy accommodative and that the Australian dollar is still high in historical standards. Earlier today, Australia’s CB leading index marked a 0.1% decline, lending more weakness to the Aussie. Canadian wholesale sales and NZ GDP are due later today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 19, 2014)

USD

The US dollar gave up a lot of ground in recent trading as the FOMC statement wasn’t as hawkish as many expected. In fact, the Fed even had a slightly dovish tone as policymakers announced downgraded GDP forecasts for 2014. While the FOMC expects employment and inflation to improve, they also agreed to keep interest rates low for a considerable time. Yellen did not give any time frame on when the Fed might start tightening, leading to another wave of dollar weakness. For today, initial jobless claims and Philly Fed index are up for release.

EUR

The euro made a bit of a recovery against the dollar yesterday, as there were no major reports released from the euro zone. There are still no major reports lined up from the region today, as the shared currency could react to the SNB interest rate decision later on.

GBP

The pound had a volatile trading day, with the BOE meeting minutes setting the tone for future monetary policy expectations. The minutes revealed that policymakers are looking to hike interest rates within the year, but it appears that markets have already priced in this possibility and were hoping to hear more hawkish remarks from the central bank. UK retail sales are up for release today and a 0.5% decline is expected to follow the previous 1.3% increase.

CHF

The franc is in for some action in today’s trading sessions, with the SNB set to announce its rate statement. Recall that SNB head Thomas Jordan previously said that they might ease if the ECB decides to cut rates. After all, they are intent on keeping the franc weak and holding on to the EUR/CHF peg. Jawboning or actual intervention might also be a possibility.

JPY

The yen gave up a bit of ground when risk appetite surged in the late trading sessions, as the FOMC’s pledge to keep interest rates low drove equities to new highs. There have been no reports released from the Japanese economy then and none are due today, which suggests that the yen might keep moving to the tune of risk sentiment for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

Despite the weaker than expected New Zealand GDP reading of 1.0% versus the estimated 1.2% growth, the New Zealand dollar was able to draw support from analysts’ estimates that another RBNZ rate hike will take place in July. The Australian dollar also drew support from these forecasts. Meanwhile, Canada printed stronger than expected wholesale sales, which were up by 1.2% versus the expected 0.3% uptick. No reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 20, 2014)

USD

The US dollar still lacked support in recent trading sessions, as risk appetite picked up and traders are disappointed about the latest FOMC statement. Data from the US was slightly better than expected, as initial jobless claims printed a 312K figure versus the estimated 316K reading. The Philly Fed index showed an improvement from 15.4 to 17.8 instead of dipping to 14.3. There are no major reports due from the US economy today, which suggests that quiet price action might be seen unless profit-taking takes place ahead of the weekend.

EUR

The euro edged lower mostly to the franc in yesterday’s trading sessions, despite the lack of economic releases from the region. For today, German PPI is up for release and a 0.2% uptick might be seen Also due today is the euro zone current account balance, which might show a larger surplus. If actual results come in stronger than expected, the euro might have a chance at regaining a bit of ground.

GBP

The pound struggled to hold on to its gains when the UK retail sales report simply came in line with expectations of a 0.5% decline. Aside from that, the previous month’s reading was revised down from 1.3% to just 1.0%. Nevertheless, the pound stayed supported as traders are pricing in BOE rate hike expectations for this year. Only the public sector net borrowing report is due from the UK today and a higher reading than the 11.8 billion GBP consensus might be bearish for the pound.

CHF

The franc rallied after finding relief at the SNB’s decision to keep monetary policy unchanged. Many were expecting to see easing or central bank intervention in order to defend the EUR/CHF floor now that the ECB has implemented several rate cuts. The central bank kept its growth forecast unchanged and upgraded its inflation forecast for the year. Despite that, the prospect of easing or intervention is still on the table, depending on how the franc performs in the near term.

JPY

The yen gave up ground as risk appetite extended its stay in the markets. There have been no major reports released from Japan then and only BOJ Governor Kuroda’s speech is due today, which suggests that yen pairs might keep moving based on risk sentiment until the end of the week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground as risk appetite picked up, despite the lack of major data from the comdoll economies. Only the Canadian CPI figures are due today, along with its retail sales reports. Core CPI could increase by another 0.2% while headline CPI could also post a 0.2% gain. Headline retail sales could show a 0.4% rebound while core retail sales could also increase by 0.4%.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 23, 2014)

USD

The US dollar had a small recovery on Friday, as traders booked their post-FOMC dollar short profits. There have been no major reports from the US economy then, and only the flash manufacturing PMI and existing home sales data are due today. The manufacturing PMI is expected to dip from 56.4 to 56.1 in June while the existing home sales report might show a pickup from 4.65 million to 4.74 million. Stronger than expected data might lend more support to the dollar while bleak figures could lead the selloff to resume.

EUR

The euro still showed signs of weakening against its major forex counterparts, as the prospect of further ECB easing weighed on the shared currency. German PPI was weaker than expected, as the report showed a 0.2% drop in producer prices after the previous 0.1% decline. Meanwhile, the current account balance came in better than expected, as the surplus grew to 21.5 billion EUR versus the estimated 19.4 billion EUR. On top of that, the previous month’s reading was revised higher to 19.6 billion EUR.

GBP

The pound rebounded on Friday, as the public sector net borrowing report of the UK government came in better than expected. The deficit stood at 11.5 billion GBP instead of the estimated 11.8 billion GBP, while the previous month’s reading was revised to a better 9.0 billion GBP borrowing figure. Only the BOE credit conditions survey is due from the UK today and improvements might lead to more pound gains.

CHF

The franc seemed ready to resume its selloff on Friday, following the short-term rally spurred by the SNB inaction. There have been no reports released from Switzerland on Friday and none are due today, which suggests that the franc might be sensitive to risk sentiment for the next few trading hours.

JPY

The yen weakened towards the end of the week when BOJ Governor Kuroda admitted that the recent sales tax hike is causing fluctuations in the economy. There have been no other events in Japan last Friday but the flash manufacturing PMI released earlier today showed an improvement from 49.9 to 51.1, reflecting a return to expansion for the industry. Another speech by Kuroda is scheduled for today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls strengthened at the start of the week when Chinese manufacturing PMI came in stronger than expected, and confirmed hopes of a rebound in the world’s second largest economy. The HSBC flash figure climbed from 49.4 to 50.8 in June, outpacing the consensus at 49.7. Risk appetite has been supporting the higher-yielding comdolls so far and it appears that they might be able to hold on to their latest gains since there are no other reports lined up for the rest of the day. Earlier this week, New Zealand reported a 0.3% uptick in visitor arrivals and also added to Kiwi gains.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 24, 2014)

USD

Although the US dollar had a volatile trading day, it was practically range-bound against most of its major forex counterparts. Data from the US was stronger than expected, as both the flash manufacturing PMI and existing home sales beat expectations. Flash manufacturing PMI for June climbed from 56.4 to 57.5 instead of dipping to 56.1 while existing home sales improved from 4.66M to 4.89M. US consumer confidence and new home sales data are up for release today, with similar improvements expected.

EUR

The euro suffered a brief selloff to its major forex rivals when German and French PMI readings from the manufacturing and services industries came in short of expectations. France reported deeper contractions in its manufacturing and services sectors while German showed a slower expansion. Overall, euro zone manufacturing and services PMIs showed slowdowns and suggested that the ECB might consider further easing. German Ifo business climate data is due today.

GBP

The pound made a quick bounce in recent trading despite the lack of major reports from the UK economy. The BOE inflation report hearings are scheduled for today and this might cause volatility among pound pairs, as the event could shed light on policymakers’ assessment of the economy. Hawkish remarks in support of a rate hike this year could lead to a fresh wave of rallies for the pound.

CHF

The franc lost a bit of ground in recent trading, owing mostly to weakness in euro zone data. There have been no reports released from Switzerland, yet German and French PMI readings have fallen short of expectations and led to franc selling. There are still no reports due from Switzerland today, which suggests that the franc could follow in the euro’s footsteps.

JPY

The yen continued to lose ground to higher-yielders as risk appetite picked up but still managed to end higher against the lower-yielding US dollar. There have been no reports released from Japan yesterday and none are due today, which suggests that the currency might stay sensitive to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gained ground as risk sentiment continued to improve for the trading day. The improvement in the Chinese HSBC flash manufacturing PMI has been mostly responsible for giving support to the commodity currencies, as there have been no reports released from Australia, Canada, and New Zealand so far. There are still no reports lined up from these countries for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 25, 2014)

USD

The US dollar had a mixed performance to its major counterparts in recent trading as it acted mostly as a counter currency. There were no major reports released from the US economy except for the CB consumer confidence and new home sales report, which both came stronger than expected. For today, durable goods orders and final GDP data are due. Recall that the US GDP had been downgraded to show a 1.0% contraction in the first quarter and a deeper contraction of 1.8% might be shown and lead to a dollar selloff.

EUR

The euro seemed immune to bleak figures, as the German Ifo business climate report came in below expectations but failed to usher in more euro weakness. The index fell from 110.4 to 109.7 instead of just dipping to 110.3. German GfK consumer climate data is due today and an improvement from 8.5 to 8.6 is eyed, although it is unlikely. Weaker than expected data could lead the euro selloff to resume.

GBP

The pound returned most of its recent gains when BOE Governor Carney didn’t sound so hawkish in the latest BOE inflation report hearings. Some officials noted that he is giving mixed signals, but the BOE head clarified that he is simply taking his cues from economic data. Lower expectations of a rate hike for this year have been priced in, but the fact remains that the BOE is considering reducing its stimulus sooner or later.

CHF

The franc was able to take advantage when higher-yielders retreated in recent trading sessions. There have been no reports released from Switzerland then and only the UBS consumption indicator is due today. An improvement from the previous 1.72 reading could lead to more franc gains while weak data could force the selloff to return.

JPY

The yen was able to advance when risk appetite pulled back in recent trading sessions but traders still seemed unimpressed with the BOJ’s monetary policy stance. There have been no reports released from Japan then and none are due today, which suggests that yen pairs could be sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls also took a turn for the worse in recent trading when risk appetite retreated. There have been no reports released from Australia, New Zealand and Canada then and none are due today, which means that sentiment could continue to dictate the movement of these higher-yielders.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 26, 2014)

USD

The US dollar suffered huge losses to most of its major counterparts in recent trading, as the GDP reading was downgraded to show a 2.9% contraction. Recall that the GDP has already been downgraded from an initial positive reading to a 1.0% contraction in the latest revision. Apparently, exports had to be revised much lower and personal spending significantly downgraded because of a massive decline in healthcare spending. However, some traders brushed this report aside since it’s backward looking and doesn’t accurately reflect improvements in other sectors of the economy. Initial jobless claims, core PCE price index, and personal spending and income data are due today. Stronger than expected figures could allow the dollar to recover.

EUR

The euro advanced to the dollar but retreated against its other forex counterparts, despite the improvement in German GfK consumer climate data. The figure climbed from 8.6 to 8.9 instead of holding steady at 8.6. For today, there are no major reports lined up from the euro zone but the EU Economic Summit is going on and it would be interesting to see the updates on this event and how it could impact ECB policy and euro action.

GBP

The pound continued to correct from its recent price rallies, as it pulled back to support levels against its forex counterparts. CBI realized sales was weaker than expected as the index fell from 16 to 4 instead of improving to 25. BOE Governor Carney is set to testify again today and his remarks could carry a lot of weight in determining pound price action if he sets the record straight on what the BOE rate hike bias for the year will be.

CHF

The franc managed to score some gains against its forex counterparts as the UBS consumption indicator climbed from 1.68 to 1.77, indicating a pickup in spending. For today, there are no reports lined up from Switzerland so franc pairs might be in for consolidation.

JPY

The yen advanced to the dollar and most of its forex rivals as risk appetite slowed down in recent trading. There have been no reports released from Japan then and none are due today, suggesting that risk sentiment might continue to be the main driver of price action.

Commodity Currencies (AUD, NZD, CAD)

Comdolls recovered from their recent selloff, with NZD/USD climbing higher to the .8775 area and AUD/USD pulling back to broken support levels. There have been no reports released from the comdoll economies yesterday, which suggests that the move has been mostly a result of dollar weakness. There are still no reports due from the comdolls today, with the New Zealand trade balance due in the next Asian trading session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 30, 2014)

USD

The US dollar had a strong run on Friday, as data from the US economy came in mostly better than expected and traders booked profits off their dollar short positions. The UoM consumer sentiment reading was revised up from 81.2 to 82.5 versus expectations of an 82.2 reading. Meanwhile inflation expectations improved from 3.0% to 3.1%. For today, Chicago PMI and pending home sales are due. The PMI is expected to dip from 65.5 to 63.2 while pending home sales could see a stronger 1.4% increase compared to the previous 0.4% uptick.

EUR

The euro put up a pretty good fight on Friday, as data from the euro zone came in mostly better than expected. The German preliminary CPI showed a 0.3% rise versus the estimated 0.3% uptick while French consumer spending saw a 1.0% gain instead of the predicted 0.3% increase, while the previous reading was upgraded. Spanish flash CPI, however, fell short of expectations with its mere 0.1% uptick while German import prices stayed flat. German retail sales, euro zone money supply, private loans, and flash CPI estimates are lined up for today so the euro might be in for a volatile trading session.

GBP

The pound retreated on Friday as some traders exited their long pound positions at the end of the month and the quarter, prior to a shortened trading week this week. UK current account was weaker than expected, as the actual result showed a wider deficit of 18.5 billion GBP versus the estimated 17.1 billion GBP shortfall while the previous month’s balance was downgraded. Final GDP was unchanged at 0.8%, as expected. For today, only the net lending to individuals report is up for release from the UK.

CHF

The franc advanced to the dollar in Friday’s trading when the Swiss KOF economic barometer came in stronger than expected. The actual reading came in at 100.4 versus the estimated 100.2 figure while the previous month’s report had an upward revision to 100.1. There are no reports lined up from Switzerland today.

JPY

The yen got back on its feet last week as risk aversion took a peek back in the forex market. Stronger than expected retail sales and inflation data from Japan also added to yen support, although many are still waiting for the rest of the top-tier releases this week to assess how much damage the sales tax hike has caused. The Tankan manufacturing and non-manufacturing indices are due in the next Asian trading session and both reports are slated to show dips.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued its rally on Friday despite weaker than expected medium-tier inflation data. Raw materials saw a 0.4% decline while industrial products printed a 0.5% drop, signaling a potential downturn in consumer inflation later on. Earlier today, Australia’s new HIA new home sales report showed a 4.3% decline while New Zealand’s ANZ business confidence figure fell from 53.5 to 42.8. As for Canada, the monthly GDP figure is up for release and a 0.2% growth figure is eyed

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 1, 2014)

USD

The US dollar lost a lot of ground to its forex counterparts at the end of the month and quarter, despite mixed economic data. Pending home sales marked a 6.1% increase while Chicago PMI fell from 65.5 to 62.6, reflecting a weaker expansion in the manufacturing industry. US ISM manufacturing PMI is up for release today and an improvement from 55.4 to 55.6 is expected, but weaker than expected data could push the dollar lower against its counterparts.

EUR

The euro recovered in recent trading, as inflation data showed some improvement. The headline flash CPI estimate for the euro zone held steady at 0.5% while the core CPI forecast improved from 0.7% to 0.8%. German retail sales, however, was weaker than expected at -0.6% versus the estimated 0.8% increase. Italian and Spanish manufacturing PMI are up for release today and both are expected to show improvements. German unemployment change is also due today and a 9K drop in joblessness is set to follow the previous 24K drop in hiring.

GBP

The pound made another strong upside break against its forex rivals when UK net lending to individuals data came in stronger than expected. The report showed a 2.7 billion GBP reading versus the estimated 2.5 billion GBP figure and the previous 2.4 billion GBP reading. UK manufacturing PMI is up for release today and a dip from 57.0 to 56.7 is expected, but stronger than expected data could allow the pound to extend its rally.

CHF

The franc gained ground to the dollar in recent trading even though there were no reports released from Switzerland. For today, the SVME PMI is due and it might show a climb from 52.5 to 52.6, which might help give another boost to the franc. Weak data, on the other hand, could force the Swiss currency to return most of its recent wins.

JPY

The yen gave up ground to its higher-yielding forex counterparts when Japan’s Tankan reports showed weakness. The manufacturing component showed a drop from 17 to 12 while the non-manufacturing index slid from 24 to 19 as expected. Earlier today, the final manufacturing PMI release showed a small upward revision from 51.1 to 51.5 but failed to lift the yen. There are no other reports up for release from the Japanese economy for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls extended their wins to the dollar, despite relatively bleak reports from Australia, New Zealand, and Canada. The monthly Canadian GDP reading showed a 0.1% growth figure instead of the estimated 0.2% expansion. Earlier today, the Chinese official manufacturing PMI release showed a slightly better than expected 51.0 figure versus the previous 50.8 reading. The RBA rate decision is the main market mover for the Australian dollar today but no policy changes are expected. No other reports are due from the comdolls, as Canada has a bank holiday today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 2, 2014)

USD

The US dollar had another weak run in the latest trading session, as risk appetite picked up at the start of the new trading month and quarter. Data from the US economy was also weaker than expected, as the ISM manufacturing PMI fell from 55.4 to 55.3 instead of improving to the estimated 55.6 figure. Construction spending and IBD/TIPP Economic Optimism also missed expectations. US ADP non-farm employment change, factory orders, and crude oil inventories are up for release today. The bigger market-mover might be Fed Chairperson Yellen’s speech during the US trading session, as she might shed some light on the Fed’s monetary policy stance.

EUR

The euro took advantage of the run in risk appetite to gain ground against the yen and dollar. Against the Aussie and Kiwi though, the euro still caved. Data from the euro zone came in mixed, with the Spanish manufacturing PMI beating expectations and Italian manufacturing PMI coming up short. Euro zone jobless rate was better than expected at 11.6% versus the 11.7% consensus. The Spanish unemployment change report is lined up for today and might dictate direction for euro pairs.

GBP

The pound was able to extend its gains in recent trading, thanks to stronger than expected UK manufacturing PMI. The index jumped from 57.0 to 57.5 instead of falling to 56.7. Construction PMI and Nationwide HPI are due today, both of which are not slated to have a huge impact on price action. Keep your eyes peeled for another strong increase in house prices though, as the BOE is monitoring home inflation to gauge whether monetary policy needs to be tightened sooner rather than later.

CHF

The franc was able to advance against the dollar recently when the SVME PMI beat expectations and climb from 52.5 to 54.0 instead of just ticking higher to 52.6. There are no reports lined up from Switzerland today so the franc might act more like a counter currency in the next few hours.

JPY

The yen was trampled upon in the risk rallies yesterday, as the weak Tankan survey results weighed on the currency. This revived talks of potential easing from the BOJ, as both the manufacturing and non-manufacturing components reflected weakness. There are no reports due from Japan today, suggesting that the yen could be driven by market sentiment once more.

Commodity Currencies (AUD, NZD, CAD)

The comdolls extended their gains in recent trading, particularly to the lower-yielding yen and U.S. dollar. China reported improvements in its official and HSBC manufacturing PMI, which explains the pickup in risk appetite, while the RBA had a less dovish than expected statement and boosted the Australian dollar. Earlier today though, the Australian trade balance came in weaker than expected and forced the Aussie to return some of its recent wins. No other reports are due from the commodity currencies’ economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 3, 2014)

USD

The US dollar found its legs in yesterday’s trading session when US data came in mostly in line with expectations. The factory orders report showed a 0.5% dip while crude oil inventories showed a 3.2 million barrel shortfall. The ADP non-farm employment change report printed a better than expected 281K increase versus the estimated 207K figure and the previous 179K reading. For today, the non-farm payrolls report is up for release and it might show a drop from 217K in May to 214K in June, just enough to keep the jobless rate steady at 6.3%.

EUR

The euro gave back some of its recent gains to the dollar as the Spanish unemployment change report showed a smaller than expected 122.7K pickup in hiring versus the estimated 147.3K figure. However, this is still an improvement from the previous 111.9K reading. For today, Spanish and Italian services PMI are up for release, but the bigger market mover is the ECB rate statement. No actual policy changes are expected but market watchers will keep tabs on Draghi’s press statement, as this might give clues on next policy moves.

GBP

The pound extended its gains in recent trading when construction PMI also came in stronger than expected, following the previous day’s better than expected manufacturing PMI release. The construction index climbed from 60.0 to 62.6 instead of dipping to the projected 59.7 figure. For today, the services PMI is up for release and might also show a strong reading instead of dipping from 58.6 to 51.6 as analysts expect.

CHF

The franc returned some of its recent gains to the dollar as there were no reports released from Switzerland and data from the euro zone was weak. For today, there are still no reports due from Switzerland but the ECB rate statement could have a bigger impact on the franc’s price action today.

JPY

The yen made a bit of recovery when risk aversion peeked back in the markets, but it still gave ground to the US dollar. There have been no reports released from Japan yesterday and none are due today, which suggests that risk sentiment could be the main driver of price action among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar erased most of its recent gains when both trade balance and retail sales came in weaker than expected. The trade deficit widened from a downgraded 0.78 billion AUD deficit in April to a 1.91 billion AUD shortfall in May, worse than the estimated 0.16 billion AUD deficit. Retail sales slumped by 0.5% instead of staying flat while the previous figure was downgraded from a 0.2% increase to a 0.1% decline. There are no reports due from New Zealand while Canada has its trade balance due.

By Kate Curtis from Trader's Way