Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Dec 29, 2016)

USD

Price action for dollar pairs was still subdued even as US data disappointed. Pending home sales slipped 2.5% instead of posting the projected 0.6% increase. Initial jobless claims, goods trade balance, and preliminary wholesale inventories are up for release today.

EUR

The euro continued to advance against its peers as traders seemed to shrug off Italian banking sector concerns. There were no reports out of the region yesterday while today has only a few low-tier figures lined up, namely private loans, M3 money supply, and the Italian 10-year bond auction.

GBP

The pound also struggled to establish a clear direction in recent trading as UK data missed expectations. BBA mortgage approvals came in at 40.7K, down from the earlier 40.8K figure and short of the estimated 41.6K reading. Nationwide HPI is up for release today and a 0.2% uptick in house prices is eyed.

JPY

Yen pairs moved mostly sideways as Japan paused from releasing downbeat data. Recent reports have been mostly in the red, although retail sales reflected a stronger than expected 1.7% rise versus the 0.9% consensus. There are no reports due from Japan today so market sentiment could be in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to reel from risk aversion as there were no upbeat reports to save the day. US crude oil inventories data is due today and a draw of 1.3 million barrels is eyed, easing fears of an oversupply and boosting prices. Australia is set to print its private sector credit data next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 02, 2017)

USD

The US dollar gave up ground against most of its major counterparts early in the year as traders are probably bracing for some adjustments ahead of Trump's inauguration. US banks are still closed for the holiday today so liquidity could be thin and dollar pairs could be sensitive to market sentiment.

EUR

The euro regained some ground against most of its rivals so far even as there have been no reports from the region. Final manufacturing PMI readings from its top economies are lined up today and any improvements could allow the shared currency to hold on to its recent wins.

GBP

The pound was able to recover against some of its peers as well even though UK banks are closed for today. Traders are gearing up for more top-tier catalysts due later on, such as the PMI readings from the manufacturing, services, and construction sectors.

CHF

The franc had a volatile time at the end of 2016 as traders likely booked profits off their positions then. Swiss banks are closed for the holiday today so market sentiment could push franc pairs around.

JPY

The yen gave up some of its recent gains to start the year as Japanese banks were closed for the holidays. Traders are also pricing in their reaction to last week's disappointing reports from Japan, with many speculating that the BOJ would need to ramp up its easing efforts.

Commodity Currencies (AUD, NZD, CAD)

The comdolls are struggling to regain ground against the dollar but remain mostly weak, especially China reported declines in its manufacturing and non-manufacturing PMI over the weekend. The former fell from 51.7 to 51.4 while the latter dipped from 54.7 to 54.5.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 03, 2017)

USD

The US dollar had no trouble advancing against its peers even as US markets were still closed for the holiday. Markets reopen today and the ISM manufacturing PMI is up for release. A climb from 53.2 to 53.7 is eyed and traders will pay special attention to the jobs component as a preview of Friday's NFP report.

EUR

The euro resumed its slump against most of its major counterparts even after Spain and Italy printed stronger than expected manufacturing PMI readings. Germany's PMI was upgraded from 55.5 to 55.6 while the French manufacturing PMI was unchanged at 53.5. German unemployment change data and preliminary CPI readings from Germany and France are lined up today.

GBP

The pound is still in a weak spot as traders seem to be positioning for Brexit-related uncertainties throughout the quarter. There were no reports out of the UK economy yesterday while today has the manufacturing PMI on tap. A dip from 53.4 to 53.3 is expected, reflecting a slower pace of industry growth.

CHF

The franc was off to a weak start against the dollar but managed to chalk up some gains against its European rivals. Swiss manufacturing PMI is also due today and a fall from 56.6 to 56.1 is expected.

JPY

The yen had a mixed performance as it held on to its gains versus the euro and pound but gave up ground to the dollar and commodity currencies. There have been no reports out of Japan yesterday and none are due today since banks are still closed for the holiday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls are regaining ground on the heels of stronger than expected Caixin manufacturing PMI from China. The index rose from 50.9 to 51.9 instead of holding steady, reflecting a faster pace of industry expansion. Australia's AIG manufacturing index advanced from 54.2 to 55.4. New Zealand has its GDT auction coming up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 04, 2017)

USD

The US dollar scored gains across the board, buoyed by upbeat economic data. The ISM manufacturing PMI was up from 53.2 to 54.7, much higher than the projected 53.7 figure. Components for prices, employment, production, and new orders all showed gains. Construction spending also beat expectations with a 0.9% gain. The FOMC minutes are up for release today and this might lead to another round of dollar rallies.

EUR

The euro weakened to the dollar and comdolls but managed to hold steady against the yen. Data from the region was mixed, as the French preliminary CPI missed expectations while the German flash CPI met consensus. German unemployment change data showed a larger 17K reduction in joblessness versus the projected 5K drop. Final services PMI readings are due today, along with the Spanish unemployment change report.

GBP

The pound got a bit of a boost from the upside surprise in its manufacturing PMI, although Brexit concerns dampened the currency's gains. The reading rose from 53.6 to 56.1 instead of dipping to the 53.3 consensus. Construction PMI is due today and a dip from 52.8 to 52.6 is expected.

CHF

The franc gave up ground to the dollar but scored some gains against the euro and pound. Swiss manufacturing PMI fell from 56.6 to 56.0, lower than the projected 56.1 figure. There are no reports due from the Swiss economy today.

JPY

The Japanese yen put up a fight against the dollar but was no match to comdoll strength. Japan's final manufacturing PMI was upgraded from 51.9 to 52.4 to reflect a faster pace of industry growth than initially reported. There are no other reports due from Japan today so market sentiment and the FOMC minutes could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls staged rallies late in the day as gold prices picked up. Crude oil was weaker on reports that Libya plans to increase production with its exemption from the OPEC deal. New Zealand reported a 3.9% drop in dairy prices during its latest GDT auction. No other top-tier reports are lined up from the comdolls today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 05, 2017)

USD

The US dollar gave up ground across the board when the FOMC minutes revealed that policymakers were split between faster and gradual tightening. While many expect inflation to reach their 2% target soon on rising energy prices, others expressed concern about hiking too soon ahead of Trump's fiscal policy changes. For today, the ADP non-farm employment change report is due and a slower gain of 171K is eyed, compared to the previous 216K increase. The ISM non-manufacturing PMI is also due and a dip from 57.2 to 56.6 is expected.

EUR

The euro took advantage of dollar weakness but was no match to comdoll strength. Euro zone flash CPI estimates turned out stronger than expected, with the headline reading up from 0.6% to 1.1% and the core figure rising from 0.8% to 0.9%. Final services PMI readings were mostly upgraded while the Spanish unemployment change report showed a larger than expected reduction in joblessness.

GBP

The pound advanced to the dollar but was barely able to make much headway against its peers, despite stronger than expected PMI readings. The construction PMI beat consensus with a rise from 52.8 to 54.2 instead of dropping to 52.6. Services PMI is due today and a fall from 55.2 to 54.8 is expected.

CHF

The franc was able to recover against the dollar and held on to its gains against the pound, but it gave up ground to the euro. There were no reports out of the Swiss economy yesterday so market sentiment was the main driver of price action. Swiss CPI is due today and a 0.1% drop in price levels is eyed.

JPY

The yen was one of the stronger performers as traders pared their dollar holdings. There have been no major reports out of Japan recently while today has the 10-year bond auction scheduled. Another dip in demand could bring yen weakness, although market sentiment is still likely to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was able to benefit from stronger oil prices in recent trading sessions, following reports that Kuwait Petroleum Corporation already disclosed its planned production cuts to its clients. The API crude oil inventories report also indicated a larger than expected draw in stockpiles, ahead of today's EIA report which might show a draw of 1.8 million barrels. China's Caixin services PMI indicated a rise from 53.1 to 53.4, following the earlier increase in the manufacturing component from 50.9 to 51.9.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 06, 2017)

USD

The US dollar had another weak performance after leading jobs indicators missed expectations. The ADP report printed a meager 153K gain versus the projected 171K figure and the earlier 215K increase while the jobs component of the ISM non-manufacturing PMI showed a slide. Challenger job cuts rose 42% in December, its fastest rise since September 2015. All eyes and ears are on the NFP today and a 175K rise in hiring is eyed while average hourly earnings could tick up by 0.3%.

EUR

The euro took advantage of dollar weakness but was no match to yen or comdoll strength. Medium-tier reports from the region were still upbeat but the uncertainties looming ahead of the French and German elections, as well as Italy's banking troubles, prevented the shared currency from making gains across the board. German factory orders and retail sales data are due today.

GBP

The pound also advanced against the dollar but failed to hold on to its gains against the rest of its peers even after seeing strong UK data. Services PMI also beat expectations with a rise from 55.2 to 56.2 instead of falling to 54.8. There are no reports due from the UK economy today.

CHF

The franc was able to chalk up a positive day, as it advanced to the dollar and the European currencies. Swiss CPI came in line with expectations of a 0.1% dip in price levels while today has the SNB foreign currency reserves data due, which might reveal whether or not the central bank is intervening in the currency market.

JPY

The yen continued to gain ground against its peers as investor jitters can be felt all over the globe. To top it off, the yen is regaining some of its lost profits to the dollar now that traders are doubting that the Fed can stick with its plan of hiking rates thrice this year. Japanese average cash earnings printed a 0.2% uptick as expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as they consolidated to the yen but racked up some wins to the dollar. Australia's trade balance beat expectations with a 1.24 billion AUD surplus. Canada is set to print its jobs numbers today and a 5.1K drop in employment is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 09, 2017)

USD

The US dollar gave up a bit of ground when the actual December NFP reading fell short of estimates, posting a 158K gain versus the projected 175K increase. However, the currency held fast and advanced later on as traders got wind of upward revisions in the November report and realized that the pickup in the jobless rate was due to higher labor force participation. Average hourly earnings also beat expectations with a 0.4% rise versus the estimated 0.3% uptick. The Fed's labor market conditions index is up for release today.

EUR

The euro continued to climb against its peers even though data came in mixed. German factory orders fell 2.5% as expected while retail sales slipped 1.8% versus the projected 0.8% decline. German industrial production and trade balance are due today, along with the region's Sentix investor confidence index and unemployment rate.

GBP

The pound resumed its slide against most of its peers as there were no reports to keep it supported and traders shrugged off the upside surprises in PMIs earlier in the week. UK Halifax HPI is due today and a 0.3% rise in house prices is expected, although traders are likely to pay more attention to Brexit-related headlines.

CHF

The franc was in a weak spot against most of its peers, except against the British pound. Swiss foreign currency reserves ticked lower, easing fears that the the SNB is intervening in the currency market. Swiss retail sales data is up for release today and a 0.4% year-over-year rebound is eyed.

JPY

The yen was also on weak footing as risk appetite appeared to improve and traders revived their love for the dollar. Japanese banks are closed for the holiday today so traders could continue to react to market sentiment in trading yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the strongest performers towards the end of the week, particularly the Loonie which was lifted by strong Canadian jobs data. The economy added 53.7K jobs in December instead of losing 5.1K jobs while the trade balance turned into a 0.5B CAD surplus instead of printing a 1.6B CAD deficit. The Ivey PMI also beat expectations by rising from 56.8 to 60.8 versus the 56.0 consensus. The BOC Business Outlook Survey is due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 10, 2017)

USD

The US dollar was unable to establish a clear direction in recent sessions as US data came in mixed. Consumer credit showed strong gains in November while the Fed's labor market conditions index slumped back to negative territory at -0.3. JOLTS job openings data and NFIB small business index are lined up today.

EUR

The euro advanced to the dollar, slumped against the yen, and consolidated against the commodity currencies. Data from the region has also been mixed as German trade balance and Sentix investor confidence beat expectations while German industrial production and Italy's unemployment rate fell short. For today, French industrial production data is due and a 0.5% rebound is eyed.

GBP

The pound was the weakest of the bunch as Brexit-related headlines weighed on the currency. Over the weekend, PM May hinted that they're willing to forego access to the single market in exchange for closing UK borders while Chancellor Hammond reiterated their plans to conclude Brexit talks by April 2019. Halifax HPI beat expectations with a 1.7% gain and the BRC retail sales monitor posted a stronger 1.0% gain.

CHF

The franc tossed and turned against the dollar but was able to rake in strong gains against the pound. Swiss retail sales came in stronger than expected with a 0.9% gain versus the projected 0.4% uptick and earlier 0.7% drop. Swiss jobless rate is due today and no change from the earlier 3.3% reading is eyed.

JPY

The yen was one of the strongest performers as it took advantage of the selloff in higher-yielding currencies. Japanese banks were closed for the holiday yesterday while today has the consumer confidence index on tap. A climb from 40.9 to 41.3 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to hold on to their gains in recent sessions, giving up ground against the Japanese yen. Crude oil took a hit while Australia reported a smaller than expected 0.2% gain in retail sales versus the projected 0.4% increase. Chinese CPI came up short with a 2.1% gain instead of the 2.2% figure but PPI beat expectations at 5.5% versus 4.6%. Canadian building permits and housing starts are due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 11, 2017)

USD

The dollar had a mixed performance as economic data did very little to provide strong direction. JOLTS job openings came in at 5.52M, up from the downgraded 5.45M reading in October but short of the estimated 5.59M figure. The NFIB small business index showed a strong climb from 98.4 to 105.8. There are no major reports due from the US today.

EUR

The euro was able to advance against the dollar but weakened against most of its major counterparts. French industrial production data beat expectations with a 2.2% gain versus the projected 0.5% uptick. There are no reports lined up from the region today.

GBP

The pound was able to make a quick bounce against most of its rivals, as Brexit headlines took the back seat. UK BRC retail sales monitor printed a sharper 1.0% gain versus the earlier 0.6% uptick. UK manufacturing production and goods trade balance figures are lined up today, with the former slated to show a 0.6% rebound and the latter likely to print a wider 11.2 billion GBP deficit.

CHF

The franc was mostly weaker even though the Swiss jobless rate came in line with expectations at 3.3%. There are no reports due from the Swiss economy today so the franc could take its cue from country-specific data.

JPY

The yen continued to rake in gains against its peers as the Japanese currency took advantage of the slowdown in dollar demand. Japanese consumer confidence data improved from 40.9 to 43.1 and leading indicators are due today.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was bogged down by weak crude oil prices on expectations of higher US inventories. Building permits and housing starts printed mixed results as well. Australian retail sales printed a slower 0.2% gain versus the projected 0.5% rise while Chinese CPI fell short of estimates. EIA crude oil inventories data lined up today could push Loonie pairs around once more.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 12, 2017)

USD

The US dollar staged a sudden selloff when President-elect Trump delivered his first press conference during which he focused on a number of issues such as Russia's election hack, drug overpricing, and Mexico's automobile industry among many others but failed to share more fiscal policy details. US initial jobless claims and speeches by FOMC members Evans and Harker are lined up.

EUR

The euro had a mixed performance as it advanced to the dollar but weakened against most of its rivals. There have been no major reports out of the region yesterday but Brexit headlines dampened the outlook for the bloc. French final CPI and euro zone industrial production numbers are on tap today and strong figures could spur a rebound. ECB minutes are also due.

GBP

The pound was still one of the weakest performers even after BOE Governor Carney highlighted upbeat economic data and mentioned that the Brexit might not be the biggest risk to stability. UK data turned out mixed, as manufacturing production beat expectations with a 1.3% gain versus the projected 0.6% uptick while goods trade balance printed a wider 12.2 billion GBP deficit. There are no major reports lined up from the UK today.

CHF

The franc took advantage of dollar weakness but tossed and turned against its European counterparts. There were no reports out of Switzerland yesterday and none are due today so the franc could continue to react to country-specific updates or market sentiment.

JPY

The yen raked in more gains against its peers as the dollar's slide left the Japanese currency as the more appealing safe-haven. Japan's bank lending data and current account balance also came in stronger than expected, following the improvement in leading indicators and reminding traders of the BOJ's GDP upgrade.

Commodity Currencies (AUD, NZD, CAD)

The comdolls rallied against the dollar and the European currencies even as US crude oil inventories reflected a larger than expected buildup of 4.1 million barrels. In New Zealand, commodity prices picked up by 0.7% in December. There are no major reports lined up from the commodity currencies.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 13, 2017)

USD

The US dollar continued to slide as investors priced in concerns about the Trump presidency. Economic data was better than expected while FOMC voting members reaffirmed their rate hike time line and mostly upbeat assessment of the economy. US retail sales, PPI, and UoM consumer sentiment data are up for release today.

EUR

The euro was also in a weak spot against most of its peers, particularly the commodity currencies, but was on stronger footing against the pound. Italian industrial production beat expectations and so did the region's report but investors are wary of the potential Brexit repercussions on the EU if the UK is kicked out of the single market.

GBP

The pound continued to tumble across the board as traders pared their risk ahead of PM May's testimony today. There were no major reports out of the UK yesterday and the BOE credit conditions survey is lined up today. BOE member Haldane also has a testimony scheduled.

CHF

The franc strengthened against the dollar and its European rivals as risk aversion came into play. There were no reports out of the Swiss economy yesterday and none are due today so market sentiment could push franc pairs around.

JPY

The Japanese yen had a mixed performance as it ended in the green against the euro and pound but was no match to comdoll strength. Japan's Economy Watchers sentiment index climbed from 48.6 to 51.4, higher than the estimated 49.3 figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the strongest performers in recent sessions, thanks to rising gold prices. China reported a smaller than expected trade surplus for January. The reading came in at 275B CNY versus the estimated 345B CNY figure and the earlier 298B surplus, dragged down by a sharper fall in exports.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 16, 2017)

USD

The US dollar was off to a strong start this week on risk-off vibes in the markets. Traders seem to be shrugging off the impact of Trump's first press conference but are still wary ahead of the inauguration later this week. US reports were mixed, as headline retail sales and PPI beat expectations while core figures fell short of consensus. US banks are closed for Martin Luther King Day today.

EUR

The euro gapped down to most of its counterparts to start the week as traders are anticipating more bearishness with all the catalysts lined up. Data from the euro zone was actually stronger than expected on Friday but Brexit-related fears seem to be dominating price action. Euro zone trade balance is due today and a wider 23.2 billion EUR surplus is eyed.

GBP

The pound also started the week lower against its peers as traders are bracing themselves for UK PM May's Brexit speech midweek. Any indication that a "hard Brexit" would be a possibility could send the currency crashing lower. BOE Governor Carney has a speech lined up today and he could attempt to shore up confidence in the UK economy.

CHF

The franc had a volatile run on Friday as it was also dragged down by the rest of its European peers. There were no reports out of the Swiss economy then and none are due today so the franc could be pushed and pulled by market sentiment and country-specific action once more.

JPY

The Japanese yen is taking advantage of the jitters in the European region, raking in gains against the euro and pound while gapping up against most of its counterparts. Over the weekend, Japanese data turned out mixed as core machinery orders posted a sharper than expected 5.1% fall while PPI showed a smaller than expected 1.2% drop. Tertiary industry activity data and preliminary machine tool orders figures are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls are still able to hold on to their gains despite the risk-off vibes, possibly supported by speculations that China is poised for stronger growth and the pickup in commodity prices. However, the Chinese trade balance turned out weaker than expected on Friday due to a larger fall in exports. Australia posted a 0.5% gain in its MI inflation gauge, higher than the previous 0.1% uptick, while New Zealand printed a 0.8% decline in FPI.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 17, 2017)

USD

Most dollar pairs were trading sideways as US traders were off on the Martin Luther King Day holiday. Traders are set to return to their desks today but only the Empire State manufacturing index is up for release, along with a speech by FOMC member Dudley.

EUR

The euro seems to be in a weak spot ahead of this week's events, particularly UK PM May's speech. Any indication that they're willing to give up access to the single market could also mean repercussions for the bloc's trade revenues. Euro zone trade balance already came in weaker than expected with a 22.7 billion EUR surplus while ZEW economic sentiment readings from Germany and the entire region are lined up today.

GBP

The pound was off to a poor start for the week in anticipation of "hard Brexit" talk from PM May. If she reiterates how they're willing to forego the single market in exchange for immigration controls, the UK currency could be in for another wave down. UK CPI readings are also up for release and gains in the headline and core figure are eyed, with BOE Governor Carney recently emphasizing that they have a limited tolerance for strong inflation.

CHF

The franc tossed and turned against the dollar while consolidating to the euro and advancing against the pound. The Swiss currency could serve as a safe-haven for European trades but investors are still wary of SNB intervention. There are no reports due from the Swiss economy today.

JPY

The yen continued to take advantage of risk-off moves as traders are shying away from the dollar on Trump's upcoming inauguration. Data from Japan has been in line with estimates, as the tertiary industry activity index printed a 0.2% uptick while the preliminary machine tool orders report saw a 4.4% rebound. Revised industrial production data is lined up next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls held on to most of their recent gains, thanks to rising commodity prices. New Zealand's NZIER business confidence index improved from 26 to 28 while new home loans in Australia posted a stronger than expected 0.9% gain. New Zealand's GDT auction is due next and a pickup in dairy prices could spur more Kiwi gains.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 18, 2017)

USD

The dollar weakened to most of its counterparts as Fed rhetoric, weak data, and Trump jitters were in play. The Empire State manufacturing index fell from 9.0 to 6.5, lower than the 8.1 consensus, while FOMC member Dudley cast doubts on the Fed's rate hike time line. For today, FOMC member Kashkari and Fed head Yellen have testimonies lined up.

EUR

The euro carried on with its slide against its forex counterparts as ZEW economic sentiment readings came in weaker than expected. In Germany, the reading rose from 13.8 to 16.6, short of the estimated improvement to 18.9 while the region's figure ticked up from 18.1 to 23.2. Euro zone final CPI readings are due today.

GBP

The pound erased a lot of its earlier losses so far this year when PM May took the stage and reassured market watchers that the UK can emerge stronger from Brexit. To top it off, UK CPI readings beat expectations as the headline and core figures rose to 1.6%. Claimant count change is due today and a 4.6K increase in joblessness is eyed, but a faster pace of growth in average earnings could still keep the pound propped up.

CHF

The franc rallied against the dollar but gave up ground to the pound in recent sessions. There were no reports out of Switzerland then and none are due today so the currency could keep reacting to country-specific events.

JPY

The yen continued to advance against the dollar and most of its rivals, except against the pound. Japan's industrial production reading was unchanged at 1.5% as expected. There are no reports due from Japan today but the yen might continue to benefit from anti-USD sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls fell victim to pound strength but managed to hold on to their wins against the euro and the dollar. New Zealand reported a 0.6% rebound in dairy prices during the latest auction. The BOC statement is due today and upgraded forecasts could mean more gains for the Canadian dollar.


By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 19, 2017)

USD

The US dollar made a strong comeback in the forex arena, buoyed by upbeat data and hawkish remarks from Fed head Yellen. CPI and industrial production reports came in line with consensus while Yellen praised the economy for moving closer to achieving the Fed's dual mandate of 2% inflation and full employment. She also mentioned that not hiking soon enough could force the Fed to tighten too aggressively, which increases the odds of a recession. Initial jobless claims, building permits and housing starts, and the Philly Fed index are all due today.

EUR

The euro gave up ground to the dollar but advanced against the yen, Kiwi, and Loonie. Final CPI readings in the region were unchanged at 1.1% for the headline figure and 0.9% for the core figure. The ECB statement is coming up today and traders are interested to find out if the central bank is looking to taper its stimulus program anytime soon, given the recent improvements in data.

GBP

The pound continued to advance against most of its peers when UK jobs figures surpassed expectations. The economy saw a 10.1K drop in joblessness instead of the estimated 4.6K increase in claimants. The previous reading was also upgraded while the average earnings index indicated a faster pace of wage growth at 2.8%. There are no major reports due from the UK economy today.

CHF

The franc gave up ground to the dollar but managed to hold on to its lead against the pound and euro. There were no reports out of Switzerland yesterday while today has the PPI on tap. An increase of 0.2% in producer prices is eyed, stronger than the earlier 0.1% uptick.

JPY

The yen was mostly weaker, except against the Loonie, as traders flocked back to the US dollar. There were no major reports out of the Japanese economy yesterday and none are due today so market sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly able to stay resilient, except for the Loonie when the BOC statement took place. Governor Poloz mentioned that a rate cut is still a possibility if downside risks materialize, particularly when it comes to US tax changes and Trump's fiscal policy plans. Australia reported a higher than expected 13.5K increase in employment and an improvement in its participation rate. Crude oil inventories and Canadian manufacturing sales data are lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 20, 2017)

USD

The US dollar failed to establish a clear direction in recent trading as it initially rallied on upbeat data but soon gave up its intraday gains. The Philly Fed index, initial jobless claims, and housing starts figures came in better than expected but traders seem wary of Trump's inauguration later on in the day. Additional volatility could be in play and profit-taking ahead of the event could take place.

EUR

The euro had a sharp selloff after the ECB statement as Draghi clarified that the recent pickup in inflation was merely spurred by higher energy costs and not indicative of strong underlying pressures. He also repeated that policymakers haven't discussed QE tapering yet and that there are risks from Brexit and Trump. There are no reports due from the euro zone today.

GBP

The pound continued to advance against most of its counterparts even though there were no major reports out of the UK yesterday. Traders seem to be assured by UK PM May's testimony and recent upside data surprises. UK retail sales data is due today and a 0.1% dip in price levels is expected.

CHF

The franc continued to consolidate to the euro but gave up ground to the pound. Swiss PPI came in line with expectations of a 0.2% increase, signaling some upside inflationary pressures. There are no reports due from Switzerland today so the franc could be driven by market sentiment.

JPY

The yen was mostly weaker compared to its counterparts, except for the Canadian dollar. There have been no major reports out of Japan yesterday so country-specific events pushed yen pairs around. There are still no reports due from Japan today but the pickup in risk appetite stemming from upbeat Chinese data seems to be keeping a lid on yen gains.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi managed to hold on to their lead, thanks to Chinese reports coming in mostly in line with estimates. The economy expanded by 6.8% versus 6.7% in Q4 while retail sales picked up and industrial production lagged slightly. Australia's jobs figures also beat expectations but rising crude oil stockpiles dampened the Loonie's gains. Canadian CPI and retail sales figures are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 23, 2017)

USD

The US dollar continued to edge down against its counterparts even after Trump's inauguration, as investors remained wary of fiscal policy plans and changes in trade relations. After all, Trump did say that he plans on renegotiating NAFTA with Canada and Mexico. There are no major reports from the US economy today.

EUR

The euro recovered against most of its rivals on Friday even though there were no major reports out of the region. Today has the euro zone consumer confidence index on tap and no change from the previous -5 figure is eyed. ECB head Draghi has a testimony lined up and he might reiterate how the pickup in energy-based inflation might not be enough to prompt a discussion on tightening.

GBP

The pound also rebounded against its peers even though UK retail sales printed a dismal 1.9% slide versus the projected 0.1% dip. The sharp rise in price levels is likely taking its toll on consumer behavior, as this may have led households to trim purchases even during the holiday season. There are no reports due from the UK today.

CHF

The franc took advantage of dollar weakness but was stuck in consolidation against its European counterparts. There were no reports out of the Swiss economy on Friday and none are due today so the currency could take its cue from market sentiment and country-specific data.

JPY

The yen got back on its feet on Friday, due mostly to the selloff in the dollar and the rise in risk aversion. There were no reports out of the Japanese economy then while today has the all industries activity index due.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were able to advance to the dollar but the Loonie lagged as the BOC's dovish tone continued to dampen the currency's gains.To top it off, data from Canada turned out weaker than expected as headline CPI and retail sales came up short. Canada's wholesale sales report is due today and a 0.3% uptick is expected.

Dampened the Loonie's gains. Canadian CPI and retail sales figures are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 24, 2017)

USD

The US dollar was still a big loser in recent sessions as traders seemed hesitant to bet on the economy with Trump taking the lead. The new President has signed an executive order quitting TPP and halting federal hiring while discussing his plans to renegotiate NAFTA with Mexico and Canada. Treasury Secretary nominee Mnuchin warned against excessive USD appreciation which would be negative in the short term. US flash manufacturing PMI, existing home sales, and Richmond manufacturing index are due next but the spotlight is likely to stay on Trump.

EUR

The euro had a mixed performance as it advanced to the dollar and Loonie while sinking to the yen, Aussie, and Kiwi. There were no major reports out of the euro zone yesterday while today has the flash manufacturing and services PMIs on tap. A slight dip in the manufacturing sector is eyed while services could continue to pick up.

GBP

The pound also raked in some gains but its rallies were limited by the upcoming event risk. The UK High Court ruling on the need to secure parliamentary approval before invoking Article 50 is up for release today, and this could determine how long the UK economy will be in limbo. UK public sector net borrowing data is also due.

CHF

The franc kept advancing to the dollar but was still stuck in consolidation to the euro. There were no reports out of the Swiss economy yesterday while today also has an empty economic schedule, which suggests that the franc could react to country-specific events and overall market sentiment.

JPY

The yen remained the beneficiary of risk-off moves particularly during the Asian session. Data from Japan was better than expected today, as the flash manufacturing PMI climbed from an upgraded 52.4 figure to 52.8 to reflect a faster pace of industry growth instead of dipping to 52.3.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was the weakest of the bunch as Trump's plans to negotiate NAFTA could have repercussions on Canada's exports. Wholesale sales came in slightly below estimates with a 0.2% uptick versus the projected 0.3% gain. Australia's CB and MI leading indices are due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 25, 2017)

USD

The US dollar regained some ground in recent trading as data came in mostly stronger than expected and the S&P 500 index reached record highs. The flash manufacturing PMI rose from 54.3 to 55.1, higher than the projected 54.6 figure, while the Richmond manufacturing index also advanced. Existing home sales fell but this was mostly due to tighter inventory. There are no major reports due from the US today so traders could pay closer attention to Trump's moves.

EUR

The euro continued to advance against most of its peers as the UK High Court ruling eased some Brexit concerns. Also, euro zone reports came in mixed, with German flash manufacturing PMI and French flash services PMI beating expectations. German Ifo business climate is due today and a rise from 111.0 to 111.3 is expected.

GBP

The pound had a volatile time during the announcement of the UK High Court ruling but the decision to require parliamentary approval before invoking Article 50 proved to be bullish for the currency. This could give the government and lawmakers time to iron out their negotiation game plan before debating with EU officials. UK public sector borrowing data also indicated improving financial conditions. CBI industrial order expectations is due today.

CHF

The franc edged slightly lower against the euro and the pound as risk appetite improved and the dollar stabilized. There were no reports out of the Swiss economy yesterday while today has the UBS consumption indicator on tap. Any decline from the earlier 1.43 figure could push the franc lower.

JPY

The yen gave up a lot of its recent gains when demand for the dollar returned. Japanese flash manufacturing PMI and trade balance came in stronger than expected. The surplus narrowed from 0.47T JPY to 0.36T JPY but this was better than the projected 0.22T JPY reading.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up some of their recent gains to the dollar but the Loonie managed to stay resilient as Trump signed the executive order for the Keystone XL pipeline construction. This could shore up demand for Canada's energy resources, which would support growth and hiring. In Australia, the quarterly CPI missed estimates with a 0.5% uptick versus the projected 0.7% increase. US crude oil inventories data is due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 26, 2017)

USD

The US dollar failed to benefit from the strong rallies in equities, even as the Dow 30 index surged past the 20K mark. Risk appetite appears to be returning and shoring up demand for higher-yielding currencies. Only the crude oil inventories report was printed from the US economy yesterday while today has initial jobless claims, goods trade balance, flash services PMI, and new home sales due.

EUR

The euro continued to advance against most of its peers even though data from the region came in weaker than expected. The German Ifo business climate index printed a surprise drop from 111.0 to 109.8 versus the projected rise to 111.3. As it turns out, German manufacturers are less optimistic about current and future business conditions in the country, possibly due to Brexit concerns. Spanish unemployment rate, German GfK consumer climate index, and Italian retail sales are lined up today.

GBP

The pound was one of the strongest performers of the bunch as it continued to rally on the heels of the UK High Court ruling. Also, UK CBI industrial order expectations rose from 0 to 5, higher than the projected reading at 2. The UK preliminary GDP reading is due today and 0.5% growth is expected for the fourth quarter of 2016. Stronger than expected data could assure traders that the UK is staying resilient even with Brexit risks.

CHF

The franc continued to tread carefully against the euro and dollar but it gave up more ground to the pound. The UBS consumption indicator showed an improvement from an upgraded 1.45 reading to 1.50 while Credit Suisse's economic expectations index also rose from 12.9 to 18.5. Switzerland's trade balance is due today and a narrower surplus is eyed.

JPY

The yen settled into consolidation against most of its rivals as traders are starting to feel stronger risk appetite. There have been no major reports out of the Japanese economy yesterday and none are due today so it could be all about market sentiment from here.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued its advance on reports that the Keystone XL pipeline might commence construction soon, shoring up demand for Canada's energy resources. However, gains were limited as the US crude oil inventories report showed a larger buildup in stockpiles. In New Zealand, the Q4 CPI beat expectations with a 0.4% uptick versus the projected 0.3% increase. Australia's banks are closed for the holiday today.

By Kate Curtis from Trader's Way