Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (July 28, 2014)

USD

Economic data from the US was mostly stronger than expected last Friday, allowing the dollar to keep rallying against its major counterparts. Headline durable goods orders marked a 0.7% gain while the core figure showed an increase of 0.8%, higher than the estimated 0.4% increase in headline durable goods orders and the projected 0.6% rise in the core figure. This also marked a considerable improvement over the flat core figure in the previous month and a recovery in the 0.9% headline decline. US flash services PMI is up for release today and might show a climb from 61.0 to 62.3. Existing home sales is also due.

EUR

The euro continued to weaken against most of its forex counterparts when the German IFO business climate report fell short of expectations. The figure slipped from 109.7 to 108.0 instead of just dipping to the estimated 109.6 reading. GfK German consumer climate made it just above expectations at 9.0 versus 8.9. M3 money supply and private loans data printed stronger than expected results but these were not enough to keep the shared currency supported. There are no reports due from the euro zone today.

GBP

The pound retreated further on Friday when the preliminary GDP figure failed to impress. The report showed a 0.8% growth figure as expected and same as the pace of expansion in the first quarter. There are no reports up for release from the UK today and the recent shift in bias for the pound might keep weighing on the currency.

CHF

The franc followed the euro and weakened to its forex counterparts last week, as there were no reports to keep the currency supported on Friday. There are still no reports up for release from Switzerland today, which suggests that the franc might take its cue from risk sentiment or euro price action.

JPY

The yen had a mixed performance on Friday, as it functioned mostly as a counter currency. It gave up some ground to the dollar but advanced to the euro, Australian dollar, and Kiwi. Inflation reports from Japan were slightly stronger than expected, with the Tokyo core CPI showing a 2.8% reading and the national core CPI showing a 3.3% gain. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a rough patch on Friday, as they mostly weakened to their counterparts. The Kiwi was weighed down by the RBNZ’s decision to pause from its rate hikes and to jawbone their currency, while the Loonie was dragged lower by the switch in BOC rhetoric earlier. There are no reports due from the comdoll economies today so it could be all about risk sentiment driving price action.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 29, 2014)

USD

Data from the US economy was weaker than expected yesterday, as the flash services PMI held steady at 61.0 instead of improving to the expected 62.3 reading. Pending home sales fell by 1.1% instead of just 0.2%, erasing part of the 6.0% gain in the previous month. US CB consumer confidence and S&P/CS composite house price index are due today and small improvements are expected. However, if the actual data misses expectations, the US dollar could be forced to return some of its recent gains.

EUR

The euro fought to hold on to its current levels against the dollar as there were no major reports released from the euro zone yesterday. Only German import prices data is up for release today and it might show a 0.3% uptick from the previous flat reading. A higher than expected figure could give a small boost for the euro as it would reveal a pickup in inflationary pressures.

GBP

The pound managed a small rebound in recent trading, despite the lack of data from the United Kingdom. Net lending to individuals and mortgage approvals data are up for release today and strong data could give more fuel to the pound’s fire. Recall that housing and debt levels have been closely monitored by the UK government and the BOE so any improvements could lead to a more positive outlook and renew rate hike expectations.

CHF

The franc moved sideways to the dollar in recent trading, as there were no major reports released from Switzerland yesterday. There are still no reports up for release today, which suggests that the franc could act more as a counter currency in the next few hours.

JPY

The yen returned some of its recent wins when today’s set of releases missed expectations. Retail sales fell by 0.6% on an annualized basis, worse than the estimated 0.4% drop, while the unemployment rate climbed from 3.5% to 3.7% instead of holding steady. Household spending marked a 3.0% drop, not as bad as the projected 3.7% decline. No other reports are up for release from Japan for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls retreated once more, as there were no reports to support risk taking yesterday. News of a potential default in Argentina also weighed on market sentiment. In Australia, HIA new sales picked up by 1.2% from the previous 4.3% decline. New Zealand building consents data is up for release in the next Asian trading session.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 30, 2014)

USD

The US dollar was still in rally mode yesterday as data from the US economy came in stronger than expected. The CB consumer confidence index showed a climb to 90.9, higher than the estimated 85.5 reading, while the previous report showed an upgrade from 85.2 to 86.4. Today, the US dollar could be a big mover again, as the US advanced GDP report and FOMC statement are lined up. A growth figure of 3.1% is eyed, which would be enough to erase the 2.9% contraction in the previous quarter. The FOMC is expected to continue with their taper program and possibly acknowledge the improvements in the labor sector and inflation, although there is no press conference scheduled after the event.

EUR

The euro continued to slide lower against most of its major counterparts in recent trading. Data from the euro zone was weaker than expected, as German import prices showed a mere 0.2% uptick versus the estimated 0.3% gain. German preliminary CPI is up for release today, along with Spanish flash CPI and GDP data. Strong results could allow the euro to rebound while another round of weak figures could lead to more euro weakness.

GBP

The pound retreated further to its forex counterparts, even as UK data came in slightly stronger than expected. Net lending to individuals came in as expected at 2.5 billion GBP while mortgage approvals climbed from 62K to 67K. There are no reports due from the UK today, which suggests that the pound might keep sliding or might be in for consolidation.

CHF

The franc simply followed the euro’s footsteps in recent trading, as there were no reports released from Switzerland yesterday. For today, Swiss KOF economic barometer and UBS consumption indicator are due, with improvements likely to result to support for the franc.

JPY

The yen was in for a bit of consolidation against its forex counterparts but it lost ground to the dollar. Japanese data came in mixed, with retail sales and jobs data printing weaker than expected results and household spending showing a smaller than expected decline. Preliminary industrial production came in weaker than expected earlier today as it marked a 3.3% decline versus the estimated 1.0% drop. There are no other reports up for release from Japan today.

Commodity Currencies (AUD, NZD, CAD)

New Zealand reported a 3.5% rebound in building consents for June but this was not enough to keep the Kiwi strongly supported, as news of Fonterra’s lower milk payout weighed on the currency. Canada’s underlying inflation data, namely RMPI and IPPI, are up for release today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (July 31, 2014)

USD

The US dollar had a strong positive reaction to better than expected advanced GDP data, which showed that the economy expanded by 4.0% in the second quarter of the year. This was much higher than the estimated 3.1% increase. However, the currency returned some of its recent gains when the FOMC made its interest rate statement and stopped short of switching to a more hawkish bias. The Fed acknowledged the pickup in hiring and inflation but made a few cautionary remarks while dissenter Charles Plosser failed to draw enough support in tweaking the forward guidance to show clearer clues on when the central bank might hike rates.

EUR

The euro had a volatile day, as it bounced around during the U.S. trading session. Data from the euro zone was mixed, as the German preliminary CPI came in higher than expected at 0.3% while the Spanish flash CPI posted a 0.3% decline instead of the estimated 0.2% uptick. Spanish flash GDP came in slightly better than expected at 0.6% versus the consensus at 0.5%. German retail sales and unemployment change, along with French consumer spending data, are up for release today but the bigger movers might be the euro zone CPI estimates.

GBP

The pound continued its slide lower as there were no reports from the UK to give it any support yesterday. Earlier today, GfK consumer confidence came in weaker than expected as it dropped from 1 to -2 instead of improving to 2. Later on, the Nationwide HPI is up for release and might show a 0.6% increase in house prices, weaker compared to the previous 1.0% gain.

CHF

The franc weakened to the dollar in recent trading, as Swiss economic data mostly came in weaker than expected. The KOF economic barometer slipped from 100.5 to 98.1 instead of improving to 101.1 while the UBS consumption indicator came in at 2.06, which was still an improvement from the previous 1.80 reading. There are no reports due from Switzerland today as the franc could take its cue from euro movement.

JPY

The yen gave up ground to most of its major counterparts after Japan’s preliminary industrial production report showed a worse than expected 3.3% decline. Average cash earnings and housing starts are due for today and another set of weak figures might lead to more yen weakness.

Commodity Currencies (AUD, NZD, CAD)

The Aussie got hit by a set of weak figures earlier in the day, as building approvals marked a 5.0% drop while import prices declined by 3.0% Canadian GDP is up for release later on and might show a 0.3% monthly economic expansion. 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 (Aug 1, 2014)

USD

After its recent strong rallies, the US dollar paused and consolidated to most of its major counterparts. Data from the US economy was mixed, as the initial jobless claims came in line with expectations, the Chicago PMI missed expectations, and the quarterly employment cost index showed stronger than expected gains. For today, the much-awaited non-farm payrolls report is up for release. The figure is slated to come in at 231K, weaker compared to the previous 288K gain, while the jobless rate is expected to hold steady at 6.1%. Stronger than expected figures could lead to more gains for the US dollar.

EUR

The euro made a small rebound in recent trading as data from the euro zone came in mostly stronger than expected. Germany’s retail sales report showed a 1.3% gain versus the estimated 1.1% increase. The unemployment change showed a 12K drop in joblessness, better than the estimated 5K decline. French consumer spending also came in higher than expected with a 0.9% gain versus the projected 0.3% increase. The headline CPI flash estimate dropped from 0.5% to 0.4% though while the core CPI flash estimate held steady at 0.8%. Spanish and Italian PMI are up for release today.

GBP

The pound continued to edge lower to most of its major counterparts, as medium-tier data from the UK came in weaker than expected. The GfK consumer confidence report showed a drop from 1 to -2 instead of improving to 2 while the Nationwide HPI marked a mere 0.1% uptick versus the estimated 0.6% increase, weaker than the previous 1.0% gain in house prices. UK manufacturing PMI is up for release today and it might show a decline from 57.5 to 57.1.

CHF

The franc gradually weakened in recent trading, as there were no reports to give it support. It failed to take advantage of the rebound in euro zone data, as it edged lower to the dollar. Swiss banks are on holiday today so franc pairs might be in for consolidation.

JPY

The yen paused from its selloff recently, even though Japan’s average cash earnings disappointed and the housing starts showed another decline. Average cash earnings showed a mere 0.4% increase instead of the estimated 0.7% gain while housing starts showed a 9.5% decline, although this was better than the estimated 11.2% drop. Earlier today, Japan’s final manufacturing PMI showed a drop from 50.8 to 50.5. BOJ Kuroda has a testimony scheduled for today and this might cause volatility among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered another wave of selling today as Chinese PMI failed to impress. The official manufacturing PMI improved from 51.0 to 51.7 just as expected while the HSBC final manufacturing PMI was downgraded from 52.0 to 51.7. Australia’s quarterly PPI turned out to be a disappointment as it marked a 0.1% decline instead of the projected 0.7% gain. Canada, on the other hand, printed a better than expected monthly GDP reading of 0.4%. No other reports are due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (August 13, 2014)

USD
The US dollar returned some of its recent gains when data came in weaker than expected. The JOLTS job openings report marked a 4.67M gain, lower than the estimated 4.74M increase. Meanwhile, the NFIB small business index climbed from 95.0 to 95.7, short of the expected 96.3 figure. For today, US headline and core retail sales data are up for release with the former estimated to show a 0.2% gain and the latter to print a 0.4% rise. Data on business inventories and crude oil inventories are also up for release today.

EUR
The euro was driven lower by weaker than expected German and euro zone ZEW economic sentiment figures, although the shared currency managed to stage a strong recovery during the US session. German ZEW economic sentiment fell from 27.1 to 8.6, much lower than the estimated drop to 18.2. The euro zone ZEW economic sentiment figure slipped from 48.1 to 23.7, worse than the estimated drop to 41.3. Euro zone industrial production and German underlying inflation reports are due today.

GBP
The pound made quite a recovery against its counterparts in recent trading as traders closed off their short positions ahead of today’s top-tier events. The UK will print its claimant count change report and possibly show a 29.7K drop in claimants and an improvement in the jobless rate from 6.5% to 6.4%. After that, the BOE will release its inflation report and possibly announce changes to its growth and inflation forecasts. Unchanged estimates could keep the pound supported while downgrades could lead to a deeper selloff.

CHF
The franc gave up ground again when data from the euro zone came in weak and there were no reports from Switzerland to give its currency any support. There are still no reports up for release today, which suggests that the franc might take its cue from risk sentiment or euro zone data.

JPY
The yen weakened against its counterparts as Japan kept releasing weak economic figures. Earlier today, the Q2 GDP reading came in line with expectations and marked a 1.7% contraction, bringing the annualized pace of growth down by 6.8%. It seems though that the reaction has been priced in already and the lack of data from Japan for the rest of the day could keep yen pairs in range or slowly grinding higher.

Commodity Currencies (AUD, NZD, CAD)
The comdolls took advantage of dollar weakness to regain ground in recent trading. Australia’s NAB business confidence showed an improvement from 8 to 11 while its HPI marked a 1.8% quarterly gain. House prices in New Zealand showed a 0.7% decline though, leading to Kiwi weakness during the Asian trading session. Earlier today, Australia’s Westpac consumer sentiment report marked a 3.8% increase and gave support to the Aussie. Chinese reports such as industrial production and retail sales are due today.

By Kate Curtis from Trader's Way.

 

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Forex Major Currencies Outlook (August 15, 2014)

USD
The US dollar had a mixed performance as it advanced to the euro but gave up some of its gains against the comdolls then consolidated to the pound. Data from the US simply came in line with expectations, as the initial jobless claims landed at 311K while import prices marked a 0.2% decline as estimated. For today, data on producer prices is due, along with a couple of medium-tier reports. These are the Empire State manufacturing index and the preliminary consumer sentiment figure from the University of Michigan.

EUR
The euro suffered a strong selloff to most of its major counterparts when euro zone GDP figures came in the red. Germany reported a 0.2% economic contraction for the second quarter of the year while France showed no growth. Overall, the region’s GDP also showed a flat reading, leading many to predict that more weakness could be in the cards. After all, the EU imposed a sanction on Russia’s banking sector while Russia announced a ban on EU food imports. This could take its toll on foreign investment and trade activity later on. There are no reports due from the euro zone today as Italian and French banks are on holiday.

GBP
The pound managed to put up a fight in recent trading, despite the lack of top-tier data from the UK. The second estimate for the UK GDP is up for release today and no revisions are expected from the initially reported 0.8% reading. Downgrades, however, could lead to more losses for the pound while upgrades could lead to a rebound.

CHF
The franc gave back most of its recent gains to the dollar as the Swiss currency was also weighed down by bleak growth figures from the euro zone. Swiss PPI came in line with expectations and posted a flat reading. There are no reports due from Switzerland today.

JPY
The yen lost further ground in yesterday’s trading sessions, as traders started pricing in the possibility of seeing more easing from the BOJ. After all, data from Japan has mostly been weak and the central bank has been showing concern on the country’s export industry. Core machinery orders showed a mere 8.8% annualized gain versus the projected 15.5% increase. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)
Comdolls came back to life in recent trading as the Aussie, Kiwi, and Loonie managed to advance against the dollar. However, there have been no major reports released from these economies, as the pickup in risk sentiment may have kept the currencies afloat. There are still no reports due from these economies today, leaving the comdolls sensitive to risk flows.

By Kate Curtis from Trader's Way.

 

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Forex Major Currencies Outlook (August 18, 2014)

USD

Price gaps were seen all over dollar pairs in the start of this trading week as risk appetite appeared to improve over the weekend. Apart from that, data from the US economy came in weaker than expected on Friday, with consumer sentiment and the Empire State manufacturing index missing expectations. US PPI and core PPI came in line with estimates, showing a 0.1% and 0.2% gain respectively. Only the NAHB housing market index is due from the US today.

EUR

The euro made a recovery at the end of last week when traders booked profits off their short positions. There were no reports released from the region then, as Italian and French banks were on holiday. Only the trade balance and German Buba report are up for release today, with the trade surplus projected to narrow from 15.3 billion EUR to 14.9 billion EUR. Weaker than expected figures could increase concerns of a trade slump in the region, as it will deal with Russian food import sanctions soon.

GBP

Pound pairs gapped up over the weekend as traders booked profits ahead of this week’s top-tier events. Data from the UK came in line with expectations, as the second GDP estimate stayed unchanged at 0.8% while the index of services showed a 1.0% gain. Earlier today, the Rightmove HPI marked a 2.9% decline, following the previous month’s 0.8% drop. No other reports are due from the UK today.

CHF

The franc had a strong recovery on Friday, despite the lack of top-tier data from Switzerland. There are still no reports up for release from Switzerland today, leaving franc pairs to move to the tune of risk sentiment or to take its cue from euro movement.

JPY

The yen gave up ground on Friday when risk sentiment showed a bit of improvement. There were no reports released from Japan then and none are due today, which suggests that yen pairs could take their cue from market sentiment for the rest of the trading day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a decent recovery at the end of the trading week, thanks to the small pickup in sentiment. There were no reports released from the comdoll economies then. For today, Australia’s new motor vehicle sales report marked a 1.3% decline. Later on, New Zealand will report its PPI input and output figures, with weak data likely to result to Kiwi selling.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (August 19, 2014)

USD

The US dollar outpaced its major currency counterparts in yesterday’s trading session as risk aversion extended its stay and traders positioned themselves ahead of the Jackson Hole symposium. Medium-tier data from the US was better than expected, as the NAHB housing price index climbed from 53 to 55 instead of just holding at 53 as expected. For today, US headline and core CPI are due and these are expected to show a 0.1% and 0.2% gain respectively. Housing starts data is also up for release and a huge climb from 0.89M to 0.97M is projected.

EUR

The euro gave up a lot of ground to the dollar in recent trading, as the euro zone trade balance came in weaker than expected. The surplus narrowed from 15.2B EUR to 13.8B EUR, far below the estimate at 14.9B EUR. This suggests that the trade sector is already weak and that it might crumble under the food import sanctions imposed by Russia. Only the euro zone current account balance is up for release today and it might show a smaller surplus of 19.3B EUR from the previous 19.5B EUR.

GBP

The pound was stuck in consolidation in recent trading as there were no major reports to provide any direction. For today, UK CPI is up for release and a decline is expected from 1.9% to 1.8% in the headline figure. The core figure is likely to dip from 2.0% to 1.9%. Weaker than expected data could lead to a sharp selloff for the pound as it would indicate that the economic slack is starting to weigh on price levels.

CHF

The franc lost ground to the dollar since the currency simply took its cue from the euro. There were no reports released from Switzerland yesterday and there are none due today, suggesting that a bit of consolidation might be in the cards. Risk sentiment could also play a stronger role in driving franc pairs around today.

JPY

The yen was still in a weak spot even though there were no reports released from Japan recently. There are still no reports lined up from Japan today which means that yen pairs could keep following market sentiment, with a pickup in risk appetite likely to push the Japanese currency lower.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Kiwi suffered a sharp selloff in the early Asian trading session while the Aussie enjoyed gains. Bleak growth forecasts from the New Zealand government drove the Kiwi lower as traders also anticipated more weakness from the dairy auction later on. As for the Australian dollar, the less dovish than expected RBA meeting minutes kept the currency afloat against most of its counterparts. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (August 20, 2014)

USD

The US dollar surged higher in recent trading as housing data came in much stronger than expected. Building permits jumped from 0.97M to 1.05M while housing starts climbed from 0.95M to 1.09M. CPI figures were mixed, as the headline report showed a 0.1% gain as expected while the core figure also printed a 0.1% uptick, lower than the estimated 0.2% increase. Crude oil inventories are due today but the bigger market-mover might be the FOMC minutes release, which could show more clues on how the Fed plans to adjust monetary policy later on.

EUR

The euro suffered a sharp selloff to the dollar yesterday when the euro zone current account balance fell short of expectations. The report showed a surplus of 13.1 billion EUR, lower than the estimated 19.3 billion EUR reading and the previous 19.8 billion EUR surplus. Only the German PPI is up for release today and this report might show a flat reading. Weaker than expected data could lead to more losses for the euro.

GBP

The pound had a bloodbath in recent trading as the UK CPI figures turned out to be disappointing. The headline figure slipped from 1.9% to 1.6% instead of just dropping to the projected 1.8% reading while the core figure declined from 2.0% to 1.8%, lower than the estimated 1.9% reading. Underlying inflation reports were also weaker than expected, hinting that future CPI readings could be weighed down. For today, the BOE minutes might be more bearish for the pound as it would indicate why policymakers are less inclined to hike rates before the end of the year.

CHF

The franc gave up ground to the dollar despite the lack of top-tier data from Switzerland yesterday. Perhaps the Swiss currency took its cue from the euro or was simply defenseless against dollar strength. For today, there are still no reports lined up from Switzerland so the franc might be in for more weakness if sentiment does not change.

JPY

The yen was in a weak spot yesterday as risk appetite was up during the Asian trading session. There were no reports released from Japan though, leaving the yen vulnerable to risk sentiment. Japanese trade balance came in weaker than expected today, leading to a bit of yen selling. All industries activity index is up for release later on and another weak figure might lead to losses for the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to dollar strength yesterday, as the Aussie, Loonie, and Kiwi gave up most of their recent gains. Data from New Zealand was weak, as inflation expectations were revised down from 2.4% to 2.2% while the pre-election fiscal update showed downgraded growth forecasts. In Australia, the RBA minutes provided a bit of support for the currency during the Asian session as the report was not as dovish as expected. Canadian wholesale sales is up for release later on and might show a 0.4% uptick.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (August 21, 2014)

USD

The Greenback had a strong run in the latest NY trading session, as the FOMC minutes revealed that policymakers are considering tightening monetary policy sooner than anticipated. Fed officials acknowledged the pickup in hiring and growth for the past few months, although they still cautioned about the economic risks present. This sets the tone for the upcoming Jackson Hole Symposium, during which Yellen could talk about the US labor market and the Fed’s monetary policy plans. US initial jobless claims and flash manufacturing PMI are up for release today.

EUR

The euro gave up more ground to the dollar, although it managed to hold on to some of its recent gains against its other counterparts. German PPI came in weaker than expected at a decline of 0.1% versus the estimated flat reading. German and French PMI figures for the manufacturing and services sectors are up for release today, with small declines expected. Weaker than expected data could push the euro much lower against its counterparts.

GBP

The pound failed to take advantage of the relatively bullish BOE minutes, as the policymakers had a 2-7 vote to hike interest rates. As for asset purchases, the vote to keep it unchanged was unanimous. UK CBI industrial order expectations improved from 2 to 11, outpacing the consensus at 4. UK retail sales are due today and it might show a 0.4% increase, higher than the previous 0.1% uptick. Data on public sector net borrowing is also due today.

CHF

The franc weakened to the dollar in recent trading, as there were no releases from Switzerland to keep it supported. For today, the trade balance is up for release and it might show a wider surplus of 1.87 billion CHF. A higher than expected reading could keep the franc supported but a weak result could lead to more losses.

JPY

The yen gave up ground to the US dollar, as USDJPY broke past 103.00 when the FOMC minutes were released. It also lost ground to its other counterparts when risk appetite picked up later on. Japan’s flash manufacturing PMI was stronger than expected at 52.4 from 50.5, higher than the projected 51.7 reading. No other reports are due from Japan today, leaving the yen sensitive to risk sentiment.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (August 22, 2014)

USD

The US dollar gave back some of its gains in recent trading, as most traders booked profits off their dollar positions ahead of the Jackson Hole Symposium.Data from the US was stronger than expected, as the initial jobless claims came in below 300K while the flash manufacturing PMI jumped from 55.8 to 58.0. The Philly Fed manufacturing index also beat expectations and climbed from 23.9 to 28.0 instead of dipping to the estimated 19.7 reading. Existing home sales climbed from 5.03M to 5.15M while the CB leading index chalked up a higher than expected 0.9% gain. Fed Chairperson Yellen is set to testify in the Jackson Hole conference today and might lead to more dollar moves.

EUR

The euro saw a mixed set of PMI readings yet it managed to recover some of its losses in yesterday’s trading sessions. French flash manufacturing PMI came in below expectations and showed a larger contraction while its services PMI came in stronger than expected. German flash manufacturing PMI was in line with expectations but the previous reading was downgraded while its services PMI also came in better than expected. Overall, the euro zone had a weaker than expected manufacturing PMI reading of 50.8 and services PMI reading of 53.5 as expected. ECB head Draghi is set to speak at the Jackson Hole conference today and might trigger a strong reaction from the euro.

GBP

The pound suffered another wave of selling when the UK retail sales report showed weaker than expected results. For the month of July, only a 0.1% uptick was seen instead of the projected 0.4% increase. The good news though was that the June figure was upgraded from 0.1% to 0.2%. Despite that, the weak data from the UK this week was enough for traders to doubt the BOE’s credibility and question why a couple of policymakers voted to hike rates this early. There are no major reports due from the UK today.

CHF

The franc recovered a bit in yesterday’s trading sessions, as Swiss trade balance came in stronger than expected at 3.98B CHF. This was much higher than the projected 1.87B CHF surplus and the previous 1.41B CHF surplus. There are no major reports due from Switzerland today so the franc might be sensitive to risk sentiment.

JPY

The yen climbed steadily against its major counterparts in recent trading, as risk appetite continued to pick up. Japanese flash manufacturing PMI came in higher than expected as it climbed from 50.5 to 52.4, indicating a pickup in the industry’s expansion. There are no reports due from Japan today, with risk sentiment likely to be the main driver of price action for the yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had an upbeat trading day, as they were able to recover against the dollar and extend their gains to the yen. Australia’s CB leading index marked a 0.4% gain while New Zealand’s credit card spending report indicated a 4.5% increase. However, China’s HSBC flash manufacturing PMI showed a weaker than expected reading of 50.3 versus the estimated 51.5 figure. Canadian CPI and retail sales reports are up for release today and strong results could boost the Loonie higher against its counterparts.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (Aug 25, 2014)

USD

The US dollar gapped up against its forex counterparts over the weekend as Yellen’s Jackson Hole testimony turned out to be positive for the currency. While the Fed head didn’t commit to a rate hike timeline yet, she mentioned that tightening might happen earlier if the jobs market continues to show strong improvements. She also noted though that they could delay any policy adjustments if data remains weak. Apart from that, she shared the underlying data components that the Fed is looking at when it comes to assessing labor market improvements. US new home sales data is due today and it might show a gain from 406K to 426K.

EUR

The euro lost a lot of ground after ECB Governor Draghi emphasized that the central bank is ready to ease further if inflationary pressures weaken. He also mentioned that the region also needs to undergo structural reform for the monetary and fiscal accommodation to be more effective. German Ifo business climate data is due today and a decline from 108.0 to 107.1 is eyed. A weaker than expected reading might push the euro lower against its counterparts while a strong figure could lead to a quick bounce.

GBP

The pound gave up ground to the dollar but recovered to the Japanese yen, as there were no major announcements from the BOE. For now, traders are still digesting the minutes of the latest BOE meeting in line with the recent weak CPI and retail sales releases, trying to figure out if a rate hike this year is possible or not. UK banks are on holiday today, which might leave pound pairs in consolidation.

CHF

The franc followed the euro’s footsteps and weakened to the dollar, as there were no reports released from Switzerland on Friday. There are still no reports due from the country today so the currency might still take its cue from the euro or risk sentiment.

JPY

The yen lost a lot of ground to its forex partners as BOJ Governor Kuroda hinted that they are ready to ease further if needed. He acknowledged improvements in the Japanese economy but said that they are seeing weak wage growth and an increasing reliance on part-time work. There are no reports due from Japan today, leaving yen pairs sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls caved to dollar strength but some were able to take advantage of yen weakness, particularly the Australian dollar. Data from Canada has been mixed, with CPI figures coming in below estimates and retail sales data showing strong results. Headline CPI is down by 0.2% while core CPI is down by 0.1%. Headline retail sales showed a 1.5% gain while core retail sales printed a 1.1% increase. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 26, 2014)

USD

The US dollar retreated to some of its major forex counterparts in recent trading, allowing a few weekend gaps to get filled. Data from the US economy was weaker than expected, with new home sales coming in at 412K instead of the estimated 426K figure. The good news though is that the previous month’s reading was upgraded to 422K. For today, durable goods orders data are due, with the headline report set to show a 7.4% gain and the core report likely to print a 0.5% gain. CB consumer confidence data is also due and it might show a dip from 90.9 to 89.1.

EUR

The euro weakened to the yen and was unable to take advantage of dollar weakness, as German Ifo business climate came in weaker than expected. The figure dropped from 108.00 to 106.3, reflecting a downturn in business confidence. There are no reports due from the euro zone today, giving euro pairs a chance to recover from their recent declines or stay in consolidation.

GBP

The pound made a quick bounce in recent trading, with no reports released from the UK yesterday. Only the BBA mortgage approvals release is lined up for today and it might show a gain from 43.3K to 44.2K, reflecting a pickup in the UK housing industry. A weaker than expected report might be negative for the pound though while a strong reading could push for more gains among pound pairs.

CHF

The franc recovered from its recent selloff and managed to close its weekend gap to the dollar, even though there were no reports released from Switzerland. There are still no reports due from the country today, leaving franc pairs sensitive to risk sentiment for most of the day.

JPY

The yen made a few rebounds recently, but these were probably spurred by profit-taking and market corrections. There are no reports from Japan recently, as BOJ Governor Kuroda’s openness to further easing could keep the yen weak. Recall that the BOJ head spoke of possibly adjusting policy if inflationary pressures weaken, a shift from their previous stance wherein policymakers insisted that the economy would stay resilient.

Commodity Currencies (AUD, NZD, CAD)

The comdolls showed signs of weakness recently as risk appetite weakened in favor of the dollar and the yen. Earlier in today’s Asian trading session, New Zealand released a weaker than expected trade balance, reflecting a shortfall of 692 million NZD and an 11.3% monthly decline in exports. There are no reports lined up from the comdoll economies for the rest of today’s trading sessions, which could leave these higher-yielders sensitive to risk sentiment and commodity prices.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 27, 2014)

USD

The US dollar had a mixed performance as it extended its gains to the euro and the pound but retreated to the Canadian dollar. Data from the US economy was mostly stronger than expected, with only the core durable goods orders figure coming in short of expectations at a 0.8% decline instead of the estimated 0.5% uptick. Headline durable goods orders showed a 22.6% jump versus the estimated 7.8% gain while CB consumer confidence improved from 90.3 to 92.4. The Richmond manufacturing index climbed from 7 to 12, outpacing the consensus at 8. Only crude oil inventories data is due from the US economy today.

EUR

The euro broke below its consolidation to the dollar and traded much lower, even though there were no major reports released from the euro zone. For today, German GfK consumer climate data is due and the index could fall from 9.0 to 8.9, with a weaker than expected reading likely to push the euro lower. Also due today is the German import prices report, which could mark a 0.1% decline in prices.

GBP

After recently closing its weekend gap, the pound resumed its selloff to the dollar, as BBA mortgage approvals data came in below expectations. The report showed a drop from 43.2K to 42.8K instead of the projected improvement to 44.2K, indicating that the UK housing sector is in a slowdown. There are no reports due from the UK economy today.

CHF

The franc took its cue from the euro and weakened to the dollar once more, even though there were no reports released from Switzerland. For today, the UBS consumption indicator might have a say in franc movement, with the index expected to dip from the previous 2.06 reading.

JPY

The yen managed to keep its losses contained in recent trading, except against the commodity currencies. There were no reports released from Japan then and none are due today, leaving yen pairs at the mercy of market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a good run in recent trading, as risk sentiment made small improvements. Earlier today though, Australia’s construction work done came in below expectations at a decline of 1.2% versus the estimated 0.4% downtick. To top it off, the previous figure was downgraded to a 0.4% decline. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 28, 2014)

USD

The Greenback returned some of its recent forex wins since there were no major US reports to give it a boost yesterday. For today, US preliminary GDP and initial jobless claims are up for release. The GDP reading could be revised slightly lower from 4.0% to 3.9% in the second quarter of the year while the initial jobless claims report could show a 299K figure. Pending home sales data is also due and it might print a 0.6% rebound from the previous 1.1% decline.

EUR

The euro made a small recovery against some of its forex counterparts as traders took profits off their short positions ahead of today’s key events. Data from the euro zone was weaker than expected yesterday, as the German GfK consumer climate index slipped from 8.9 to 8.6 while the import prices report showed a 0.6% decline. For today, German preliminary CPI is due and it might show a flat reading. Also due today is the German unemployment change which could print smaller 6K decline in joblessness versus the previous 12K drop.

GBP

The pound was mostly stuck in consolidation as there were no reports to provide any clear direction, although the bias for GBPUSD remains to the downside. Only the CBI realized retail sales report is up for release from the UK economy today and it might print an improvement from 21 to 27. Stronger than expected data could lead to a sharp bounce but a disappointing reading might push pound pairs lower.

CHF

The franc made a bit of a recovery in yesterday’s trading sessions, despite the drop in Switzerland’s UBS consumption indicator from 2.07 to 1.66. Swiss employment level data is up for release today and it could show a gain from 4.17M to 4.21M, which might be positive for the franc. Apart from that, the Swiss currency could also be affected by euro movements after the top-tier data releases.

JPY

The yen had a mixed performance as it advanced to the European currencies but gave up some ground to the higher-yielding commodity currencies. The Nikkei managed to chalk up a small gain for the day, indicating that risk appetite was present during the Asian session. No reports were released from Japan then and none are due for today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a strong performance, particularly for the Loonie which advanced further to the US dollar. Australia’s construction work done for the second quarter saw a 1.2% decline while the previous quarter saw a downgrade to a 0.4% drop. Crude oil inventories showed falling stockpiles, which drove prices and the Loonie higher. Earlier today, Australia’s private capital expenditure report marked a 1.1% gain while HIA new home sales saw a 5.7% decline. Canadian current account balance is due later today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 29, 2014)

USD

The US dollar consolidated to most of its major forex counterparts recently, although it did enjoy a bit of support when the US GDP was upgraded from 4.0% to 4.2%. Initial jobless claims came in at 298K, closely in line with estimates and the previous figure.Pending home sales also came in better than expected at 3.3% versus the estimated 0.6% gain while the previous month’s reading suffered a downgrade. Personal spending and income data are due today, along with the Chicago PMI and revised consumer sentiment figure.

EUR

The euro managed to hold its ground despite weaker than expected data from Germany. The euro zone’s largest economy showed a 2K increase in unemployment and a flat CPI reading while Spain’s flash CPI showed a 0.5% decline. Euro zone CPI estimates are due today and weak readings might lead to more selling for euro pairs, as it would convince most traders that further easing from the ECB is needed.

GBP

The pound also consolidated to most of its rivals in recent trading, despite the strong bounce in medium-tier data. The CBI realized sales report jumped from 21 to 37, outpacing the consensus at 27. This suggests that local demand remains sustained and that the UK might be in for an economic pickup sooner or later. Nationwide HPI and preliminary business investment data are due today and it could provide more clues on how the economy is doing.

CHF

The franc drew a bit of support from Switzerland’s improved jobs data, with the employment level climbing from 4.17M to 4.20M in the previous quarter. However, bleak reports from the euro zone prevented the currency from extending its gains. For today, the KOF economic barometer is due and it might show a dip from 98.1 to 97.9, indicating a slight downturn. A stronger than expected reading, however, could keep the franc supported.

JPY

The yen suffered a wave of bleak reports in today’s Asian trading session, with household spending posting a whopping 5.9% decline and the jobless rate climbing from 3.7% to 3.8%. The preliminary industrial production report also fell short of consensus as it marked a 0.2% uptick instead of the projected 1.2% gain while the previous month’s report was downgraded. Retail sales was stronger than expected with a 0.5% gain though. Data on housing starts is due and another weak figure could push the yen lower.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were stuck in consolidation to the dollar recently as there were no major reports released. Australia’s private capital expenditure report showed a stronger than expected quarterly gain while Canada printed a bleak current account balance. New Zealand building consents marked a mere 0.1% uptick while business confidence declined. Later on, Canada will print its monthly GDP report and possibly print a 0.2% expansion.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 1, 2014)

USD

The US dollar regained ground on Friday, as traders booked profits at the end of the trading month and prior to the Labor Day holiday. Data from the US economy was mixed, with personal spending and income reports falling short of expectations and the Chicago PMI and revised UoM consumer sentiment printing better than expected results. US banks are on holiday today so volatility might be lower in the New York trading session.

EUR

The euro resumed its drop in the latest trading session, as traders started pricing in expectations for this week’s ECB rate statement. Apart from that, data from the euro zone has been mixed with the headline CPI flash estimate unchanged at 0.3% and the core estimate upgraded from 0.8% to 0.9%. German retail sales posted weaker than expected results, as it marked a 1.4% decline in spending. Italian and Spanish manufacturing PMI are up for release today, along with the final German GDP reading.

GBP

The pound continued to consolidate to the dollar last week, with a stronger than expected Nationwide HPI figure released on Friday. The report showed a 0.8% increase in house prices, stronger than the estimated 0.1% uptick and the previous 0.2% rise. UK manufacturing PMI is up for release today and a drop from 55.4 to 55.1 is eyed.

CHF

The franc returned its recent gains, despite stronger than expected data from Switzerland on Friday. The KOF economic barometer reading climbed from 97.9 to 99.5, although the previous reading was downgraded. SVME PMI is due from Switzerland today and it might show a dip from 54.3 to 53.8, with a weaker than expected reading likely to push the franc lower against its counterparts.

JPY

The yen gave up ground to its forex counterparts when traders started placing bets on BOJ easing for this week. Data from Japan has been mostly weaker than expected on Friday, with household spending, employment, and industrial production falling below consensus. Retail sales was better than expected at a 0.5% uptick instead of the projected 0.1% decline. CPI figures came right in line with expectations. Earlier today, Japanese capital spending data also came in below expectations.

Commodity Currencies (AUD, NZD, CAD)

The comdolls retreated to the dollar on Friday, as most traders booked profits off their long trades. ANZ business confidence in New Zealand marked a sharp decline while Australia’s private sector credit report missed the mark. Canadian GDP was much stronger than expected yet underlying inflation figures hinted at weaker price pressures later on. Chinese HSBC and official manufacturing PMI came in line with expectations earlier today and helped support the Aussie. No other reports are due from the comdoll economies for today, as Canadian banks are also closed for the holiday.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 2, 2014)

USD

The US dollar recovered to most of its major counterparts in recent trading sessions, despite the lack of top-tier data from the US economy yesterday. US banks were closed in celebration of Labor Day then, with economic data releases set to resume today. ISM manufacturing PMI is due and it might show a dip from 57.1 to 57.0, which would reflect a slight downturn in the industry expansion. Market participants are also likely to pay closer attention to the labor component as this might provide clues for the upcoming NFP release.

EUR

The euro resumed its selloff to its forex counterparts, as data from the euro zone came in weaker than expected. Spanish manufacturing PMI fell from 53.9 to 52.8, lower than the estimated 53.4 reading, while the Italian manufacturing PMI showed a contraction at a reading of 49.8. Spanish jobs data is up for release today and a 25.5K increase in joblessness is eyed. Weaker than expected results could lead to more euro weakness as traders price in expectations of a dovish ECB statement later in the week.

GBP

The pound edged slightly higher recently but was unable to hold on to its gains when the manufacturing PMI came in weaker than expected. The reading fell from a downgraded 54.8 to 52.5, indicating a slowdown in industry expansion. Construction PMI is due today and another decline might be seen, which could push the pound much lower ahead of this week’s BOE interest rate decision.

CHF

The franc resumed its recent decline to the dollar, as Switzerland’s SVME PMI fell short of consensus. The figure fell from 54.3 to 52.9, reflecting slower industry expansion. Swiss GDP is up for release today and a 0.5% growth figure is projected, with a lower than expected reading likely to push the franc much lower.

JPY

The yen lost ground in recent trading as traders continued to price in the odds of hearing downbeat remarks in the BOJ interest rate decision. Data from Japan kept disappointing market watchers, as the latest monetary base report turned out weaker than expected. Average cash earnings saw a 2.6% gain though, stronger than the projected 0.9% uptick while the previous reading enjoyed an upgrade.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the dollar but advanced against the yen recently. Data from Australia was weaker than expected yesterday, as company operating profits slipped by 6.9% in the previous quarter and commodity prices marked an 11.5% decline. Building approvals saw a 2.5% jump while the previous figure was revised to show a smaller decline. The RBA decided to keep rates on hold at 2.50% as expected and there are no other major reports lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 3, 2014)

USD

Data from the US economy came in mostly stronger than expected yesterday, although the dollar’s performance was mixed. The ISM manufacturing PMI showed a stronger than expected rise from 57.1 to 59.0, marking a faster pace of expansion in the industry instead of dipping to the estimated 57.0 reading. Construction spending also ticked higher by 1.8%, twice as much as the estimated 0.9% gain. Economic optimism and ISM manufacturing prices showed weaker than expected results though. For today, US factory orders, total vehicle sales, and the Fed Beige Book are up for release.

EUR

The euro made a small recovery to its counterparts as data came in slightly better than expected. The Spanish unemployment change report showed an 8.1K increase in joblessness, less than the estimated 25.5K rise. Euro zone PPI, however, marked a 0.1% decline and indicated that overall inflation might continue to weaken. Spanish and Italian services PMI are on tap for today and these might dictate euro direction prior to tomorrow’s ECB statement.

GBP

The pound suffered a sharp selloff as news of possible Scottish independence became a cause of concern. Data from the UK was actually better than expected, with the construction PMI climbing from 62.4 to 64.0. Services PMI is up for release today and a decline from 59.1 to 58.6 is expected, which might lead to more pound weakness.

CHF

The franc recovered to the dollar in recent trading, despite weaker than expected Swiss GDP. The country registered a flat growth figure for the second quarter of the year, prompting some to speculate about stimulus from the SNB. There are no reports due from Switzerland today, as the franc might take its cue from euro behavior.

JPY

The yen continued to give up ground to its counterparts as more and more traders are anticipating easing from the BOJ today. Data from Japan has been mostly weaker than expected, debunking beliefs that the economy could stay resilient and easily recover from the negative impact of the sales tax hike. Any form of easing from the BOJ could drive the yen lower than its counterparts while the lack of dovishness could lead to profit-taking among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened mostly to the dollar, spurred by a cautious RBA statement and a bleak dairy auction in New Zealand. Market participants are starting to price in another downgrade in Fonterra payouts, which might then weigh on the country’s overall economic performance down the line. Australia’s GDP came in stronger than expected at 0.5% versus the estimated 0.4% uptick though while Chinese services PMI reflected a pickup. The BOC is set to make its interest rate decision and no policy changes are expected.

By Kate Curtis from Trader's Way