Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Dec 08, 2017)

USD

The US dollar stayed strongly supported for the most part of the day thanks, in part, to Congress' moves to avert a government shutdown. US equities also closed in the green. Data was mixed, with the Challenger job cuts report showing a 30.1% year-over-year gain for November and initial jobless claims beating expectations. Consumer credit also advanced, signaling financial optimism.The NFP is expected to show a 198K gain in hiring for November, down from the previous 261K increase. Average hourly earnings could recover by 0.3% after staying flat in the previous month, with positive wage growth likely funneling to upside inflationary pressure later on.

EUR

The euro caught a few gains then consolidated for most of the day. Data was actually weaker than expected, with German factory orders down 1.4% instead of rising by 0.9% and the French trade balance posting a larger than expected deficit. The region's final GDP reading was unchanged at 0.6%. German trade balance and French industrial production data are due next.

GBP

The pound had a shaky ride during the earlier sessions before catching a bid on positive Brexit developments. The EU Commissioner shared that progress is being made while May's rush to Brussels for an early meeting also fueled hopes that a deal will be reached. EU President Tusk scheduled an announcement for the morning as well, so bulls are holding on to their hopes. UK manufacturing and industrial production numbers are also due.

CHF

The franc was stuck in consolidation at sentiment flipped back and forth, particularly in the European region. The Swiss jobless rate improved from 3.1% to 3.0% while the SNB foreign currency reserves declined from 742B CHF to 738B CHF, which means that the central bank is probably not trying to actively depreciate the currency. There are no reports due from Switzerland today.

JPY

The yen lost ground as the dollar regained its spot as the preferred safe-haven. Data from Japan was actually mostly upbeat, with the GDP upgraded from 0.3% to 0.6% versus the projected 0.4% figure and the current account balance also surpassing estimates. Average cash earnings disappointed with a 0.6% uptick versus the projected 0.8% rise. Yen pairs could take their cue from dollar price action from here.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the dollar but were able to recover slightly against the yen. Data from Canada was mixed as building permits posted a stronger than expected 3.5% gain while the Ivey PMI dipped. Chinese trade balance is due next and a smaller surplus of $34.9 billion is eyed, possibly signaling weaker demand for raw materials.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 11, 2017)

USD

The US dollar staged a good rally against most of its counterparts last week on tax reform progress and a bit of risk aversion. The US economy added 228K jobs in November according to the NFP report, higher than the projected 198K figure. Average hourly earnings turned out weaker than expected, with a downgrade in the earlier report to boot. There are no major reports due today, leaving traders to price in expectations ahead of the FOMC decision and top-tier data releases, such as CPI and retail sales, later this week.

EUR

The shared currency was able to hold on to its gains and go for a few more on Friday, even as medium-tier data turned out mixed. The German trade balance showed a smaller than expected surplus but French industrial production saw a 1.9% gain instead of the projected 0.1% dip. Only the Italian retail sales is due today.

GBP

The pound was able to stage a strong rally before pulling back as the Brexit deal was announced. There are still plenty of questions left unanswered, but it seems that the deal was able to provide some reassurance. UK manufacturing and industrial production simply came in line with expectations. There are no major reports due from the UK today so the focus could remain on Brexit negotiations.

CHF

The franc regained ground on Friday as risk aversion stayed in play. There were no major reports out of the Swiss economy then and none are due today, so risk sentiment could continue to push franc pairs around.

JPY

The yen was in a weak spot as most traders placed their safe-haven bets on the dollar instead. Reports from Japan over the weekend were also in the red, with the BSI manufacturing index falling short of the estimated gain to 10.1. Preliminary machine tool orders are due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed run as they fell to the dollar but advanced to most of their other counterparts. Over the weekend, Chinese PPI reportedly sank from 6.9% to 5.8% as expected while CPI fell short of estimates. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 12, 2017)

USD

The US dollar was off to a weak start for the day as risk appetite weighed on the safe-haven currency. However, rising US bond yields and positioning ahead of this week's events allowed the currency to recover later in the day. JOLTS job openings fell from 6.18M to 6.00M versus the 6.03M forecast. US PPI data are due today, with the headline reading slated to show another 0.4% gain and the core figure to show a 0.2% uptick.

EUR

The euro was mostly stuck in consolidation as traders might be holding out for Draghi's speech later today. Italian retail sales turned out weaker than expected with a 1.0% drop versus the projected 0.1% dip. ZEW economic sentiment readings from Germany and the region are up for release today, with the former expected to dip from 18.7 to 17.9 and the latter to fall from 30.9 to 30.2.

GBP

The pound was still in a weak spot as traders didn't seem to impressed by the details of the Brexit deal and focused on remaining uncertainties. UK CPI is due today, with the headline figure projected to hold steady at 3.0% and the core reading also to stay unchanged at 2.7%. Underlying data such as PPI and RPI could also dictate the pound's direction.

CHF

The franc gave up a bit of ground to some of its peers as risk appetite improved for most of the trading sessions. There were no reports out of the Swiss economy then and none are due today, which suggests that market sentiment and currency-specific factors could push franc pairs around.

JPY

The yen was in a weak spot on risk-taking and a stronger dollar. Japan's PPI turned out better than expected with a gain from 3.4% to 3.5% versus the estimated drop to 3.3%. The tertiary industry activity index is due next and a 0.2% rebound from the earlier 0.2% dip is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi got a strong boost from the appointment of new RBNZ head Orr while the Loonie was bogged down by falling oil prices on the heels of another gain in US oil rigs. In Australia, the HPI fell by 0.2% versus the estimated 0.6% gain while the NAB business confidence index dropped from 9 to 6.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 13, 2017)

USD

The US dollar crawled slowly higher, drawing support from positive FOMC expectations and more progress in tax reform. Senator Coryn suggested that they are making progress and could get the deal done before Christmas but Senator Rand signaled that he won't be voting for the tax bill. US PPI turned out stronger than expected, with the headline figure up another 0.4% while the core reading posted a higher 0.3% gain. CPI readings are due next but the Fed's updated economic projections during their statement could take center stage.

EUR

The euro retreated against most of its counterparts as ECB head Draghi did not sound as hawkish as expected in his speech. Euro zone data also turned out weaker than expected, with the German ZEW index down from 18.7 to 17.4 versus the 17.9 consensus and the region's figure down from 30.9 to 29.0. German final CPI and WPI are lined up, ahead of the region's employment change and industrial production numbers.

GBP

The pound jumped upon seeing stronger than expected inflation reports but quickly retreated. Headline CPI is up from 3.0% to 3.1% instead of holding steady as expected and core CPI is steady at 2.7%. PPI was also stronger than expected but RPI and HPI fell short. Jobs data is due next and a smaller gain of 0.4K claimants is eyed compared to the earlier 1.1K increase. Also, the average earnings index is projected to advance from 2.2% to 2.5% to reflect stronger wage growth and more upside inflationary pressure.

CHF

The franc had a mixed run as it reacted to currency-specific factors. The currency was higher against the euro but caved to the comdolls as there were no reports from Switzerland yesterday. There are still no reports lined up today so market sentiment could push the franc around.

JPY

The yen was in a weak spot as the dollar took most of the safe-haven flows. Japanese core machinery orders turned out stronger than expected with a 5.0% gain versus the estimated 3.1% increase. There are no other reports due from Japan next so the yen could take its cue from bond yields and dollar price action.

Commodity Currencies (AUD, NZD, CAD)

The Aussie raked in more gains thanks to higher gold prices while the Loonie drew a bit of a lift from stronger oil on the heels of another pipeline shutdown. Australia's Westpac consumer sentiment index also posted an impressive 3.6% rebound after the earlier 1.7% drop. In New Zealand, the appointment of next RBNZ head Orr turned out bullish for the currency. There are no major reports from the comdolls today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 14, 2017)

USD

The US dollar took hits from downbeat CPI data, profit-taking during the FOMC statement, and Yellen's presser. Core CPI missed forecasts by posting a meager 0.1% uptick versus the estimated 0.2% gain. The FOMC statement was a bit more positive on jobs and inflation but it was Yellen's remarks downplaying price gains and tax cuts that led to more losses. US retail sales figures are also lined up today, with the headline figure slated to show a 0.3% gain and the core reading likely to show a much stronger 0.6% increase.

EUR

The euro took advantage of dollar weakness but was still shaky against the commodity currencies. Euro zone reports were mixed and today's ECB decision could lead to big moves. Medium-tier data from the euro zone has been mixed since the last decision but inflation has ticked higher, so many are expecting some clues on tightening for next year.

GBP

The pound managed to hold some ground despite weak jobs data. Claimants increased by 5.9K versus the projected 3.3K gain in joblessness while the unemployment rate was unchanged at 4.3% instead of improving to the projected 4.2% figure. Average earnings improved from 2.3% to 2.5% as expected, though. The BOE decision is lined up today and could also mean extra volatility for pound pairs.

CHF

The franc was able to regain a bit of ground as traders were more cautious ahead of the top central bank events. There were no reports out of the Swiss economy then while today has the PPI and the SNB decision. No actual rate changes are eyed and the central bank might refrain from jawboning this time.

JPY

The yen also took advantage of risk aversion and dollar weakness, even as there were no major reports out of Japan. Today has the revised industrial production numbers lined up but the yen could continue to take its cue from global bond yields and risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie continued to be the strongest performer of the bunch, getting a boost from rising gold on risk aversion and a less dovish RBA earlier on. The Loonie was in a weak spot as crude oil barely got a boost from a larger than expected draw in EIA stockpiles. Australia's jobs report turned out stronger than expected with a 61.6K jump in hiring.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 15, 2017)

USD

The US dollar had a mixed run as it reacted to other currency-specific factors. Data turned out stronger than expected as headline retail sales rose 0.8% versus the estimated 0.3% gain while the core reading posted a 1.0% jump versus the estimated 0.6% increase. Import prices posted the projected 0.7% gain while the flash manufacturing PMI also beat consensus. Industrial production and capacity utilization numbers are lined up, along with the Empire State manufacturing index.

EUR

The euro tumbled during the ECB decision and presser even as the central bank upgraded growth and inflation forecasts. Draghi refrained from dropping any hints on interest rate hikes, which left bulls disappointed. Euro zone trade balance is due next and a smaller surplus of 24.4 billion EUR from the earlier 25 billion EUR is eyed.

GBP

The pound was also in a weak spot following the BOE decision as policymakers had a unanimous vote to keep rates and asset purchases unchanged. The central bank cited Brexit as a risk in their economic outlook. Only the BOE quarterly bulletin and a speech by MPC member Haldane are lined up from the UK today.

CHF

The franc had another mixed run as the currency reacted to market sentiment and currency-specific factors. The SNB kept policy unchanged and reiterated that the franc remains overvalued but stopped short of intervention threats. There are no reports due from the Swiss economy today so sentiment could be the driving factor.

JPY

The yen was able to regain some ground to the euro, pound, and Kiwi. The Tankan report had mixed results, with the manufacturing index up from 22 to 25 versus the consensus at 24 and the non-manufacturing component steady at 23 instead of improving to the consensus at 24. There are no other reports lined up from Japan so sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie got a bit of a boost from Poloz's testimony as the central bank head mentioned that there is less need for stimulus for the Canadian economy. He still warned of several uncertainties, including youth unemployment, but appeared overall confident in his outlook. There are no other reports lined up from the comdoll economies.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 18, 2017)

USD

The US dollar regained a lot of ground on Friday despite weaker than expected reports. The Empire State manufacturing index fell from 19.4 to 18.0 instead of the estimated dip to 18.8 while industrial production saw a smaller than expected gain of 0.2% versus the estimated 0.3% uptick. Only the NAHB housing market index is due today.

EUR

The euro regained a bit of ground on Friday as sellers booked profits off their post-ECB short positions. The central bank did upgrade growth forecasts after all and could maintain their hawkish stance for the next few months. Euro zone trade balance came in weaker than expected, though, and final CPI readings are due today.

GBP

The pound slumped against most of its peers towards the end of the week even though there were no reports out of the UK then. Today has the CBI industrial order expectations index and a dip from 17 to 14 is eyed to reflect slower demand. Traders could also keep close attention to Brexit updates for the rest of the day.

CHF

The franc had a mixed run as the lack of top-tier events kept risk sentiment and currency-specific factors in play for Friday. Today's economic schedule is still empty for Switzerland so franc pairs could simply take their cues from the same factors.

JPY

The yen continued to slide against its counterparts as risk-off flows went to the dollar instead. The Tankan survey printed mixed results while the trade balance released over the weekend turned out better than expected. There are no reports due from Japan today so sentiment and currency-specific factors could stay in control.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to most of their gains against their rivals as risk sentiment improved. There were no reports out of Australia, New Zealand, and Canada then and there are no major ones lined up today. The Aussie is currently supported by a less dovish RBA stance and rising gold prices while the Kiwi got a boost from the RBNZ head announcement.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 19, 2017)

USD

The US dollar had a rocky start but managed to end overall positive against most of its counterparts. The NAHB housing market index jumped from 69 to 74 instead of just merely advancing to the consensus at 70. Lawmakers are set to vote on the tax bill this week and Trump might be able to sign it into law by the end of the week if approved. US current account, along with building permits and housing starts, are lined up today.

EUR

The euro rallied and reversed as the Italian trade balance printed stronger than expected results but the final CPI readings were unchanged. Today has the German Ifo business climate index due and an uptick from 117.5 to 117.6 is expected.

GBP

The pound was also unable to hold on to most of its intraday gains, but it's worth noting that the CBI industrial order expectations index held steady at 17 instead of falling to 14. There are no major reports due from the UK today so the focus could remain on Brexit updates and how this could keep the future uncertain for UK businesses.

CHF

The franc was one of the bigger winners for the day as it even managed to chalk up gains to the dollar. There were no reports out of the Swiss economy then and none are due today so market sentiment and currency-specific action might still push franc pairs around.

JPY

The yen was trading a bit more carefully as traders are probably positioning ahead of the BOJ statement later this week. For today, there are no major reports lined up so yen pairs might wait for cues from market sentiment or currency-specific factors.

Commodity Currencies (AUD, NZD, CAD)

The Aussie remained supported as the RBA minutes indicated why the central bank was no longer as dovish as before, but weaker gold prices on risk-taking took back some of the currency's gains. Crude oil prices also stayed afloat on account of the recent pipeline shutdown. In New Zealand, the ANZ business confidence index improved slightly from -39.3 to -37.8.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 20, 2017)

USD

The US dollar was advancing ahead of the tax bill vote as housing data turned out stronger than expected. Building permits dipped 1.4% but landed higher than expected at 1.30 million versus the 1.27 million forecast. The current account deficit also posted a smaller than expected shortfall. However, even after the House voted to approve the tax reform bill, reports that another vote will need to be made on account of procedural conflicts with Senate forced the currency back down. Only the existing home sales report is due from the US today.

EUR

The euro got a strong boost on hawkish remarks from a couple of ECB officials then by the announcement that Germany will release more bonds next year. This drove yields higher even in other euro zone nations, propping the shared currency higher. Data was actually weaker than expected as the German Ifo business climate index fell from 117.6 to 117.2 versus expectations of it remaining unchanged. German PPI and euro zone current account balance are due next.

GBP

The pound was in a weak spot despite the lack of economic data as traders appear to be reducing their exposure for the next round of Brexit talks. BOE Governor Carney has a speech lined up today and could also spark additional volatility for pound pairs.

CHF

The franc gave up ground to most of its peers as risk-taking was in play and the euro appeared the preferred safe-haven bet. There were no major reports out of Switzerland yesterday and none are due today, so market sentiment and currency-specific factors could come into play.

JPY

The yen was also in a weak spot leading up to the BOJ decision later this week. There has been talk of a "reversal rate" by Governor Kuroda, prompting speculations that the central bank might also start unwinding stimulus at some point. Still, US bond yields have kept a lid on yen gains so far.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent gains on profit-taking and a few road bumps. New Zealand reported a 3.9% drop in dairy prices during the latest GDT auction while its current account and trade balance fell short of estimates. EIA crude oil inventories are due next, after the API reported another larger than expected draw. New Zealand quarterly GDP is also due.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 21, 2017)

USD

The dollar has been on strong footing as the focus was on the tax bill vote, which managed to clear its way through even with a few road bumps. President Trump could sign the bill into law anytime soon, which would provide a strong boost to business activity and overall growth in the coming months. Initial jobless claims and the final GDP reading are due next.

EUR

The euro struggled to hold on to its recent gains, although it did manage to draw support from news that Germany will offer more bonds next year. This drove yields in the euro region higher, bolstering the shared currency as well. There are no reports due from the euro zone today.

GBP

The pound was mostly moving sideways as the lack of top-tier data and unease ahead of more Brexit talks kept gains in check. UK public sector net borrowing data is due today and a rise to 8.3 billion GBP is eyed.

CHF

The franc was still in a weak spot but managed to regain a bit of ground when the SNB Quarterly Bulletin was released. Today has the trade balance due and analysts expect a larger surplus of 2.88 billion CHF from the earlier 2.33 billion CHF figure.

JPY

The yen lost ground to most of its peers after the BOJ statement as the central bank simply sat on its hands and kept policy unchanged. There was not much hints on any unwinding of stimulus, dashing hopes of a "reversal rate" talk from the BOJ head earlier on. From here, market sentiment and global bond yields could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold on to most of their gains as risk-taking was in play. New Zealand's GDP came in line with expectations of a 0.6% expansion while the earlier figure enjoyed an upgrade to a 1.0% growth figure. Canada's CPI and retail sales data are due next and weak figures could undermine odds of BOC hikes next year.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 22, 2017)

USD

The dollar had a mixed run as currency-specific factors were in play and US data also turned out mixed. The final GDP reading for Q3 was downgraded from 3.3% to 3.2% while initial jobless claims also printed weaker than expected results. On the flip side, the Philly Fed index jumped from 22.7 to 26.2 versus the 21.5 forecast. The core PCE price index, along with personal spending and income data, are due today.

EUR

The euro returned some of its recent wins as there were no major reports from the region. The consumer confidence index ticked up from 0 to 1 instead of holding steady to reflect stronger optimism. German GfK consumer climate and French consumer spending figures are due next, and strong results could reinforce hawkish ECB expectations.

GBP

The pound consolidated to the yen and dollar while giving up ground to the commodity currencies. UK public sector net borrowing came in slightly better than expected at 8.1 billion GBP versus 8.3 billion GBP. Today has the current account balance and final GDP reading on tap, although traders' attention seems to be fixed on Brexit updates.

CHF

The franc had a mixed run as it mostly reacted to currency-specific factors. Swiss trade balance was weaker than expected at a surplus of 2.63 billion CHF versus the consensus at 2.84 billion CHF but still larger than the earlier 2.45 billion CHF surplus. The KOF economic barometer is due next but no changes to the 110.3 figure are eyed.

JPY

The yen was in a weak spot after the BOJ decision as the central bank kept monetary policy unchanged. Although this was widely expected, traders seemed disappointed that Governor Kuroda didn't have much to say on the "reversal rate" or unwinding of stimulus. Risk-taking was also bearish for the lower-yielding currency, along with global bond yields.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was one of the strongest performers of the day thanks to upbeat CPI and retail sales figures from Canada. Headline CPI rose 0.3% versus the 0.2% consensus while headline retail sales jumped 1.5% versus the 0.3% estimate, reviving hopes for more BOC hikes. Canada's monthly GDP is up next and a 0.2% expansion is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 27, 2017)

USD

The dollar has been on strong footing lately as Trump recently signed the tax bill into law. This would mean stronger business investment, consumer spending, and overall growth down the line, likely keeping tightening expectations in play. Only the CB consumer confidence index and the pending home sales report are due from the US today, and both are expected to show strong gains.

EUR

European banks have been closed on holidays for the first couple of days of the year and are set to reopen today. However, there are still no reports due and the next ones aren't out until Friday. These would be preliminary CPI readings from its top economies, set to shape expectations for the region's figures and monetary policy changes.

GBP

The pound was able to hold its ground against most of its counterparts when the EU issued its directives for Brexit, which included the two-year transition period. This could pave the way for easier adjustment, particularly for businesses in the UK. Banks will also reopen today and the UK High Street lending numbers are due.

CHF

The franc was unable to establish a clear direction as it mostly reacted to currency-specific factors. However, today has the UBS consumption indicator lined up, along with the Credit Suisse Economic Expectations report. Upbeat results could allow the franc to rally while a weak outlook could spur losses.

JPY

The yen gave up ground as bond yields favored the US dollar and other higher-yielders. Besides, the lack of tightening sentiment from the BOJ last week kept bulls disappointed. Japanese housing starts data are due today but sentiment could continue to push yen pairs around. Retail sales and industrial production are due in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The Aussie has been on a tear thanks to the RBA's less downbeat tune while the Loonie managed to recover its previous losses. Data from Canada has been mostly upbeat in the past week and crude oil remains supported. Crude oil inventories data due later in the week could push the Loonie around while Australia has its private sector credit data due.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 28, 2017)

USD

The US dollar continued to slide against its peers as data turned out mixed. Pending home sales posted a higher than expected 0.2% gain while the CB consumer confidence reading fell short of estimates. The index slipped from 128.6 to 122.1 versus the estimated 128.2 figure to reflect weaker optimism. Initial jobless claims, Chicago PMI, and preliminary wholesale inventories data are lined up next.

EUR

The euro advanced to the dollar but continued to slide against commodity currencies. There were no major reports out of the euro zone yesterday while today has the ECB Economic Bulletin due.

GBP

The pound ticked slightly higher to the dollar and yen but was also weaker against the comdolls. There were no reports out of the UK economy then while today has the High Street lending numbers due. A higher than expected read could be indicative of consumer confidence.

CHF

The franc had a mixed performance as it advanced to the dollar, consolidated against the yen and European currencies, then turned lower against the comdolls. The Swiss UBS consumption indicator ticked down from 1.68 to 1.67 and there are no major reports due today.

JPY

The yen reacted mostly to currency-specific factors on the lack of top-tier data earlier in the day. Freshly released are stronger than expected industrial production, which rose 0.6% versus 0.5%, and retail sales data, which posted a higher 2.2% gain versus the 1.1% consensus. BOJ core CPI is lined up next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the big winners for the day, particularly the Loonie which got a boost from higher crude oil prices. There were no reports out of the Australian or New Zealand economy. The US EIA crude oil inventories data is due next and a draw of 3.5 million barrels is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 29, 2017)

USD

The dollar was in a weak spot for the most part of the day as risk appetite was in play. Positive sentiment in relation to the tax reform package appears to have faded and traders are focused on the event risks. Also, data has been mostly weaker than expected, casting doubts on tightening next year.

EUR

The euro had a mixed run as medium-tier data barely provided any direction. German preliminary CPI and Spanish flash CPI are up for release next and strong readings could reinforce tightening expectations. Keep in mind that the ECB is due to taper in January so traders are looking out for rate hike clues.

GBP

The pound was mostly weaker to the commodity currencies for yet another day. Data was weaker than expected as High Street lending came in at 39.5K versus the estimated 40.6K figure. There are no reports from the UK economy today.

CHF

The franc reacted to currency-specific factors on the lack of major data from Switzerland. Earlier in the week, the UBS consumption indicator dipped while the Credit Suisse economic expectations index advanced. There are no reports due from Switzerland today, so the franc could take its cue from euro zone data or overall sentiment.

JPY

The yen was still in a weak spot as risk-taking came into play. Japanese figures were actually better than expected, with preliminary industrial production and retail sales both beating expectations. The BOJ core CPI was also strong at 0.6% versus the 0.5% consensus.

Commodity Currencies (AUD, NZD, CAD)

Comdolls were still in the green as rising commodity prices and generally positive risk sentiment buoyed the higher-yielding currencies. There were no major reports out of their economies recently, although Australia just printed a stronger than expected private sector credit figure.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook ( Jan 02, 2018)

USD
US banks were still closed for New Year's Day and are set to reopen today. Only the final manufacturing PMI reading is due, though, and no changes from the initial 55.0 figure are eyed. Other potential catalysts include updates on the tax reform package and overall market sentiment on the first trading day of the year.

EUR
The euro could also see a pickup in volatility as banks reopen today. Medium-tier reports namely Spanish and Italian manufacturing PMI, as well as the final manufacturing PMI readings from Germany and France, are up for release today.

GBP
The pound is starting the first trading day of 2018 with a bang as the UK manufacturing PMI is due. A dip from 58.2 to 58.0 is expected, though, and this would reflect a slower pace of industry expansion. The focus might remain on Brexit updates and how these could impact the economy in the coming months.

CHF
Swiss banks are still on a holiday today, which could mean either consolidation for the franc or sensitivity to currency-specific factors. The franc might also take its cue from medium-tier euro zone data.

JPY
The yen could continue to see further consolidation or risk flows as Japanese banks remain closed for the holiday. With that, there are no major reports lined up from Japan and the currency could respond more to global bond yields or sentiment.

Commodity Currencies (AUD, NZD, CAD)
The comdolls gave up some of their recent winnings towards the end of 2017 but could be off to a good start this year. However, Chinese PMI data released on December 31 printed a mixed picture, with a slight dip in manufacturing activity and an uptick in services. Caixin manufacturing PMI data is due today and a fall from 50.8 to 50.7 is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 03, 2018)

USD

The dollar was off to a shaky start as it simply picked up where it left off in 2017. Equities recorded a strong performance in anticipation of tax reform implementation, but the currency was more sensitive to policy biases and a fresh round of jitters from North Korea. The ISM manufacturing PMI is due today and analysts are expecting to see a dip from 58.2 to 58.1 to reflect a slower pace of expansion. Also due today are the FOMC meeting minutes for December, which might contain more insight on how the central bank could adjust policy in the year ahead.

EUR

The euro was able to sustain its lead on the heels of upbeat remarks from ECB member Coeure. Data was actually mostly weaker than expected as services PMI from the top economies fell short. Today has the Spanish unemployment change due and a 58.7K drop in joblessness is eyed. Germany is also set to print its jobs data and probably show a 13K decrease in unemployment.

GBP

The pound was also one of the best performers of the day, despite weaker than expected UK manufacturing PMI. The reading fell from 58.2 to 56.3 versus the estimated dip to 58.0 but it was the upbeat assessment of Markit that saved the day. Construction PMI is due today and a fall from 53.1 to 52.8 is expected.

CHF

The franc had a mixed run as it mostly reacted to currency-specific factors. Swiss banks were still closed for the holiday yesterday and will reopen today. The manufacturing PMI is due and a fall from 65.1 to 64.6 is eyed, reflecting a slower pace of industry expansion.

JPY

The yen took advantage of dollar weakness to chalk up a few more gains across the board. Traders also seem to be warming up to the idea that the BOJ might taper its QQE program later this year as well. Japanese banks are still closed for the holiday so there are no releases scheduled.

Commodity Currencies (AUD, NZD, CAD)

It was a rally and reverse day for the comdolls as they got hit by risk aversion in the earlier sessions then staged a bit of a rebound during the US hours. New Zealand reported a 2.2% rebound in dairy prices during the latest GDT auction while Canada had a stronger manufacturing PMI of 54.7 from the earlier 54.4 figure. China's Caixin manufacturing PMI also came in better than expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 04, 2018)

USD

The dollar was able to chalk up a winning day even after its shaky start this week as the FOMC minutes turned out less downbeat than expected. Several members confirmed that gradual rate hikes are in the cards, although many remained concerned about weaker inflation. Policymakers also suggested that strong jobs data could lift wages and price levels. The ISM manufacturing PMI turned out stronger than expected at 59.7, with an uptick in the prices component and a dip in the jobs figure. The ADP data is due next and a 191K increase in hiring is eyed, slightly higher than the earlier 190K gain.

EUR

The euro also took some hits as bond yields turned lower in anticipation of MiFID II. Data was stronger than expected, with both Germany and Spain printing better than expected jobs figures. Today has the final services PMIs from the top economies and positive revisions could be bullish for the shared currency.

GBP

The pound lost a bit of ground when the construction PMI also turned out weaker than expected. The reading fell from 53.1 to 52.2 instead of improving to 52.8. The services PMI is due today and an improvement from 53.8 to 54.1 is eyed. Net lending to individuals and mortgage approvals data are also lined up.

CHF

The franc was one of the weaker performers during the day as risk-taking during the latter trading sessions weighed on the currency. Swiss manufacturing PMI was actually better than expected as the reading ticked up from 65.1 to 65.2 instead of falling to 64.6. There are no reports due from the Swiss economy today so market sentiment could drive franc action.

JPY

The yen was off to a good start during the Asian and London sessions but wound up returning most of its gains to the dollar later on. Bond yields favored the US currency and led to a weaker yen as risk-taking continued. Japan's final manufacturing PMI was downgraded from 54.2 to 54.0.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was one of the strongest performers of the day while its peers followed closely behind. Crude oil staged another rally on another day of unrest in Iran and a larger than expected draw in API stockpiles. China reported a gain in its Caixin services PMI from 51.9 to 53.9 versus the 51.8 consensus. EIA crude oil inventories and Canada's underlying inflation figures are due.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 05, 2018)

USD

The dollar barely drew any support from upbeat leading jobs indicators. The Challenger job cuts report printed a 3.6% drop in layoffs, bringing the annual total of job cuts down to its lowest level since 1990. The ADP reading also beat expectations with a 250K gain versus the 191K figure, but the earlier reading was downgraded from 190K to 185K. The NFP report is due today and analysts expect an increase of 190K, slower than the earlier 228K gain.

EUR

The euro continued to advance against most of its peers on the heels of hawkish ECB rhetoric earlier in the week and a couple of upside surprises in medium-tier data. German retail sales, French preliminary CPI, and the region's flash CPI readings are up for release today. Another round of upbeat results could continue to stoke expectations of ECB rate hikes later this year, following their taper plans this month.

GBP

The pound wasn't too far behind as the UK currency was able to benefit from better than expected services PMI. The reading rose from 53.8 to 54.2, a notch higher than the 54.1 consensus. There are no major reports due from the UK today.

CHF

The franc was mostly weaker against its higher-yielding peers as risk-taking was in play. There were no reports out of the Swiss economy in the latest sessions and there are no reports due today, which suggests that franc pairs could keep moving in line with market sentiment or currency-specific factors.

JPY

The yen was also one of the weaker performers as risk-taking took its toll on the lower-yielding currency. Japan's final manufacturing PMI was downgraded from 54.2 to 54.0 to indicate a slower pace of industry growth. There are no reports due from Japan today, so the yen could be more sensitive to bond yields and dollar price action.

Commodity Currencies (AUD, NZD, CAD)

The Loonie got a boost from better than expected underlying inflation figures from Canada. Both the RMPI and IPPI posted strong upside surprises, signaling positive inflationary pressures down the line and shoring up BOC hike hopes. Earlier today, Australia printed a weaker than expected trade balance with a surprise deficit of 0.63 billion AUD instead of the estimated 0.55 billion AUD surplus.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 09, 2018)

USD

The dollar managed to rebound against most of its peers during the US session after a weak start earlier in the day. The S&P and Nasdaq continued their push for another round of record highs but the Dow closed in the red. FOMC members Bostic and Williams shared their views on the economy and warned of potentially weaker inflation weighing on rate hike prospects. Credit card spending leading up to the Thanksgiving holidays buoyed debt up from $20.5 billion to $28 billion in November while auto and student loans also ticked higher. Only medium-tier reports such as the NFIB Small Business index and JOLTS job openings data are due from the US today.

EUR

The euro returned most of its recent gains as traders worried about more words of caution in the ECB minutes due later in the week. Recall that the central bank upgraded their growth forecasts then but the announcement was seen as less hawkish than expected since it didn't contain much rate hike clues. Data from the region was actually stronger than expected, with retail sales up 1.5% versus 1.4% and the Sentix investor confidence up from 31.1 to 32.9 versus the consensus at 31.5.

GBP

The pound was able to hold its ground as the UK government started its cabinet reshuffle to strengthen its Brexit position. The Halifax HPI was weaker than expected with a 0.6% drop in prices versus the estimated 0.2% uptick while the BRC retail sales monitor posted another 0.6% gain. There are no other major reports from the UK today.

CHF

The franc weakened to most of its peers as risk-taking was in play during the latter trading sessions. Swiss CPI came in flat instead of posting the estimated 0.1% dip. Swiss jobless rate, foreign currency reserves, and retail sales are all due today and strong readings could also spur tightening expectations from the SNB.

JPY

The yen was in a weak spot as risk-taking came into play during the latter trading sessions. Japanese average cash earnings turned out stronger than expected with a 0.9% gain versus the projected 0.6% increase but the earlier figure was downgraded. The Japanese consumer confidence index is due next and a rise from 44.9 to 45.1 is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was the strongest of the bunch as it enjoyed a strong boost from the BOC Business Outlook Survey. Policymakers projected more sales activity but with some moderation, also highlighting the pickup in hiring and price levels. Australia's building approvals also beat expectations with a 11.7% gain versus the estimated 0.9% drop. Canadian housing starts data is due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jan 10, 2018)

USD

The dollar gave up ground as the yen advanced sharply in the earlier trading sessions, but the US currency was able to rebound as Treasuries hit record highs. Equities also continued their ascent in anticipation of a positive earnings season kicking off on Friday. US JOLTS job openings and NFIB Small Business Index both disappointed while import prices and final wholesale inventories data are due next.

EUR

The euro was able to hold its ground thanks to upbeat medium-tier data. German industrial production rose 3.4% versus the estimated 1.9% gain while their trade balance printed a larger surplus of 22.3 billion EUR versus the estimated 20.7 billion EUR and the earlier 19.7 billion EUR. French trade balance came in weaker than expected, though. French industrial production is due next, along with the German 10-year bond auction.

GBP

The pound struggled to stay afloat on the lack of major reports from the UK and fading sentiment from the cabinet reshuffle. Today's UK manufacturing production report could change that as analysts predict a stronger 0.3% increase compared to the earlier 0.1% uptick. The goods trade balance is also due and a larger deficit of 10.9 billion GBP from the earlier 10.8 billion GBP is eyed.

CHF

The franc continued to slide against most of its peers as data came in mixed. The unemployment rate held steady at 3.0% as expected but the earlier reading was negatively revised. Retail sales posted a better than expected 0.2% dip instead of the estimated 2.5% fall while foreign currency reserves ticked slightly higher from 738B CHF to 744B CHF. There are no other reports due from the Swiss economy today.

JPY

The yen was the start of the forex show as it jumped across the board when the BOJ reduced its JGB purchases. This revived taper hopes after officials hinted at exiting their aggressive stimulus program late last year. Data from Japan came in mixed, with average cash earnings up 0.9% versus the estimated 0.6% uptick and the consumer confidence figure slipping from 44.9 to 44.7 instead of improving to 45.1.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to score some wins against a few of their rivals but the rallies were limited as gold was weighed down by risk-taking and the Loonie didn't join in the crude oil rally. Canadian housing starts turned out weaker than expected while China's CPI fell short of estimates at 1.8% versus 1.9%. PPI was slightly better than expected at 4.9% versus 4.8% but still lower than the earlier 5.8% gain. EIA crude oil inventories are due next.

By Kate Curtis from Trader's Way