Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Oct 6, 2014)

USD

The US dollar had a strong rally on Friday, as the September NFP report churned out stronger than expected results. Employment picked up by 248,000 during the month, higher than the projected 212,000 increase. The previous months’ reports were also upgraded, amounting to 69,000 in upward revisions. These were enough to bring the jobless rate down to 5.9% - its lowest level since mid-2008. However, average hourly earnings stayed flat and indicated that there is still a significant amount of slack in the economy. There are no major reports lined up from the US today, which suggests that previous trends might continue.

EUR

The euro gave up more ground to the dollar on Friday, as services PMI from Spain and Italy fell short of expectations. Spanish services PMI fell from 58.1 to 55.8, lower than the estimated 56.9 reading. Italian services PMI dropped from 49.8 to 48.8, reflecting a sharper contraction in the industry. German factory orders data is up for release today and a 2.4% decline is projected, with weaker than expected results likely to push the euro lower.

GBP

The pound also suffered a wave of selling last Friday as the UK services PMI came in weaker than expected. The reading slipped from 60.5 to 58.7, lower than the projected 59.1 figure. There are no major reports due from the UK today, leaving pound pairs likely to stay in consolidation or to move to the tune of risk sentiment.

CHF

The franc gave up a lot of ground to the dollar and the euro on Friday, despite the lack of data from Switzerland. The currency took its cue from weak euro data and the fact that the SNB might be moving to closer to currency intervention.

JPY

The yen had a mixed performance, as it lost ground to the dollar but gained against the pound and most of its major counterparts. There were no reports released from Japan then and none are due today, but traders are probably pricing ahead of a dovish BOJ statement this week as Japanese data has been mostly disappointing.

Commodity Currencies (AUD, NZD, CAD)

After a bit of retracements, the commodity currencies resumed their slide to the dollar on Friday. Canadian trade balance was weaker than expected at a 0.6 billion CAD deficit versus the projected 1.5 billion CAD surplus while the previous figure suffered a downgrade. ANZ reported a 0.9% pickup in job advertisements but it was weaker compared to the previous 1.6% gain. Canadian Ivey PMI is due today and an improvement from 50.9 to 53.4 is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 7, 2014)

USD

The US dollar gave back some of its latest wins, as traders took profits off their long dollar positions yesterday. There have been no reports released from the US then, which allowed traders to reduce some of their holdings. For today, there are still no major US reports lined up, with only the JOLTS job openings and consumer credit data due. The US dollar could take its cue from speeches by a couple of FOMC members, who could provide more clues on how the upcoming FOMC minutes might turn out and what the Fed has in mind in terms of monetary policy adjustments.

EUR

The euro bounced strongly against the dollar in recent trading despite weak data from the euro zone. German factory orders saw a massive 5.7% decline, worse than the projected 2.4% drop. Euro zone retail PMI fell from 45.8 to 44.8, reflecting a sharper contraction in the industry. Sentix investor confidence slipped from -9.8 to -13.7, lower than the estimated -11.8 figure. For today, German industrial production data is up for release and a 1.4% decline is expected.

GBP

The pound made a small recovery yesterday, as traders booked profits off their dollar trades. Medium-tier data from the UK was better than expected, as the housing equity withdrawal report showed -10.8 billion GBP reading versus the projected -11.3 billion GBP figure while the previous quarter’s figure was upgraded. UK manufacturing production data is due today and a small 0.2% uptick is eyed. Also up for release are the BOE credit conditions survey and the industrial production report.

CHF

The franc bounced back to action in yesterday’s sessions, recovering to the dollar but losing further ground to the euro. There have been no reports released from Switzerland then while today has the retail sales, CPI and foreign currency reserves on tap. Retail sales could pick up by an annualized 0.8% while the CPI might show a 0.2% monthly uptick in price levels. The foreign currency reserves report could indicate whether or not the SNB has room to intervene in the forex market to defend the franc peg.

JPY

The BOJ is set to make its interest rate statement today and no actual policy changes are expected. However, any change in tone or rhetoric could spark huge yen moves as an inclination to ease again might lead to more losses. Bear in mind that data from Japan has been mostly disappointing lately, reminding policymakers that the country hasn’t fully recovered from the sales tax hike yet.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a chance to recover to the dollar recently, as profit-taking took place. Canada’s Ivey PMI came in better than expected at 58.6 versus the projected 53.4 reading and the previous 50.9 figure, reflecting a strong rebound in the manufacturing sector. The RBA is set to make its monetary policy statement today and might trigger a huge reaction from Aussie pairs if any changes are announced.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 8, 2014)

USD

The US dollar had trouble getting back on its feet in yesterday’s trading sessions as most traders were still in profit-taking mode. Data from the US economy was mixed, as the JOLTS job openings came in stronger than expected while the IBD/TIPP economic optimism index fell short of estimates. Biases from FOMC officials who gave speeches were also mixed, discouraging traders from piling on their long dollar trades ahead of today’s FOMC minutes release. Indications that the Fed is seriously considering an exit strategy to be implemented soon might lead to more dollar gains.

EUR

The euro struggled to edge higher against its forex counterparts, despite weaker than expected data from Germany. The country’s industrial production report marked a 4.0% decline, worse than the projected 1.4% drop, while the previous month’s reading was downgraded to show a smaller increase. There are no reports due from the euro zone today.

GBP

The pound was unable to advance further in recent trading as UK manufacturing production came in weaker than expected. The report showed a mere 0.1% uptick instead of the projected 0.2% increase, slower than the previous 0.3% gain. Industrial production stayed flat in the same period. UK Halifax HPI is up for release today and it might show a 0.2% uptick, with weaker than expected data likely to weigh further on the pound.

CHF

The franc edged higher against the euro and the dollar recently, despite mixed data from Switzerland. The CPI showed a small 0.1% uptick instead of the projected 0.2% increase in price levels, reminding that deflation could still be a concern in the country. However, the retail sales report showed a strong 1.9% rebound while the previous figure was upgraded to show a smaller decline. Swiss jobless rate is due today and an improvement from 3.2% to 3.1% is eyed.

JPY

The yen regained strength to most of its major counterparts, particularly the dollar and the Kiwi. The BOJ decided to keep policy unchanged as expected, but cited weakness in production due to the sales tax hike. Earlier today, Japan’s current account balance came in weaker than expected as it saw a smaller surplus. The BOJ Monthly Report and Economy Watchers sentiment index is due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to recover in recent trading but were unable to take advantage of dollar weakness. The RBA decided to keep rates unchanged at 2.50% as expected, although they mentioned that hiring has been unusually volatile and that house prices remain a concern. Canadian building permits was weaker than expected at -27.3% versus the projected 6.0% drop while the previous data was downgraded. Canadian housing starts is up for release later and another weak reading might lead to a Loonie selloff.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 9, 2014)

USD

The US dollar got hit by a wave of selling in recent trading, as the FOMC minutes turned out to be dovish. Policymakers weren’t too keen about hiking interest rates early next year as they reiterated that rates will remain low for a “considerable time” after easing ends. They also noted that the dollar strength is starting to weigh on external demand and may spark disinflation. Only the initial jobless claims report is up for release today and this might not have much of an impact on dollar trading if profit-taking continues.

EUR

The euro was able to recover to the dollar although it continued to weaken against some of its major counterparts. There were no reports released from the euro zone yesterday while today has only medium-tier data on tap. These are the German and French trade balance, which are both expected to weaken from their previous month’s readings.

GBP

The pound took advantage of dollar weakness recently as GBPUSD rallied strongly after the FOMC minutes were released. Halifax HPI in the UK was stronger than expected at 0.6% versus the projected 0.2% gain. For today, the BOE statement could drive pound price action, although no actual changes are expected. Any hawkish remarks could push the pound for more gains.

CHF

The franc continued to rally against the dollar but gave up some ground to the euro. There have been no major reports out of Switzerland yesterday, apart from the jobless rate which held steady at 3.2%. For today, there are no reports due from Switzerland and franc pairs might be sensitive to risk sentiment.

JPY

The yen showed signs of weakness to most of its counterparts but rallied to the dollar after the FOMC minutes were released. Japanese trade balance and Economy Watchers sentiment both came in weaker than expected, highlighting the odds of further easing from the BOJ. Earlier today, core machinery orders showed a strong 4.7% pickup. Preliminary machine tool orders data is up for release next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls advanced to the dollar and took advantage of the pickup in risk sentiment, as the Fed pledged to keep monetary policy easy for the time being. Canadian housing starts came in line with expectations at 197K while Australia’s jobs data printed weaker than expected results. Employment change fell by 29.7K while the previous reading was downgraded, keeping the jobless rate at 6.1%. There are no major reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 10, 2014)

USD

The US dollar managed to recover some of its recent losses, as data from the economy came in stronger than expected. Initial jobless claims came in at 287K, lower than the expected 291K figure and indicative of improving hiring trends. US import prices data and testimonies from a couple of FOMC members are lined up for today and these might determine if the Greenback could hold on to its current levels.

EUR

The euro resumed weakness in yesterday’s sessions, as ECB Governor Draghi reminded market watchers that they are ready to ease further if needed. He also reiterated that structural changes might be necessary in order to boost growth in the region. German trade balance was weaker than expected as it slipped to 17.5 billion GBP while the French trade balance came in line with expectations.

GBP

The pound suffered a quick selloff after the BOE interest rate statement, although the central bank refrained from making monetary policy changes. Traders might wait for the minutes of the meeting to be released before establishing their pound biases. UK construction output and CB leading index are up for release today and these might drive short-term GBP movement.

CHF

The franc returned some of its recent gains as it followed the euro’s footsteps. There have been no reports released from Switzerland then and none are due today, keeping the franc vulnerable to risk sentiment and possibly euro movement.

JPY

The yen managed to score wins in recent trading sessions as risk appetite remained weak during the Asian session. Japanese data was mixed, with core machinery orders showing better than expected results and preliminary industrial production falling short of expectations. Earlier today, the tertiary industry activity index marked a weaker than expected 0.1% decline while the previous reading was downgraded to show a 0.3% drop. Consumer confidence data is still up for release.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were back in a weak spot yesterday, as most gave up ground to the dollar. Australia’s jobs report showed bleak results, with a 29.7K drop in hiring while home loans showed a sharper than expected 0.9% decline, indicating that a potential housing price bubble may be starting to hurt the industry already. Canadian jobs data is up for release today and it might show an 18.7K rebound in hiring, enough to keep the jobless rate steady at 7.0%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 13, 2014)

USD

The US dollar regained ground last week as risk aversion dominated the financial markets, in the wake of a worsening Ebola crisis and geopolitical tensions in Hong Kong. There were no reports released from the US economy last Friday and there are no reports up for release today, as banks are on holiday. Risk sentiment might continue to drive currency price action, with the US dollar likely to stay supported unless risk appetite improves.

EUR

The euro gave up more ground to its counterparts last week, as medium-tier data from the euro zone came in mixed. French industrial production stayed flat instead of showing a 0.2% decline while Italian industrial production marked a weaker than expected 0.3% uptick versus the projected 0.6% gain. There are no major reports due from the euro zone today.

GBP

The pound was in a weak spot last Friday, with mixed economic data from the UK. The trade balance was stronger than expected at a deficit of 9.1 billion GBP instead of the projected 9.6 billion GBP shortfall. Construction output slumped by 3.9% instead of showing the projected 0.5% uptick. There are no reports due from the UK economy today.

CHF

The franc weakened to the dollar in recent trading, as there were no reports to keep the franc supported on Friday. There are still no reports up for release from Switzerland today, leaving the franc sensitive to euro zone data and risk flows.

JPY

The yen was a big winner in recent trading, even against the US dollar. Risk aversion helped support the lower-yielding currency, despite weak data from the Japanese economy. The BOJ minutes indicated that policymakers are concerned about weakening production but didn’t see the need to boost easing just yet. Tertiary industry activity marked a 0.1% decline instead of the estimated 0.2% increase. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground on risk aversion last week, although the Canadian dollar received a good boost from strong jobs data. For the month of September, Canada saw an employment gain of 74.1K and a jobless rate improvement from 7.0% to 6.8%, as full-time hiring picked up. Earlier today, China’s trade balance release came in weaker than expected at a surplus of 31.0 billion USD versus the projected 41.2 billion USD surplus, indicating weaker trade performance in the world’s second largest economy.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 14, 2014)

USD

The US dollar gave back some of its recent gains again, as range-bound behavior seems to be influencing most forex pairs. US banks were on holiday yesterday, which explains the lack of trending price action. Traders are expected to return to their desks today, although data is still light from the US economy. With that, risk sentiment could continue to drive forex movements, with a risk-off environment continuing to favor the safe-haven dollar.

EUR

The euro regained ground in recent trading, as most banks were on holiday yesterday. Data from the euro zone came in line with forecasts, as the German WPI marked a 0.1% uptick as expected. The German ZEW economic sentiment figure is up for release today and it might show a drop from 6.9 to 0.2, reflecting another downturn in confidence. Euro zone industrial production data is also due today and a 1.5% drop is eyed.

GBP

The pound moved mostly sideways in yesterday’s sessions since there were no reports released from the UK economy. UK CPI could provide pound pairs more direction today, with the headline inflation reading likely to drop from 1.5% to 1.4% and the core version to show a decline from 1.9% to 1.8%. If so, this would cast more doubts on the BOE’s readiness to tighten next year and push the pound lower against its counterparts.

CHF

The franc recovered to the dollar and the euro, despite the lack of data from Switzerland yesterday. Only the Swiss PPI is due today and it might show a 0.2% rebound, enough to spur more demand for the franc and ease deflationary fears in the country. However, the franc might also be swayed by euro zone data, which could show a deeper slowdown in the region.

JPY

The yen continued to rally against its counterparts as risk aversion dominated market movements. Japanese banks were closed yesterday and there were no reports released from Japan. There are still no reports due from Japan today, leaving yen pairs sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the US holiday and proceeded to advance against the dollar yesterday. Chinese trade balance was weaker than expected, but underlying data showed a strong improvement in both imports and exports. Earlier today, the Australian NAB business confidence figure marked a decline from 7 to 5, reflecting weaker optimism. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 15, 2014)

USD

The US dollar regained footing against the pound and the euro in recent trading, despite the lack of top-tier data from the US economy. Risk sentiment provided support for the safe-haven currency, which is also starting to advance against the commodity currencies and is taking advantage of the decline in commodity prices. For today, US retail sales data is due, with the headline figure likely to post a 0.1% decline and the core reading estimated to print a 0.2% uptick. An upside surprise might lead to more demand for the US currency.

EUR

The euro suffered another wave of selling to its counterparts, as Germany showed a bleak ZEW economic sentiment figure. The reading fell from 6.9 to -3.6 instead of just dipping to 0.2, indicating that the outlook has worsened significantly. In the euro zone region, the ZEW economic sentiment reading is down from 14.2 to 4.1, lower than the projected 7.1 figure. For today, ECB Governor Draghi’s testimony might dictate euro price action.

GBP

The pound gave up its recent gains to its counterparts when the UK CPI came in much weaker than expected, casting doubts on whether the BOE can afford to tighten next year or not. The headline reading dropped from 1.5% to 1.2%, lower than the projected 1.4% figure, while the core CPI slipped from 1.9% to 1.5%. UK jobs data is up for release today and another disappointment might push pound pairs much lower. The claimant count change is projected to show a 34.2K decline while the jobless rate is slated to improve from 6.2% to 6.1%.

CHF

The franc weakened to its counterparts once more as Swiss PPI highlighted deflationary concerns in the country. The reading showed a 0.1% drop in producer prices, following the previous 0.2% decline and worse than the projected 0.3% rebound. Apart from that, weak euro zone data also weighed on the franc as the prospect of more ECB easing also ups the odds for SNB intervention or negative deposit rates. There are no reports due from Switzerland today.

JPY

The yen took advantage of the run in risk aversion recently, advancing to most of its higher-yielding counterparts. There have been no major reports released from Japan then and none are due today, leaving risk sentiment in the driver’s seat. Weak data from major economies and continued geopolitical risk could keep higher-yielding currencies weaker against the lower-yielding yen.

Commodity Currencies (AUD, NZD, CAD)

Comdolls chalked up massive losses recently, particularly the Canadian dollar which fell victim to weaker oil prices. Earlier today, the Chinese CPI report came in weaker than expected and put more pressure on the Aussie and Kiwi. The GDT index from New Zealand is up for release in the dairy auction today, with another decline likely to push the Kiwi lower. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 16, 2014)

USD

The US dollar got sold off heavily in recent trading, as the US retail sales report came in weaker than expected. The headline reading showed a 0.3% decline versus the projected 0.1% dip while the core version of the report showed a 0.2% drop instead of the estimated 0.2% gain. The Empire State manufacturing index also came in weaker than expected since it slipped from 27.5 to 6.2, much lower than the projected 20.3 figure. For today, initial jobless claims and industrial production data might dictate dollar movements.

EUR

The euro managed to take advantage of dollar weakness since there were no major reports released from the euro zone yesterday. ECB Governor Draghi didn’t drop any surprises during his testimonies, keeping further losses in check for the time being. Euro zone final CPI readings are up for release today and these might show unchanged readings, although downgrades could push the euro back in selloff mode.

GBP

The pound had a volatile trading day as the jobs report printed mixed results. The claimant count change reading was much weaker than expected, as it showed a mere 18.6K pickup in hiring versus the projected 34.2K rise. The jobless rate dropped from 6.2% to 6.0%, as the number of unemployed fell below 2 million for the first time in six years. There are no reports up for release from the UK today, as traders might continue to weigh in on how the latest jobs report might affect BOE policy bias.

CHF

The franc resumed its rallies to the dollar and there were no reports released from Switzerland yesterday. Swiss SECO economic forecasts are up for release today and a downbeat outlook might force the franc to return its recent gains. Apart from that, the franc might also be extra sensitive to risk sentiment.

JPY

The yen continued to advance against most of its major counterparts, as risk aversion supported the lower-yielding currency. Industrial production was weaker than expected at -1.9% versus -1.5%, confirming BOJ policymakers’ fears that production hasn’t recovered from the sales tax hike yet. There are no reports due from Japan today, leaving yen pairs at the mercy of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to bounce back to the dollar in recent trading, as the global dairy trade price index from New Zealand marked a 1.4% rebound. Apart from that, Australia also saw some improvements in Westpac consumer sentiment and new motor vehicle sales. Canadian manufacturing sales and foreign securities purchases data are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 17, 2014)

USD

The US dollar was unable to regain strength in recent trading, despite better than expected data from the US economy. The initial jobless claims showed a 264K reading, lower than the estimated 286K figure and indicative of more improvements in the US labor market. Industrial production and capacity utilization data also printed stronger than expected results. US building permits and housing starts are due today, along with the preliminary UoM consumer sentiment index and a speech from Fed head Yellen.

EUR

The euro halted from its recent climb, even though the euro zone saw better than expected economic data. The trade balance beat expectations with a 15.8 billion EUR surplus versus the projected 13.5 billion EUR figure while the previous month’s reading was upgraded. There are no major events lined up in the euro zone today.

GBP

The pound regained ground recently since there were no disappointing reports released from the UK, allowing traders to book profits off their recent pound shorts. There are still no major reports due from the UK economy today, leaving pound pairs sensitive to risk sentiment.

CHF

The franc advanced further to the dollar, thanks to improving euro zone data. There were no reports released from Switzerland yesterday and none are due today, which suggests that market sentiment might be in the driver’s seat of franc price movements.

JPY

The yen gave up some ground, as USDJPY bounced off a key area of interest while other yen pairs also found support at major levels. There have been no reports released from Japan then and none are due today, with risk aversion likely to keep the lower-yielding Japanese yen supported.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were stuck mostly in consolidation to the dollar in recent trading, as the increasing global uncertainties weighed on the higher-yielders’ price action. Data from Canada was mixed, with weaker than expected manufacturing sales but better than expected foreign securities purchases. For today, Canadian CPI figures are up for release and might confirm if the downturn in price pressures also took hold on their economy.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 20, 2014)

USD

The US dollar had a pretty good run on Friday as it made a small recovery to its forex counterparts. Profit-taking off the short trades took place and it remains to be seen whether the recovery would take hold or not. Data from the US was in line with expectations, as building permits and housing starts showed a 1.02M figure. The dollar gapped higher against some of its major counterparts, particularly the euro and the yen, over the weekend. There are no major reports up for release from the US economy today, leaving market sentiment in the driver’s seat.

EUR

The euro resumed its weakness to most of its counterparts towards the end of last week, as the German central bank head spoke of economic reforms. Apart from that, there were no market-movers for the euro pairs on Friday while today has only a few medium-tier reports on tap. German PPI could show a 0.1% rebound in producer price levels while the euro zone current account balance is up for release. Weaker than expected data could push the euro lower against its forex counterparts once more.

GBP

The pound struggled to hold its ground last Friday, as there were no major reports released from the UK economy. Earlier today, the Rightmove HPI marked a 2.6% gain house prices, stronger than the previous 0.9% uptick. There are no other reports up for release from the UK today, which suggests that pound pairs could also be driven by market sentiment.

CHF

The franc was no match to dollar strength on Friday, as there were no reports to keep the currency afloat then. The calendar for Switzerland is still empty for today, which suggests that the Swiss currency could take its cue from the euro or from risk sentiment.

JPY

The yen gave back some of its recent gains towards the end of last week, as traders booked profits off their short trades on the yen pairs. There were no reports released from Japan then and none are due today, suggesting that risk sentiment might be the primary driver of price action for yen pairs for today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to recover to the dollar on Friday, although the Australian dollar put up a good fight and moved mostly sideways. In Canada, inflation reports showed stronger than expected results once more, with the headline CPI showing a 0.1% gain instead of staying flat and the core CPI marking a 0.2% increase. Canadian wholesale sales are up for release today and analysts are expecting to see a 0.2% rebound, which might be enough to keep the Loonie supported.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 21, 2014)

USD

The US dollar lost ground to majority of its forexcounterparts as risk appetite appeared to improve at the start of the week. There have been no major reports released from the US, although a couple of FOMC members gave testimonies. There are still no major reports due from the US today, with only the medium-tier existing home sales data on tap. The report could show an increase from 5.05 million to 5.11 million, which might be enough to keep the dollar supported. Risk sentiment could continue to play a major role in forex price action for the time being.

EUR

The euro edged slightly higher in recent trading, despite weak data from the euro zone. German PPI stayed flat instead of posting the estimated 0.1% gain in producer prices while the euro zone current account balance showed a smaller than expected 18.9 billion EUR surplus versus the projected 21.3 billion EUR surplus. For today, there are no major reports due from the euro zone, leaving euro pairs sensitive to risk appetite.

GBP

The pound was able to keep up its recent gains, even though there were no major reports released from the UK economy. The Rightmove HPI marked a 2.6% gain in house prices, stronger than the previous 0.9% uptick. UK public sector net borrowing data is up for release and the figure is slated to dip from 10.9 billion GBP to 9.3 billion GBP, which might be positive for the pound.

CHF

The franc regained ground to the dollar, despite the lack of data from Switzerland. Swiss trade balance is set for release today and a wider surplus is expected. The report could show a trade surplus of 2.43 billion CHF, up from the previous 1.33 billion CHF. Stronger than expected data could keep the franc afloat against its forex counterparts.

JPY

The yen gave back some of its recent gains as risk appetite continued to improve in the markets recently. There have been no reports released from Japan at the start of the week and there are none lined up for today, suggesting that yen pairs could continue to take their cue from risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk-taking and advanced to the dollar and the yen in recent trading. Data from Canada came in line with expectations, as wholesale sales marked a 0.2% rebound from the previous 0.2% decline. In New Zealand, visitor arrivals marked a 0.9% increase after declining by 3.0% in the previous month. RBA monetary policy minutes are up for release today, along with Chinese GDP for Q3, which might be big movers for the Australian dollar and overall risk sentiment. Chinese GDP is slated to drop from 7.5% to 7.2%, which could confirm that the world’s second largest economy is slowing down. Weaker than expected data could lead to a return in risk aversion.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 22, 2014)

USD

The US dollar was able to bounce back against most of its forex counterparts in recent trading sessions, as US existing home sales printed stronger than expected results and risk aversion started to creep back in the markets. Existing home sales climbed from 5.05M to 5.17M, outpacing the consensus at 5.11M. For today, US CPI reports are up for release and weak data might be seen, given the recent trend in global inflation readings. The headline CPI might print a flat reading while the core CPI could see a mere 0.2% uptick.

EUR

The euro gave back most of its recent gains to the dollar and yen, as traders continued to worry about the prospect of another recession and further ECB easing. There were no reports released from the euro zone then while today also has an empty economic schedule. With that, euro pairs might be a little more sensitive to risk sentiment.

GBP

The pound was in a weak spot recently, as traders started to price in expectations of a downbeat BOE minutes. Recall that their latest policy statement was less upbeat than usual, as policymakers cited concerns about the negative impact of a euro zone recession on the UK economy. The minutes should contain more details on their worries, which could worsen the pound’s selloff.

CHF

The franc also looked weak to the dollar in recent trading, as the currency was unable to hold on to its current gains without much support from Swiss data. The trade balance came in close to expectations, although the previous month’s reading suffered a downgrade and led to franc selling. There are no major reports lined up from Switzerland today, leaving the franc vulnerable to risk flows.

JPY

The yen was able to hold steady in recent trading, as risk aversion supported the lower-yielding currency. The Japanese all industries activity index marked a smaller than expected 0.1% dip instead of the projected 0.3% decline, although the previous figure was downgraded to -0.4%. Japan’s trade balance also came in weaker than expected today, which might keep risk-taking in check.

Commodity Currencies (AUD, CAD, NZD)

Thecomdolls drew a bit of support as Chinese GDP came in slightly better than expected at 7.3% versus the projected 7.2% growth figure. However, this is still a weaker pace of expansion compared to the previous 7.5% reading. Industrial production was stronger than expected at 8.0% versus the 7.5% forecast, lending brighter prospects for commodity exports. Australia’s CPI came in line with expectations while New Zealand is set to release its own inflation reports in the late US session. The BOC statement could move the Loonie pairs today, as a dovish announcement might push the currency much lower. Canadian retail sales are also up for release today, with the headline figure likely to print a 0.1% uptick and the core figure to show a 0.2% increase.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 23, 2014)

USD

The US dollar continued to assert its dominance in the forex market, as risk aversion stayed in the markets. Data from the US economy came in mixed, with the core CPI coming in short of expectations with a 0.1% uptick instead of the projected 0.2% gain and the headline CPI beating the consensus of a flat reading and showing a 0.1% increase. US initial jobless claims and flash manufacturing PMI are due today, both of which could drive short-term dollar price action. Risk sentiment remains in the driver’s seat and continues to keep the safe-haven currencies strong.

EUR

The euro gave up more ground to the dollar in recent trading sessions, even though there were no weak reports printed from the euro zone. For today, the German and French PMI readings could determine whether or not the shared currency has a shot at recovering. However, analysts predict that the manufacturing and services sectors of these top two euro zone economies might continue to show more weakness and sharper contractions. Lower than expected results could remind traders of the looming euro zone recession and push the currency down.

GBP

The pound also weakened in recent trading when risk aversion set in. As expected, the BOE minutes indicated why policymakers appeared less hawkish than usual, as most members of the committee became more concerned about the impact of a euro zone recession on the UK economy. Two policymakers still voted to hike rates this month while the decision to keep asset purchases unchanged was unanimous. UK retail sales, BBA mortgage approvals, and CBI industrial order expectations are up for release today.

CHF

The franc took its cue from the euro and gave back its recent gains to its counterparts, as there were no major reports from Switzerland to give the franc direction yesterday. There are still no reports due from the country today so the franc could react strongly to euro zone PMI releases, with weak data likely to weigh on the Swiss currency as well.

JPY

The yen took advantage of the run in risk aversion recently, as the lower-yielding currency recovered to the euro and the pound. Japan’s flash manufacturing PMI came in stronger than expected at 52.8 versus the projected 52.1 figure and up from the previous 51.7 reading. No other reports are due from Japan, with risk sentiment likely to give yen pairs direction.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground on risk aversion, as the Loonie saw a little more volatility due to Canadian economic releases. The retail sales report churned out weaker than expected readings yet the Loonie drew support from the BOC’s decision to drop their “neutral” wording in their rate statement. This was interpreted to be a hawkish sign, although their actual statement still contained hints of caution. Earlier today, New Zealand reported a weaker than expected quarterly CPI of 0.3% versus 0.5%, causing a massive Kiwi selloff. BOC Governor Poloz is set to testify today while New Zealand will release its trade balance later on.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 24, 2014)

USD

The US dollar moved sideways in recent trading, as major pairs were stuck at key levels. Data from the US was mostly weaker than expected, with the initial jobless claims showing a larger than expected 283K increase versus the projected 269K figure. The flash manufacturing PMI saw a drop to 56.2 for October while the previous reading was downgraded. US new home sales data is up for release today and it might show a decline from 504K to 473K, which might lead to a bit of dollar weakness.

EUR

The euro recovered slightly to the dollar and advanced to the yen in recent trading, as euro zone manufacturing and services PMI came in better than expected. Flash manufacturing PMI improved from 50.3 to 50.7 while the services index held steady at 52.4 instead of dipping to 52.0. In Germany, the manufacturing PMI landed back above 50.0 and reflected industry expansion while France saw more weakness in both manufacturing and services. German GfK consumer climate data is due today and this might dictate euro price action for the rest of the day. A drop from 8.6 to 8.1 is expected.

GBP

The pound was on weak footing yesterday since UK retail sales showed weaker than expected results. Consumer spending fell by 0.3% in September, worse than the estimated 0.1% dip. BBA mortgage approvals was also weaker than expected, as the reading fell from 41.4K to 39.3K. UK GDP is up for release today and another disappointment might lead to more pound weakness, as this would validate concerns that the BOE isn’t ready to tighten policy next year.

CHF

The franc moved sideways to the dollar, as there were no major reports from Switzerland. The currency did gain a bit of support from improved euro zone PMI, which was enough to keep it steady for the most part. For today, there are still no reports due from Switzerland, which suggests that euro zone data or risk sentiment could drive franc movement.

JPY

The yen lost ground as risk appetite improved in recent trading and BOJ Governor Kuroda admitted that yen weakness is helping the economy achieve its inflation target. He also mentioned that their recent review of falling energy prices suggest that inflation could fall back to 1% and that the Japanese central bank might need to implement further stimulus. There are no major reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi lost further ground in recent trading since New Zealand’s trade balance came in weaker than expected. The deficit widened from 489 million NZD to 1350 million NZD, suggesting weaker export activity. There are no reports due from the rest of the comdoll economies today, leaving the currencies sensitive to risk sentiment and potential profit-taking.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 27, 2014)

USD

The US dollar gave back some of its recent gains on Friday as data from the US economy came in weaker than expected. New home sales came in at 467K, short of the 473K consensus, while the previous month’s reading was downgraded to 466K. Pending home sales data is due today and a 1.1% rebound is eyed to follow the previous month’s 1.0% decline. Weaker than expected figures might cause another round of dollar selling.

EUR

The euro made a bit of a recovery on Friday, as traders booked profits ahead of the release of the euro zone banking stress test results. As it turned out, 25 out of 123 banks failed the test, mostly in Italy. This indicates that some banks have a few months to come up with the necessary funds to cover their shortfall or else run the risk of failing if a recession takes hold. German GfK consumer climate ticked up from 8.4 to 8.5 instead of falling to 8.1, providing a bit of hope for the consumer sector in euro zone’s largest economy. German Ifo business climate is due today and a dip from 104.7 to 104.6 is expected.

GBP

The pound also made a strong bounce at the end of the week, as the preliminary UK GDP reading came in line with expectations of 0.7% growth. To top it off, the previos quarter’s reading was upgraded to show a 0.9% expansion. UK CBI realized sales is due today and it might show a drop from 31 to 29, which might be taken negatively by the pound.

CHF

The franc recovered to the dollar last week, despite the lack of top-tier data from Switzerland. There are still no reports due from the country today, leaving traders to focus mostly on euro zone data and its potential effect on the Swiss economy and SNB monetary policy. Risk sentiment might also be a key mover for the franc pairs today.

JPY

The yen lost ground on Friday, as BOJ Governor Kuroda admitted that there might be need for more easing should the economy fail to meet its inflation target. He pointed out that falling energy and commodity prices might drag overall price levels back below 1%, farther away from their 2% goal. There are no reports due from Japan today, which suggests that this shift in BOJ stance might keep pushing the yen lower.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to take advantage of dollar weakness on Friday, as AUDUSD consolidated while NZDUSD gave up more ground. There were no reports released from these economies then and there are no major ones on tap for today, indicating that risk sentiment might be the big mover for these currencies.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 28, 2014)

USD

The US dollar had a mixed performance recently, as it gained ground to the yen but gave up some gains to the pound and the euro. Pending home sales was weaker than expected with a mere 0.3% uptick instead of the estimated 1.1% gain. US durable goods orders data is due today, with the headline figure expected to show a 0.4% gain following the previous 18.4% drop and the core figure likely to show a 0.5% uptick. Weaker than expected data could indicate that the US economy is starting to slow down and might lead to dollar selling.

EUR

The euro made a bit of recovery recently even as the German Ifo business climate report came in weaker than expected. The index slipped from 104.7 to 103.5, way below the estimated 104.6 reading. This indicates that business sentiment has weakened considerably in the euro zone’s largest economy. Data on German import prices is due today and might indicate if the region is in for more deflationary pressures, which might then cause euro weakness.

GBP

The pound continued its steady ascent in recent trading, as UK CBI realized sales showed an improvement. The reading held steady at 31 instead of dipping to the estimated 29 figure. There are no reports due from the UK today, which suggests that the pound might be in for a bit of consolidation.

CHF

The franc advanced to the dollar despite the lack of data from Switzerland yesterday, suggesting that the currency simply took its cue from the euro. There are still no major reports lined up from Switzerland today, which means that consolidation might be seen unless there’s a huge change in market sentiment.

JPY

The yen was still in for a bit of weakness at the start of the week, as traders priced in the odds of additional BOJ easing. Last week, BOJ Governor Kuroda said that the country might have trouble meeting its inflation target since commodity and energy prices keep falling. Earlier today, the retail sales report showed a stronger than expected 2.3% gain, enough to reassure some traders that more stimulus isn’t necessary.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued their struggle, as though awaiting more clues from market and risk sentiment. AUDUSD was still moving sideways while the Loonie gave up some of its gains to the yen and held steady to the dollar. There were no reports from the comdoll economies yesterday and none are lined up today, suggesting that market sentiment might be a major driver or that pairs could stay stuck in consolidation for the time being.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 29, 2014)

USD

The US dollar gave up ground to most of its major counterparts, with the exception of the Japanese yen, in yesterday’s trading sessions. Durable goods orders data came in below expectations, with the headline figure showing a 1.3% decline and the core figure showing a 0.2% drop. Analysts expected a 0.4% and 0.5% gain respectively. The big mover for the US dollar today would be the FOMC statement, during which the Fed might give hints on when they could start hiking interest rates. Dovish remarks similar to their previous statement could drive the dollar lower.

EUR

The euro made a bit of recovery to the dollar and yen as German import prices came in stronger than expected and posted a 0.3% uptick. There are no major releases from the euro zone today, leaving euro pairs sensitive to risk sentiment and the upcoming FOMC decision.

GBP

The pound edged higher in recent trading sessions, despite the lack of top-tier data from the UK. For today, net lending to individuals and mortgage approvals data are due, which might lead to small pound moves across the charts. Risk sentiment and the FOMC statement might be more influential to pound price action today, as the announcement could affect market risk sentiment.

CHF

The franc continued to advance to the dollar in recent trading, as the Swiss currency was lifted by improving German import prices, easing deflationary concerns in the continent. There are still no reports up for release from Switzerland today, leaving franc pairs vulnerable to risk sentiment.

JPY

The yen continued to lose ground, weighed down by recent remarks from BOJ Kuroda saying that the economy might see weaker inflationary pressures and that the central bank might need to implement more stimulus. Data from Japan has actually been stronger than expected, as retail sales and preliminary industrial production both beat expectations.

Commodity Currencies (AUD, NZD, CAD)

The comdolls showed more strength in recent trading, as AUDUSD made an upside break from consolidation while USDCAD showed more downside momentum. There have been no major releases from Australia, New Zealand, and Canada so far this week but it appears that improvements in risk appetite are starting to lift the higher-yielding currencies. The RBNZ statement is coming up and more remarks on the overvalued Kiwi could spark fears of intervention and drive the currency lower.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 30, 2014)

USD

The US dollar made strong rallies after the FOMC statement, as the committee sounded more hawkish compared to their previous month’s announcement. Fed officials acknowledged the strong improvements in the labor sector, changing their wording to say that the under-utilization of resources has been gradually diminishing. The Fed also decided to end its QE program as expected while maintaining their pledge to keep rates low for a considerable time after easing ends. The US advanced GDP reading is up for release today and it might show a 3.1% expansion, slower compared to the previous 4.6% growth.

EUR

The euro gave up ground to the dollar but managed to hold on to its wins to the yen. There were no major reports released from the euro zone yesterday, leaving the shared currency sensitive to other economic events. For today, German and Spanish flash CPI readings are due, along with the Spanish flash GDP reading. Stronger than expected data could keep the euro afloat while weak readings might remind traders that another recession is likely.

GBP

The pound was in a weak spot to the dollar in recent trading while consolidating to most of its other counterparts. UK data was mostly weaker than expected, as mortgage approvals and net lending to individuals fell short of consensus. For today, only the UK Nationwide HPI is up for release and a 0.4% rebound in house prices is expected.

CHF

The franc return its recent wins to the dollar when the FOMC statement indicated that the Fed might still be ready to hike rates next year. There were no reports to keep the franc supported yesterday while today has the UBS consumption indicator and KOF economic barometer on tap. Both reports are expected to show improvements which might allow the franc to recover slightly.

JPY

The yen lost ground to most of its major counterparts, spurred mostly by the strong rally for USDJPY after the Fed statement. There have been no reports released from Japan then but the divergence in policy bias for the Fed and the BOJ supports an anti-yen bias. There are still no reports lined up from Japan today, as traders might price in expectations for Friday’s major reports.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to dollar strength in yesterday’s US session, as the higher-yielders returned their recent wins and more. Canada’s underlying inflation reports came in weaker than expected, casting doubts on whether the BOC can maintain its upbeat assessment or not. The RBNZ decided to keep rates on hold at 3.50% as expected while Aussie import prices marked a 0.8% quarterly decline, both resulting to weakness for their respective currencies. There are no other reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Daily Forex Currency Outlook (Oct 31, 2014)

USD

The US dollar gave back some of its recent gains even though the US GDP reading was stronger than expected. The economy grew 3.5% in Q3, better than the estimated 3.1% growth figure but weaker compared to the previous 4.6% expansion. Components of the report showed that most of the gains were spurred by government spending, although there were notable improvements in export activity as well. Medium-tier data (personal spending and income, core PCE price index, and Chicago PMI) are up for release today, with strong data likely to spur more dollar gains.

EUR

The euro got hit by a wave of mixed data, as Germany showed a strong employment figure while inflation reports fell short of expectations. The German preliminary CPI marked a 0.3% decline while Spain’s flash CPI showed a 0.1% dip, reminding traders of the possibility of deflation in the euro region. The unemployment change figure came in at -22K for Germany while Spanish GDP came in line with consensus at 0.5%. For today, German and French retail sales reports are due, along with the region-wide CPI estimates. Weak data could once again spark euro weakness.

GBP

The pound bounced back in yesterday’s trading sessions even though there were no major releases from the UK economy. Nationwide HPI marked a 0.5% gain in house prices as expected. There are no reports up for release from the UK economy today, suggesting that consolidation might be seen for pound pairs or profit-taking might drive price action.

CHF

The franc was able to recover to the dollar, thanks to upbeat data from Switzerland. The KOF economic barometer showed a higher than expected reading of 99.8, up from an upgraded 99.3 figure and outpacing the 99.2 consensus. The UBS consumption indicator improved to 1.46, although the previous figure was downgraded to 1.28. There are no major reports due from Switzerland today as the franc might take its cue from euro zone data once more.

JPY

The yen continued to give up ground to its forex counterparts, as traders kept pricing in the possibility of further BOJ easing. Earlier today, Japan’s reports came in mostly in line with expectations, with the exception of the household spending report. This showed a 5.6% decline, worse than the estimated -4.0% figure and the previous -4.7% reading. Tokyo core CPI and the national core CPI both posted weaker readings compared to the previous period, confirming BOJ Governor Kuroda’s weak inflation concerns. The BOJ statement could further spark volatility for yen pairs today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls got back on their feet yesterday, after selling off during the FOMC statement the other day. New Zealand showed a 12.2% decline in building consents while Australian producer prices marked a 0.2% gain as expected. Canadian GDP is up for release later and a flat figure is eyed, which might lead to weakness for the Loonie if the actual figure comes in weak.

By Kate Curtis from Trader's Way