Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (September 4, 2014)

USD

The US dollar edged slightly lower to its forex counterparts when the US economy printed a weaker than expected factory orders report. It showed a 10.5% gain versus the estimated 10.9% increase, although the previous month’s report was upgraded to show a 1.5% rise. Total vehicle sales was stronger than expected at 17.5M versus the projected 16.5M figure. Meanwhile, the Fed Beige Book revealed that most districts saw economic improvements in the past months. For today, Challenger job cuts and ADP non-farm employment change data are due and might provide clues on how the NFP release might turn out.

EUR

The euro recovered a bit to the dollar but edged lower to most of the higher-yielding currencies, as traders continued to price in expectations of easing or dovish remarks from ECB Governor Draghi in today’s rate statement. Data from the euro zone was mixed, with the Spanish services PMI coming in stronger than expected at 58.1 while the Italian services PMI and euro zone overall services PMI fell short of consensus. Euro zone retail sales also fell short as it printed a 0.4% decline instead of the estimated 0.3% dip. For today, the ECB statement should set the tone for euro price action both in the short-term and long-term.

GBP

The pound failed to bounce back despite stronger than expected services PMI from the UK. The report showed a climb from 59.1 to 60.5, reflecting a stronger expansion in the industry. The BOE rate decision is scheduled today and policymakers are not expected to announce any changes in interest rates or asset purchases. Any changes in the actual statement could provide clues on whether or not policymakers are becoming more optimistic about the economy, which might then dictate the pound’s direction.

CHF

The franc advanced to the dollar recently, despite the lack of data from Switzerland. There are still no reports due from the country today, which means that the franc might take its cue from euro price action or from market sentiment.

JPY

The yen had a mixed performance, as it gained ground to the pound but continued weakening against the commodity currencies. Traders are pricing in expectations of dovishness from the BOJ statement today, although profit-taking might take place before the actual event or if Kuroda doesn’t show any inclination to ease at all.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar was able to hold its ground in recent trading, as Australia reported a stronger than expected GDP reading of 0.5% versus the projected 0.4% expansion. The Loonie was also able to benefit when the BOC stuck to its neutral stance and kept monetary policy unchanged. As for the Kiwi, its gains were limited as the latest dairy auction in New Zealand turned out weaker than expected again.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 5, 2014)

USD

The Greenback cashed in plenty of gains to the euro and other currencies with dovish central banks, as risk aversion peeked back in the markets yesterday. Data from the US economy was mostly stronger than expected, adding to the appeal of the dollar. The trade balance showed a smaller than expected deficit while initial jobless claims came close to estimates at 302K. Revised non-farm productivity and the ISM non-manufacturing PMI both came in stronger than expected. For today, the NFP could be crucial in setting the tone for dollar behavior, as market analysts expect to see a 226K gain in hiring versus the previous 209K figure.

EUR

The euro suffered a bloodbath in yesterday’s trading when the ECB decided to cut several interest rates again and announce their plans for purchases of asset-backed securities. The central bank pushed deposit rates deeper into the negative territory, an unprecedented move for a major central bank. Draghi mentioned that the decision was not unanimous, with some policymakers lobbying for more aggressive stimulus efforts. German industrial production and euro zone revised GDP data are due today and might not have much of an impact on the euro’s selloff.

GBP

The pound was also heavily sold off as risk aversion kicked in after the ECB easing announcement. It didn’t help that the looming possibility of Scottish independence could hurt the U.K. economy with instability and higher debt burden later on. As for the BOE, they decided to keep monetary policy unchanged for the time being. Only the consumer inflation expectations report is due today and it might not have a strong impact on pound movement.

CHF

The franc also sold off to its counterparts after the ECB decided to ease, as the possibility of currency intervention from the SNB dawned on traders. EUR/CHF has tumbled to the 1.2050 area, dangerously close to the SNB floor. Data on foreign currency reserves is due today and this might provide an idea of whether or not the Swiss central bank has room to intervene.

JPY

The yen was weaker to most of its counterparts, except for the euro and the pound, as traders also anticipated more easing from the BOJ to take place sooner or later. Their actual monetary policy statement contained no changes, although Kuroda acknowledged some signs of weakness in the economy. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls sold off to the dollar but were able to advance to the euro in recent trading, as data from Australia was mostly stronger than expected. The trade balance noted a smaller deficit while retail sales came in line with expectations of a 0.4% uptick. In Canada, the employment report is due along with the Ivey PMI, which might climb from 54.1 to 55.7.s

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 8, 2014)

USD

The US dollar had trouble sustaining its climb on Friday when the US NFP report came in weaker than expected. The economy added only 142K jobs in August versus the estimated 226K in hiring gains. Meanwhile, the jobless rate still managed to improve from 6.2% to 6.1% while average hourly earnings saw a 0.2% uptick as expected. There are no major reports due from the US economy for today, which suggests that market sentiment might continue to push dollar pairs around.

EUR

The euro edged lower to most of its major counterparts towards the end of the trading week, as traders adjusted positions to the ECB easing announcements. German industrial production was stronger than expected at a 1.9% gain versus the projected 0.5% uptick but the euro was barely able to gain from this release. German trade balance and euro zone Sentix investor confidence data is due today and more signs of weakness might drive the euro lower.

GBP

The pound had a sharp gap lower against its counterparts in the start of this week’s trading as the possibility of Scottish independence spelled downbeat prospects for the UK economy. Consumer inflation expectations saw an improvement from 2.6% to 2.8% but did very little to support the pound. UK Halifax HPI is due today and it might print a 0.2% uptick.

CHF

The franc lost a lot of ground recently as traders speculated about a potential currency intervention from the SNB, now that EURCHF is edging closer to its 1.2000 floor. Swiss CPI, retail sales, and jobless rate are all due today and weak data might push the franc lower. The CPI might show a 0.1% decline in prices while retail sales could improve from 3.4% to 3.7%. The jobless rate is slated to stay unchanged at 3.2% for the time being.

JPY

Yen pairs gapped down over the weekend but most gaps have been filled except for GBPJPY. Japanese current account was weaker than expected but the final GDP was unchanged at -1.8% as expected. Japan’s Economy Watchers sentiment report is due today and a downturn in confidence might be negative for the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to extend their gains recently as most traders booked profits off their trades. New Zealand quarterly manufacturing sales slipped by 1.9% for the previous quarter, following a flat reading. Chinese trade balance was stronger than expected, giving the Aussie a bit of a boost. Meanwhile, the weaker than expected Canadian jobs release and Ivey PMI are currently weighing on the Loonie. Hiring fell by 11K instead of increasing by the estimated 10.3K while the manufacturing PMI slipped from 54.1 to 50.9. Canadian building permits is due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 9, 2014)

USD

The US dollar continued to advance against its forex counterparts as risk aversion hit the markets and favored the lower-yielding Greenback. There were no major reports released from the US yesterday, with only the consumer credit report on tap and indicating a stronger than expected figure. For today, wholesale inventories and crude oil inventories are up for release, both of which aren’t likely to have a strong effect on the dollar.

EUR

The euro recovered against some of its currency rivals and consolidated against others. Against the dollar, the shared currency suffered massive losses once more, despite stronger than expected German trade balance. The report showed a 22.2 billion EUR surplus versus the estimated 17.3 billion EUR figure and the previous 16.4 billion EUR. However, the new set of Russian sanctions threatened to push growth for the region lower and drove the euro down. Sentix investor confidence slipped to negative territory with a -9.8 reading, indicating pessimism.

GBP

The pound continued to fall against the dollar but managed to recover against other currencies. Halifax HPI showed a mere 0.1% uptick instead of the projected 0.2% gain and another set of polls emphasized the possibility of Scottish independence, which might lead to political and economic uncertainty for the UK. UK manufacturing production and trade balance data are due today, but the bigger market-mover might be BOE Governor Carney’s speech.

CHF

The franc resumed its decline to the dollar yesterday, as Swiss data came in mixed. The jobless rate held steady at 3.2% as expected while the CPI showed a flat reading instead of the projected 0.1% decline. Retail sales was much weaker than expected at -0.6% instead of the projected 3.7% gain. There are no reports up for release from Switzerland today.

JPY

The yen gave up more ground to the dollar and most of its major counterparts recently, as data from Japan continued to disappoint. Trade balance and the Economy Watchers sentiment index both came in below expectations while the tertiary industry activity index released today showed a flat reading instead of the projected 0.3% gain. Consumer confidence and preliminary machine tool orders data are due today, along with the BOJ monetary policy minutes.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar chalked up losses to its counterparts when China’s trade balance indicated a massive decline in imports, posing negative prospects for Australia’s trade industry. Building permits in Canada surged by 11.5% but it wasn’t enough to keep the Loonie afloat against the dollar. Australia NAB business confidence dipped from 10 to 8 while home loans showed a weaker than expected increase, adding more weight to the Aussie in today’s trading. Canadian housing starts data is due in the US session..

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 10, 2014)

USD

The US dollar returned some of its recent gains to the euro but continued to advance against the pound, yen, and commodity currencies. There have been no major reports from the US, allowing traders to take profits off their recent euro shorts and trade mostly based on risk sentiment. For today, wholesale inventories and crude oil inventories are due from the US, both of which aren’t likely to have a material impact on price action once more. Bear in mind though that US President Obama is scheduled to announce the US government’s plan on ISIS and might lead to volatility during the US session.

EUR

The euro recovered off its recent lows to most of its major counterparts, as traders booked profits from their short positions. Data from the euro zone has been weaker than expected, as France reported a wider trade deficit of 5.5 billion EUR. French non-farm payrolls and industrial production data are due today, along with the German 10-year bond auction. Weak data could push the euro lower again, as traders seek to enter short positions on better prices.

GBP

The pound continued to sell off to the dollar but was able to bounce back against some of its forex counterparts when BOE Governor Carney announced that they might hike rates by spring next year. However, the reaction has been limited since traders are starting to doubt that the UK economy can recover by then. UK trade balance was weaker than expected with a wider deficit of 10.2 billion GBP. Today has the BOE inflation report hearings on tap and more hawkish remarks could add support to the pound.

CHF

The franc bounced back to action in recent trading, despite the lack of top-tier data from Switzerland. Traders are still expecting the SNB to take action as EURCHF approaches its floor but the lack of resolve has allowed some to take profits of their short franc positions. There are no reports due from Switzerland today, leaving the franc sensitive to euro movements and risk sentiment.

JPY

The yen had a mixed performance as it acted more as a counter currency in recent trading. Data from Japan has still been weak, with core machinery orders showing a weaker than expected 3.5% gain versus the estimated 4.1% rise and PPI hinting at a slowdown in price pressures. Tertiary industry activity had a flat reading, prompting many to speculate about further BOJ easing. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to the dollar when risk sentiment weighed on the markets and data from Australia and Canada disappointed. NAB business confidence in Australia slipped from 10 to 8 while home loans showed a weaker than expected 0.3% uptick. In Canada, housing starts fell from 200K to 192K. The RBNZ is set to make its monetary policy statement in the upcoming Asian trading session and might lead to Kiwi weakness if the bias turns dovish.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 11, 2014)

USD

The US dollar returned some of its recent gains to its counterparts, as traders booked some profits off their positions. There were no major reports released from the US, as the medium-tier data such as wholesale inventories and crude oil inventories came in mostly in line with expectations. Initial jobless claims is due today and it might show a 306K reading, higher than the previous 302K figure. Stronger than expected data could lend more support for the dollar while weak results could keep gains in check.

EUR

The euro struggled to hold on to its recent gains but its rallies appeared to be losing steam against its counterparts. Medium-tier data from the euro zone came in line with expectations, as the French non-farm payrolls report showed a 0.1% quarterly uptick while the industrial production report showed a 0.2% gain. German and French CPI figures are due today, along with the ECB monthly bulletin. Weak inflation readings might lead to more euro selling while strong data could keep it supported.

GBP

The pound continued to get weighed down by increasing prospects of Scotland’s independence, although it did manage to recover when Carney spoke of possibly hiking interest rates by spring next year. Earlier today, RICS house price balance showed a weaker than expected 40% reading versus the estimated 47% figure while the previous month’s report was downgraded to show a 48% figure. There are no other reports due from the UK today, which might leave Scottish polls as a main driver of pound price action.

CHF

The franc made a strong bounce to the euro as speculations of SNB intervention or easing grew. An SNB official was quoted saying that negative rates is also a possibility for the Swiss central bank. There are no reports due from Switzerland today, as the increasing likelihood of easing from the SNB could keep the franc weak.

JPY

The yen continued to give up ground to most of its counterparts, even as data from Japan came in strong today. The BSI manufacturing index climbed from -13.9 to 12.7, indicating a return to expansion. There are no reports due from Japan today, leaving the yen vulnerable to risk sentiment and speculations of BOJ easing.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up further ground in recent trading, as the prospect of geopolitical tension and weaker economic growth weighed on sentiment. Earlier today, Australia reported a better than expected employment report, which showed a 121K increase in hiring for August versus the estimated 10.3K increase. Meanwhile, the RBNZ decided to keep rates on hold at 3.50% as expected while trying to talk down the overvalued Kiwi. Chinese CPI was weaker than expected at 2.0% versus the estimated 2.2% figure and the previous 2.3% gain.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 12, 2014)

USD

The US dollar had a mixed performance, as it managed to extend its wins to the Japanese yen but gave up ground to the pound then consolidated to the euro. Data from the US economy was weaker than expected, as initial jobless claims showed a 315K reading, higher than the estimated 306K figure. For today, retail sales reports are due, with the headline figure slated to show a 0.3% gain and the core figure likely to print a 0.2% uptick. Stronger than expected data could be positive for the US dollar, along with positive consumer sentiment reports.

EUR

The euro consolidated against the dollar in recent trading, as there have been no surprises from the euro zone economy recently. German CPI stayed flat as expected while French CPI also came in line with estimates of a 0.4% uptick. Euro zone industrial production and employment change data are due today and another round of weaker than expected figures might lead to more selling for euro pairs.

GBP

The pound managed to erase some of its recent losses as concerns of Scottish independence appeared to fade. There were no reports released from the UK economy yesterday while today has the construction output and leading index due. For now, early polls on Scottish independence might play a major role in pound price action, with growing margins in favor of independence likely to result in pound selling.

CHF

The pound recovered some of its losses in the latest trading sessions, as concerns of potential SNB intervention eased. There are no reports due from Switzerland today so franc movement might hinge on euro zone events or market sentiment.

JPY

The yen lost further ground to the dollar but was able to bounce back against some of its higher-yielding counterparts, except for the pound. Data from Japan has surprised to the upside, with the BSI manufacturing index landing back in positive territory and reflecting expansion. For today, revised industrial production data and BOJ Governor Kuroda’s speech are lined up.

Commodity Currencies (AUD, NZD, CAD)

Comdolls continued to weaken as Chinese CPI figures disappointed, with the headline figure falling from 2.3% to 2.0% and producer prices hinting at a deeper slowdown in inflation. Not even the strong Australian jobs report was able to shore up the Aussie, as components revealed that the gains were spurred mostly by part-time hiring. In Canada, NHPI was flat instead of marking a 0.2% gain. Chinese money supply data was weaker than expected, putting more weight on commodity currencies once more. Chinese industrial production and fixed asset investment data are due over the weekend.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 15, 2014)

USD

The US dollar regained ground to most of its major counterparts, as traders started positioning ahead of this week’s FOMC statement. Data from the US economy came in stronger than expected, with headline retail sales marking a 0.6% gain and the core version of the report showing a 0.3% increase. This was stronger than the estimated 0.3% uptick and 0.2% rise respectively while the previous month’s figures were upgraded. Preliminary UoM consumer sentiment was also stronger than expected, as the index climbed from 82.5 to 84.6 and reflected increased optimism. Empire State manufacturing index and industrial production data are due today.

EUR

The euro struggled to hold steady around 1.2950 against the dollar last week, as the shared currency got a bit of support from stronger than expected industrial production and employment change figures. Industrial production marked a 1.0% gain versus the estimated 0.6% uptick while employment change showed a 0.2% increase for the previous quarter, higher than the projected 0.1% rise. Euro zone trade balance is due today and a higher trade surplus is eyed.

GBP

The pound continued to weaken against the dollar but managed to hold on to its current levels against the yen on Friday, as UK construction output stayed flat. Profit-taking may have played a huge role in price action, as traders closed positions ahead of this week’s top-tier UK events. There are no major ones lined up for today but tomorrow has the UK CPI while Wednesday has the BOE minutes and UK jobs figures on tap. Thursday will have the Scottish referendum and UK retail sales release. Earlier today, the Rightmove HPI marked a 0.9% rebound for September.

CHF

The franc had been moving uneasily as traders are anticipating intervention from the SNB this week. The currency lost further ground to the euro then recovered slightly to the dollar last week. Swiss PPI is due today and a 0.2% uptick is eyed to follow the previous flat reading, with a weaker than expected result likely to weigh on the franc.

JPY

The yen continued to weaken to the dollar and its major counterparts as the Japanese economy showed further signs of weakness. There are no reports lined up today as Japanese banks are on holiday, leaving yen pairs at the mercy of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot last Friday and most gapped down over the weekend, as Chinese data came in mostly weaker than expected over the weekend. Industrial production in China is up by 6.9% instead of the estimated 8.8% increase while fixed asset investment marked a mere 16.5% gain instead of the projected 16.9% increase. Retail sales was also slightly weaker than expected. Earlier today, Australia reported a 1.8% decline in new motor vehicle sales.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 16, 2014)

USD

The US dollar returned some of its recent wins, as traders continued to reduce their dollar exposure ahead of this week’s FOMC statement. Data from the US came in mixed, with the Empire State manufacturing index showing a stronger than expected jump from 14.7 to 27.5 and the industrial production report printing a 0.1% decline. US PPI and TIC long-term purchases are due today, both of which aren’t likely to spur huge dollar moves unless the figures come in way above or below expectations. Both core and headline PPI are slated to print 0.1% gains.

EUR

The euro struggled to hold on to its current levels, as traders are anticipating weak demand for the ECB’s TLTRO this week. Euro zone trade balance came in weaker than expected, showing a smaller trade surplus of 12.2 billion EUR from the previous 13.8 billion EUR and the estimated 15.9 billion EUR. German and euro zone ZEW economic sentiment data are due today and more declines are expected, with the German ZEW projected to dip from 8.6 to 5.2 and the region’s ZEW likely to fall from 23.7 to 21.3.

GBP

The pound held steady against most of its major counterparts, waiting for the top-tier events in the UK this week. For today, the CPI figures are due and another decline in the headline inflation report is expected while the core figure could hold steady at 1.8%. Underlying inflation figures, such as the PPI and HPI, might also have an impact on pound movement as negative readings could increase the downward pressure on the currency.

CHF

The franc is trading uneasily ahead of the SNB decision this week, with some traders expecting to see negative deposit rates or intervention from the Swiss central bank. Bear in mind that EUR/CHF is trading dangerously close to the SNB floor at 1.2000 and jawboning could provide support for the pair. Swiss PPI was weaker than expected as it showed a 0.2% decline, reminding market participants that deflation is also a threat in Switzerland. There are no economic reports due from the country today.

JPY

The yen recovered some of its recent losses, particularly against the dollar and the Aussie. There were no reports released from Japan yesterday as banks were closed on holiday while today has BOJ Governor Kuroda’s speech on tap. He isn’t likely to drop any huge hints on potential easing, as the central bank head has insisted that the economy could stay resilient.

Commodity Currencies (AUD, NZD, CAD)

After gapping down over the weekend, AUDUSD enjoyed a bit of support as it climbed back above the .9000 handle. Chinese foreign direct investment marked a 1.8% decline, another point against the Australian dollar. Minutes of the RBA meeting showed that policymakers are getting more concerned about rising house prices in the country and that the central bank has no plans of cutting rates. Later on, Canadian manufacturing sales data is due and might show a stronger 1.1% gain compared to the previous 0.6% uptick. BOC Governor Poloz also has a speech scheduled during the US session.

By Kate Curtis from Trader’s Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 17, 2014)

USD

The US dollar was unable to advance against most of its forex counterparts in yesterday’s trading sessions, as traders eased off their long positions ahead of today’s FOMC statement. While the Fed is expected to carry on with its taper of $10 billion and acknowledge the recent improvements in the economy, Chairperson Yellen might adopt a cautious stance in reiterating that rates will not be hiked until the recovery is sustained. Data from the US economy was weak yesterday, with the headline PPI staying flat instead of posting the estimated 0.1% gain and TIC long-term purchases posting a surprise negative reading.

EUR

The euro edged slightly higher to the dollar but was unable to break past the 1.3000 handle, as sentiment for the shared currency remained mostly bearish. German ZEW economic sentiment came in stronger than expected at 6.9, but this still marks a considerable decline from the previous 8.6 reading. Meanwhile, the euro zone ZEW slipped from 23.7 to 14.2, worse than the estimated 21.3 figure. Euro zone final CPI readings are due today and no changes are expected.

GBP

The pound had a volatile day as it broke below 1.6200 to the dollar only to recover to 1.6300 later on. CPI readings came in mostly in line with expectations, as the headline figure fell from 1.6% to 1.5% while the core figure improved to 1.9%. PPI input prices marked a 0.6% decline while the retail price index showed a weaker than expected 2.4% reading, suggesting that price pressures are still weak in the country. BOE minutes and the UK jobs release could add volatility to pound movement today, with an expected 2-7 vote to hike rates and a potential 29.7K drop in joblessness.

CHF

The franc continued to move carefully against its counterparts as traders start to price in potential easing or intervention from the SNB tomorrow. There have been no reports released from Switzerland yesterday, but SNB officials have been hinting at the possibility of negative deposit rates.

JPY

The yen was back in its weak state yesterday, as it sold off to most of its major counterparts except for the US dollar. BOJ Governor Kuroda refrained from announcing big policy changes, as he stressed that the economy could recover and that no easing measures are needed for now. There are no reports due from Japan today, which leaves yen pairs sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls recovered slightly in recent trading, with AUDUSD and AUDJPY edging higher. The RBA minutes stressed that policymakers are not looking to cut rates soon as they are getting concerned about stronger house price inflation. In Canada, manufacturing sales came in better than expected at a 2.5% increase and an upward revision in the previous figure. New Zealand’s current account balance came in as expected at a deficit of 1.07 billion NZD, lower than the previous 1.47 billion NZD shortfall. The country will release its quarterly GDP report in the next Asian trading session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 18, 2014)

USD

The US dollar got a strong boost from the FOMC statement, as the Fed shared some details on their exit strategy plans. As expected, the US central bank pushed through with its $10 billion monthly reduction in asset purchases and is likely to end easing in October with a $15 billion taper. However, interest rates might still stay low for a “considerable time” after easing ends, as Yellen mentioned that the labor market has yet to fully recover and that inflation is still below target. Growth downgrades for 2015 were also seen yet dollar traders were more focused on the fact that the Fed is preparing to tighten policy. US building permits and initial jobless claims are due today while Yellen is set to give another testimony.

EUR

The euro resumed its selloff to the dollar but advanced to the yen, as traders saw a stronger than expected headline CPI from the euro zone. The figure was upgraded from 0.3% to 0.4%, easing some deflationary concerns. The ECB’s targeted LTRO is set to start today and might draw enough demand, which might then keep the euro afloat.

GBP

The pound drew support from upbeat UK jobs figures, with the claimant count change showing a 37.2K drop in joblessness and the unemployment rate improving from 6.4% to 6.2%. Wage growth was also seen, as average hourly earnings marked a 0.6% gain while the previous month’s report was upgraded to show a smaller 0.1% dip. Meanwhile, the BOE minutes revealed that a couple of policymakers still voted to hike rates. The Scottish referendum could be the main event risk for the pound today, even as the UK gears up to print its August retail sales report.

CHF

The franc was still in a weak spot to most of its counterparts, as traders are starting to speculate on further easing from the SNB. Negative deposit rates have been suggested while the prospect of central bank intervention is also on the table. This might lead to a surge in volatility among franc pairs, especially if the SNB does take action.

JPY

The yen gave up more ground to its forex rivals, with traders moving more of their funds to the US dollar instead. USDJPY jumped past the 108.50 barrier to highs not seen in the past six years, indicating that a stronger rally might be seen. Data from Japan was better than expected today, as the trade balance marked a 0.92 trillion JPY deficit, smaller than the previous 1.02 trillion JPY shortfall and the projected 0.99 trillion JPY deficit.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to the dollar, with AUD/USD dipping back below the .9000 mark and NZD/USD testing the .8100 mark. New Zealand GDP was actually stronger than expected at 0.7% versus the estimated 0.6% growth figure, still lower than the previous 1.0% GDP reading. There are no major reports due from the comdoll economies today, with only medium-tier data such as foreign securities purchases up for release from Canada.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 19, 2014)

USD

The US dollar recovered ground against most of its major counterparts, despite mixed data from the US economy. The Greenback was able to advance to the commodity currencies and the yen, while giving up some ground to the euro and the pound. Initial jobless claims came in at 280K, lower than the estimated 312K figure. However, building permits and housing starts both fell short of estimates while the Philly Fed index slipped from 28.0 to 22.5. There are no reports due from the US economy today, which suggests that risk sentiment and profit-taking ahead of the G20 Summit this weekend might be seen.

EUR

The euro rallied to the yen but lost ground to most of its major forex rivals, as the ECB’s targeted long-term refinancing operations began. There were no reports released from the euro zone then while today has only a couple of medium-tier releases on tap, namely the German PPI and current account. Weak data could keep euro gains in check while strong figures could allow it to stay afloat.

GBP

The pound was able to strengthen against its counterparts as exit polls of the Scottish referendum indicated a margin in favor of the “No” votes. This suggests a good chance that Scotland will stay in the UK and that political and economic uncertainty might be avoided. The official results won’t be released until the end of the trading week, which suggests that exit polls might still continue to drive pound movement until then. UK retail sales came in line with estimates of a 0.4% uptick. There are no reports due from the UK today.

CHF

The franc rallied after the SNB decided against implementing negative deposit rates or announcing intervention measures for now. While the SNB did have a strong resolve to defend the EURCHF floor and to ward off deflation, their lack of action was seen as a reason to close short franc trades for the time being. There are no reports lined up from Switzerland today.

JPY

The yen continued to give up ground to most of its counterparts, taking USDJPY to new highs not seen since 2002. Officials have been giving cautious assessments of the Japanese economy, citing that yen weakness might actually help spur inflation and growth. Japan’s all industries activity index is due today and a weak reading below 0.4% might lead to more yen losses.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost further ground to the dollar but managed to score some wins against the yen. New Zealand visitor arrivals slipped by 3.0% recently while credit card spending slipped from 4.5% to 4.2%. Canadian CPI and wholesale sales are due today and might spur more volatility for the Canadian dollar.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 22, 2014)

USD

The Greenback resumed its rally against most of its major counterparts on Friday, despite the lack of top-tier data from the US economy. For today, only the existing home sales report is up for release and it might show a climb from 5.15M to 5.21M, which might allow the dollar to extend its gains. Also for today, FOMC member Dudley is set to give a testimony and his monetary policy bias could also affect dollar movement.

EUR

The euro dropped to the dollar once more, as the weak demand for the ECB’s targeted long-term refinancing operations weighed on the shared currency. German PPI came in line with expectations of a 0.1% decline while the euro zone current account balance showed a better than expected result. The German central bank monthly report is due today, along with a speech by ECB Governor Draghi. Dovish remarks could lead to more losses for the euro.

GBP

The pound gave up some ground on Friday, as traders booked profits off their long positions after the Scottish referendum. There have been no reports released from the UK then and there are none due today, which might keep pound pairs in consolidation for the time being.

CHF

The franc resumed its decline in recent trading, although it did manage to hold on to its recent levels to the euro. There have been no reports released from Switzerland then and none are due today, which could leave the franc sensitive to risk sentiment.

JPY

The yen made a bit of a recovery on Friday, thanks to profit-taking. The all industries activity index showed a 0.2% decline instead of the projected 0.4% uptick, confirming speculations that the Japanese economy still hasn’t recovered. There are no reports lined up from Japan today, leaving the yen at the mercy of market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi resumed their weak bout to the dollar on Friday, with the Loonie managing to advance on the heels of better than expected Canadian CPI. The core version of the report showed a 0.5% gain while the headline figure stayed flat instead of posting the projected 0.1% decline. This was enough for traders to ignore the weaker than expected Canadian wholesale sales report. For today, there are no reports due from the comdoll economies.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 23, 2014)

USD

The Greenback dominated against most of its major forex counterparts, as it advanced to the comdolls but consolidated to the yen. Data from the US was weaker than expected yesterday as existing home sales fell short of expectations with its 5.05M reading instead of the projected climb from 5.14M to 5.21M. Only a few medium-tier reports are due from the US today, namely the flash manufacturing PMI and the Richmond manufacturing index. However, some FOMC members are set to testify and their remarks could contain clues on their policy biases.

EUR

The euro was still in a weak spot yesterday, following the weak take-up of the ECB’s targeted long-term refinancing operations. Consumer confidence fell recently, as the euro zone index slipped from -10 to -11. Draghi hinted that more ECB action is possible if the economy fails to take advantage of the recent easing moves. For today, German and French manufacturing and services PMIs are due and weak readings might inspire more losses for the euro.

GBP

The pound struggled to recover in recent trading as it edged gradually higher to the dollar and consolidated to the yen. There were no reports released from the UK yesterday while today has only the BBA mortgage approvals report on tap. A small increase from 42.8K to 42.9K is eyed but a stronger than expected result might lead to more gains for the pound.

CHF

The franc gave up some ground to the dollar and euro recently, despite the lack of data or events in Switzerland. There are still no reports due form the country today but the increasing likelihood of more ECB easing could continue to weigh on the franc as traders also anticipate action from the SNB.

JPY

The yen continued to recover against most of its forex counterparts while consolidating to the dollar yesterday. There have been no reports released from Japan then while banks are on holiday today, leaving yen pairs at the mercy of market risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

Thecomdoll gang was still doing poorly recently, despite the lack of reports from Australia, New Zealand and Canada. For today, Canada has the retail sales figures due, with the headline report likely to print a mere 0.4% uptick and the core version to show a 0.1% decline. Chinese HSBC flash manufacturing PMI came in better than expected at 50.5, up from the previous 50.2 reading, indicating a potential industry rebound and positive prospects for the Australian dollar.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 24, 2014)

USD

The US dollar regained ground against most of its major counterparts, although it did have trouble extending its wins to the Japanese yen. Risk aversion from geopolitical tension appear to be favoring the lower-yielding dollar for now, as the US and its partner nations just recently launched another round of airstrikes against ISIS in Syria. Data from the US was strong, as the flash manufacturing PMI held steady at 57.9 while the Richmond manufacturing index improved from 12 to 14 instead of dipping to 10. US new home sales and crude oil inventories data are due today.

EUR

The euro struggled to hold ground in recent trading but ended up weaker to the yen and the dollar. Data from the euro zone was mixed, although most German and French PMIs came in the red. Only the French manufacturing PMI and German services PMI surprised to the upside while the rest of the figures, including the euro zone overall readings, came in the red. German IFO business climate data is due today and the index could fall from 106.3 to 105.9.

GBP

The pound tried to advance in recent trading even though UK data came in weaker than expected. BBA mortgage approvals fell from 42.7K to 41.6K while public sector net borrowing increased to 10.9K. For today, there are no major reports due from the UK, which suggests that the pound could be influenced mostly by risk sentiment.

CHF

The franc had a volatile trading day although there were no reports released from Switzerland. Weaker than expected euro zone PMI also weighed on the franc, as this increased the odds of further easing from the ECB and the potential for intervention from the SNB. The Swiss UBS consumption indicator is due today, along with the SNB quarterly bulletin.

JPY

The yen had a mixed performance as it held steady to the dollar but gained ground to the euro and some of the commodity currencies. There were no reports released from Japan then and none are due today, leaving the yen functioning mostly as a counter currency.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar got a bit of a boost from better than expected Chinese HSBC flash manufacturing PMI, as the index improved from 50.2 to 50.5 instead of falling to 50.0. However, Canada’s retail sales report fell short of expectations, as the headline figure marked a 0.1% decline while the core version of the report showed a 0.6% drop. New Zealand trade balance came in better than expected, with a smaller deficit of 472 million NZD versus the previous 724 million NZD and the estimated 1125 million NZD deficit. There are no major reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 25, 2014)

USD

The US dollar regained ground to most of its counterparts as risk aversion continued to dominate financial trading. Data from the US was stronger than expected as new home sales climbed from an upgraded 427K to 504K, outpacing the consensus at 432K. For today, durable goods orders data are due and the headline figure is slated to print a 17.7% drop while the core figure might show a 0.7% rebound. Weaker than expected data could force the Greenback to retreat while strong figures could lead to more gains.

EUR

The euro struggled to hold steady recently despite weak data from Germany. The latest IFO business climate reading slipped to a 17-year low at 104.7, down from the previous 106.3 reading and lower than the estimated 105.9 figure. This indicates that businesses are not very hopeful about economic prospects in the euro zone’s largest economy. Euro zone money supply and private loans data are due today but these might not have much of an impact on price action.

GBP

The pound tried to advance against most of its forexrivals as there were no reports released from the UK. Today has the CBI realized sales report due and a drop from 37 to 34 is expected. However, a stronger than expected reading might lead to more gains for the pound. Also lined up for today is a speech by BOE Governor Carney, with upbeat remarks likely to give the pound a stronger boost.

CHF

The franc gave up ground to the dollar in recent trading as the UBS consumption indicator posted another decline. The index fell from 1.67 to 1.35, indicating weakening consumption. For today, there are no reports lined up from Switzerland, which could leave the franc at the mercy of risk sentiment.

JPY

The yen managed to hold steady to the pound but advanced to most of its counterparts, including the euro and the commodity currencies. Japanese flash manufacturing PMI slipped from 52.2 to 51.7 in September, reflecting a slower expansion in the industry. For today, the services producer price index marked a weaker than expected reading. Inflation reports from Japan are due in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered a wave of selling earlier today, as RBNZ Governor Wheeler spoke of the unsustainable trading levels of the Kiwi. He said he is open to exchange rates, leading to speculations of intervention. There are no other reports due from the comdoll economies today, although the recent news of a potential change in PBoC leadership is keeping uncertainty in the markets.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 26, 2014)

USD

The US dollar had another mixed performance, as it gave up ground to the euro and yen but rallied to the commodity currencies. Data from the US was mostly in line with expectations, as the core durable goods orders report showed a 0.7% gain while the initial jobless claims came in at 293K. However, the headline durable goods orders figure fell short of consensus as it marked an 18.2% drop versus the estimated 17.7% decline. For today, US final GDP data could determine Greenback price action, as the figure could be upgraded from 4.2% to 4.6%.

EUR

The euro struggled to recoup its recent losses to the dollar but wound up weaker to the pound and most of its other forex counterparts. Medium-tier data from the euro zone came in line with expectations while the Italian retail sales report showed disappointing results. German GfK consumer climate data is due today and a drop from 8.6 to 8.5 is expected. Weaker than expected figures could lead to more losses for the euro.

GBP

The pound tried to head higher in recent trading, despite the sharper than expected decline in CBI realized sales. The reading slipped from 37 to 31, lower than the estimated 34 figure. There are no reports due from the UK today so the pound might move to the tune of risk sentiment.

CHF

The franc lost ground to the dollar but continued to move sideways to the euro, as there were no major reports released from Switzerland yesterday. There are still no event risks lined up for today, which means that the franc could just take its cue from the euro or market sentiment.

JPY

The yen suffered another round of selling in today’s Asian session as the Japanese inflation readings fell short of expectations. Core CPI in Tokyo fell from 2.7% to 2.6% instead of holding steady while the national core CPI dipped from 3.3% to 3.1%, lower than the estimated drop to 3.2%. Without the effect of the sales tax hike, core inflation is just at 1.1%, which is just over half the central bank’s 2% target. There are no other reports due from Japan today but the weak inflation readings could boost calls for more easing, which might weigh on the yen for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to their counterparts, mostly due to RBNZ Wheeler’s remarks favoring a weaker Kiwi. He said that he welcomes a move to more sustainable exchange rate, which might see NZDUSD at .7500 eventually. RBA Governor Stevens expressed concerns about housing sector investment, which also led to a bit of Aussie weakness.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 29, 2014)

USD

The US dollar continued to advance against most of its major counterparts, as data from the US economy came in line with expectations. The final GDP reading was revised from 4.2% to 4.6%, reflecting stronger growth in the previous quarter. Consumer sentiment and inflation expectations from the University of Michigan were unchanged. Core PCE price index and data on personal spending and income are up for release today, with improvements likely to push the dollar higher.

EUR

The euro edged lower on Friday, as the German GfK consumer climate index slipped from 8.6 to 8.3, lower than the estimate at 8.5. German import prices saw a 0.1% decline, lower than the projected 0.2% drop. German and Spanish preliminary CPI figures are due today and these could set the tone for the euro zone flash CPI estimates due later this week.

GBP

The pound continued to decline against most of its counterparts on Friday, as there were no reports to give it a boost. For today, UK mortgage approvals and net lending to individuals data is due and strong figures could push the pound higher. Apart from these medium-tier data, the pound might simply rely on market sentiment for price direction.

CHF

The franc gave up ground to the dollar but continued to consolidate to the euro, as there were no reports out from Switzerland then. For now, the prospect of currency intervention from the SNB is keeping EURCHF afloat but speculations of further ECB easing could provide more volatility for the pair.

JPY

The yen weakened to the dollar as Japan released another round of bleak inflation figures last Friday. The national core CPI fell from 3.3% to 3.1% while the Tokyo core CPI dipped from 2.7% to 2.6%. More data from Japan are up for release this week and this could determine whether the economy is really recovering from the sales tax hike or not.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up more ground to the dollar on Friday, led mostly by losses for the Kiwi. Earlier today, data from the RBNZ foreign currency holdings indicated that the central bank intervened in August. Prime Minister John Key even mentioned that he’d like to see NZDUSD trade around .6500. There are no other reports due from the comdoll economies today, which suggests that their currencies could move to the tune of risk sentiment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 30, 2014)

USD

The US dollar seemed to have trouble extending its gains in the latter trading sessions, as traders started to book profits off their long positions at the end of this month and quarter. Data from the US has been mostly in line with expectations, as the personal spending and income reports showed 0.5% and 0.3% gains respectively. The core PCE price index marked another 0.1% gain instead of staying flat, but pending home sales fell short of consensus with a 1.0% decline. US Chicago PMI and CB consumer confidence reports are due today, with both slated to post small declines.

EUR

The euro put up a decent fight in yesterday’s trading sessions, as it held on to the 1.2700 handle to the dollar. Data from the euro zone was better than expected, as Germany reported a flat reading instead of a 0.1% decline for its preliminary CPI and Spain showed a 0.2% drop instead of the projected 0.3% decline for its flash CPI reading. German retail sales and French consumer spending reports are due today and another set of strong figures might be enough to keep the euro afloat.

GBP

The pound also held its ground in recent trading, despite the lack of strong data from the UK yesterday. In fact, the UK mortgage approvals report fell short of expectations as it showed a 64K reading instead of the projected 66K figure. Earlier today, the GfK consumer confidence showed a -1 reading instead of the estimated drop from 1 to 0. UK current account and Nationwide HPI are due today and weak figures could lead to pound weakness.

CHF

The franc moved sideways to the euro but weakened to the dollar, even as there were no reports released from Switzerland. The Swiss KOF economic barometer is due today and it is slated to dip from 99.5 to 99.1, which might lead to more franc weakness.

JPY

The yen saw a round of mixed data from Japan yet it managed to rally against the dollar in the past few hours. Household spending was weaker than expected at -4.7% versus the -3.5% consensus while industrial production also missed the mark as it showed a 1.5% decline instead of the projected 0.2% rebound. The unemployment rate improved from 3.8% to 3.8% and retail sales showed a stronger than expected 1.2% gain versus the estimated 0.4% uptick.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a weak run in the previous trading day, with NZD mostly weighed lower by the confirmation of RBNZ intervention. The Australian dollar also followed suit, as there were no reports to keep it afloat yesterday. Earlier today, the Chinese HSBC final manufacturing PMI was downgraded from 50.5 to 50.2. Geopolitical tension stemming from the protests in Hong Kong are also weighing on risk sentiment and higher-yielding commodity currencies for now.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 1, 2014)

USD

The US dollar continued to advance against its forex counterparts, especially to the euro and the yen. Data from the US economy was actually weaker than expected but it appears that risk sentiment has favored the safe-havens recently. Chicago PMI fell from 64.3 to 60.5, lower than the estimated 61.6 reading, while the CB consumer confidence reading slipped from 93.5 to 86.0, worse than the projected 92.2 figure. US ADP non-farm employment change data is due today and a 207K reading is expected. Also due today is the ISM manufacturing PMI, which might dip from 59.0 to 58.6.

EUR

The euro suffered another round of selling in recent trading after the euro zone CPI forecasts came in weaker than expected. The headline flash reading fell from 0.4% to 0.3% while the core CPI estimate fell from 0.9% to 0.7%, reviving concerns of deflation and calls for extra ECB easing. German retail sales and French consumer spending data both printed stronger than expected figures though, but these were mostly ignored by the markets. German unemployment picked up by 12K, adding to the euro’s weakness. Spanish and Italian manufacturing PMI are due today.

GBP

The pound gave up ground in recent trading as the UK current account balance came in weaker than expected and saw a downward revision for the previous figure. The final GDP was revised up from 0.8% to 0.9% though. For today, UK manufacturing PMI is up for release and it might improve from 52.5 to 52.6. Weaker than expected data could push the pound lower against its counterparts.

CHF

The franc resumed its selloff to the dollar but moved sideways to the euro in recent trading. There were no reports released from Switzerland then, as the franc took its cue from euro weakness. Swiss SVME PMI is due today and it might dip from 52.9 to 52.1, which would reflect a weaker expansion in the manufacturing industry.

JPY

The yen lost ground in today’s Asian trading session as the Tankan survey printed mixed results. The manufacturing component improved from 12 to 13 instead of falling to 10 while the non-manufacturing component slipped from 19 to 13, worse than the estimated reading at 17. Talks of further easing from the BOJ are also weighing on the yen for the time being.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to recover to the dollar recently, with NZDUSD pulling up to .7800 and AUDUSD retesting .8750. However, the selling resumed in today’s Asian trading session as Australia’s retail sales showed weaker than expected results while China’s manufacturing PMI held steady at 51.1. New Zealand’s GDT price index is up for release within the day and might also have an impact on Kiwi movement. There are no reports lined up from Canada.

By Kate Curtis from Trader's Way