Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (November 26, 2013)

USD

The US dollar gave up some of its recent gains to its major rivals when pending home sales came in weaker than expected. The report printed a 0.6% decline for October even when analysts were projecting a 2.2% rebound from the previous 4.6% decline. This marked the report’s 6th consecutive monthly decline, which means that purchases were falling for half a year already. Up ahead, we have CB consumer confidence data and an improvement from 71.2 to 72.2 is eyed. A strong figure might mean more gains for the US dollar.


EUR

The euro chalked up losses against some of its counterparts yesterday when ECB official Hansson spoke of further rate cuts. There were no economic reports released from the euro zone yesterday and there are none lined up for today so it should be interesting to see whether remarks from more ECB officials could influence euro price action.

GBP

The pound was rejected at the 1.6250 level versus the dollar, as this minor psychological resistance lines up with the top of a long-term range. UK BBA mortgage approvals were weaker than expected at 42.8K versus the estimated 43.2K to 45.2K. Inflation report hearings are set for today and weaker inflation estimates could lead traders to believe that the central bank has room to ease if needed.

CHF

The franc was able to hold on to its recent gains, although it gave up a few against the US dollar. Swiss employment level was slightly better than expected at 4.20M, up from the previous 4.17M reading. There are no reports due from Switzerland today so it could be all about risk sentiment driving franc pairs and US data moving the USD/CHF pair.

JPY

The yen was able to recover against some of its major counterparts, as traders probably booked profits off some of their yen short positions. In addition, the release of the BOJ meeting minutes today revealed that some policymakers are concerned about downside price pressures. They also pointed out that there are plenty of risks to export growth, which might then weigh on overall economic performance later on. There are no other reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls still gave way to dollar strength, although AUD/USD and NZD/USD showed signs of retracing. RBA official Lowe noted that the Aussie is trading at historically high levels and did not rule out a central bank intervention. There are no reports due from Canada as the Loonie might keep reacting to falling oil prices. Meanwhile, New Zealand has its trade balance on tap for the next Asian trading session. A wider deficit is expected, which might then give RBNZ officials a chance to reiterate their views on the overvalued Kiwi.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (November 27, 2013)

USD

The US dollar gave up more gains yesterday when the US CB consumer confidence report printed weaker than expected results. The figure dipped from 72.4 to 70.4 instead of landing at the estimated 72.2 reading. This shows that consumers are less optimistic about the US economy compared to the previous month, hinting at a potential downturn in spending later on. For today, US durable goods orders data is up and the headline figure is projected to show a 1.5% decline while the core figure could print a 0.5% uptick. Strong figures could help the dollar recover while another round of weak data could push it lower. Also due today is the initial jobless claims report since the U.S. will be on Thanksgiving holiday tomorrow.

EUR

The euro continued to climb against its major counterparts yesterday, despite more talks of negative deposit rates. There were no reports released from the euro zone but it appears that confidence in Germany, which is the region’s largest and strongest economy, is helping to keep the shared currency afloat. German GfK consumer climate data is up for release today and the index is slated to tick up from 7.0 to 7.1.

GBP

The pound was unable to make any headway past the .16200 mark yesterday as a dovish BOE inflation report hearing weighed on the currency. Carney clarified that the 7% unemployment rate target was a threshold and not an automatic trigger for monetary policy tightening. In fact, other policymakers echoed his cautious sentiment in saying that the central bank isn’t close to unwinding policy just yet. They cited weak domestic and global demand, along with the slack in business production and wage growth, as reasons for their careful assessment of the economy. UK’s second GDP estimate is up for release today and no revisions are expected from the 0.8% growth figure. UK quarterly business investment data is also due.

CHF

The franc took advantage of dollar weakness yesterday, although there were no reports released to provide support for the Swiss currency. Swiss UBS consumption indicator is lined up for today and it could show an improvement from the previous 1.56 reading. If that’s the case, the franc could be able to extend its gains. Otherwise, a bounce for USD/CHF might be in the cards.

JPY

The yen’s rally found legs yesterday when the Nikkei ended lower in Asian trading. Risk aversion seems to have supported the lower-yielding Japanese currency, as there were no reports released from Japan then. For today, Japan’s schedule is empty once again so yen trading might be sensitive to risk flows and Asian equity performance.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar continued its tumble in the charts when news of another major hedge fund liquidating its Aussie positions convinced traders to short the Aussie as well. The New Zealand dollar was also dragged down by this bearish news, although their trade balance triggered a quick bounce in today’s early Asian trading. No other reports are due from the comdoll economies today so it might be all about risk flows driving these currencies.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (November 28, 2013)

USD

The US dollar gave up some gains on weak US data, as the durable goods orders figures were below expectations while the Chicago PMI printed a drop. However, the dollar was able to recover against most of its major counterparts when initial jobless claims came in strong and the UoM consumer sentiment figure was revised higher. There are no reports due from the US economy today as traders are off on their Thanksgiving holidays so it will be interesting to see whether profit-taking will trigger huge bounces among dollar pairs today.

EUR

The euro extended its climb against the dollar and the yen when the German GfK consumer climate report rose from 7.1 to 7.4 instead of just holding steady at 7.1 as expected. More data from Germany is up for release today, namely the employment figures and CPI. Medium-tier reports from large euro zone economies, such as Italy and Spain, are up for release today so a set of stronger than expected data might push EUR/USD and EUR/JPY higher.

GBP

The pound sustained its rallies in yesterday’s trading when the UK GDP was revised up from 0.8% to show 1.5% growth for the third quarter of the year. This was enough to push GBP/USD above its nearby resistance at 1.6200, signaling that more gains could be in the cards. However, CBI realized sales came in below consensus by falling from 2 to 1 instead of rising to 12. Up ahead, BOE Governor Carney is set to give a testimony and possibly reiterate that the central bank isn’t ready to unwind stimulus just yet.

CHF

The franc bounced back and forth against its counterparts as the Swiss currency was testing support levels. Only the UBS consumption indicator was released yesterday and it printed a small decline. For today, Swiss GDP is up for release and is expected to show a 0.5% growth figure. A weaker than expected reading might force the franc to let go of its recent gains but a strong report could push it to new highs.

JPY

The yen was able to stage a bit of recovery during the early trading sessions but gave up most of its gains to the dollar again during the US session. USD/JPY climbed past the 102.00 handle but appears to be making a pullback. There were no reports released from Japan then but earlier today we saw a 2.3% increase in retail sales, higher than the projected 2.2% figure but lower compared to the previous 3.0% reading. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls mostly gave up more ground to the dollar yesterday, as the downbeat sentiment continued to weigh on the Aussie and Kiwi. Data from Australia and New Zealand was actually strong today, as the ANZ business confidence report of New Zealand rose from 53.2 to 60.5 while Australia reported a strong jump in quarterl private capital expenditure. However, the bad news is that the previous report had a large downward revision. Canadian current account and medium-tier inflation figures are up for release later.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (November 29, 2013)

USD

The US dollar had a mixed performance, as it gained against the yen and comdolls but lost ground to the pound. There were no reports released from the US yesterday since banks were on Thanksgiving holiday and there are also no major reports lined up for this Black Friday, leaving the dollar at the mercy of risk sentiment.

EUR

The euro was able to push a bit higher against the dollar but it seems that EUR/USD’s rally is losing steam. Against the yen though, the euro packed in more gains and took advantage of the lower-yielding currency’s weakness. As for data, German jobs figures were weaker than expected as euro zone’s largest economy printed a 10K rise in unemployment. Import prices were also weaker than expected but CPI was stronger than consensus at 0.2%. German retail sales and French consumer spending figures are due today.

GBP

The pound carried on with its rallies yesterday as traders continued to buy the currency on the heels of a large upward revision in the UK’s GDP the other day. Although the BOE said that they’re not looking to tighten anytime soon, they did refocus their FLS scheme to smaller firms, which means that they are already confident that the larger lenders could survive without stimulus. For today, UK HPI is up for release along with net lending to individuals data.

CHF

The franc is making waves in the forex market as it is also being treated as a safe-haven alternative now that the yen is losing its appeal. AUD/CHF and NZD/CHF have been breaking down their support levels recently and appear ready for more losses. Swiss GDP came in line with consensus at 0.5%, which helped provide support for the currency. For today, the KOF economic barometer is up for release and it could show a climb from 1.72 to 1.82.

JPY

The yen continued to weaken against most of its counterparts, except for the commodity currencies. The BOJ’s commitment to keeping easing in place is weighing on the Asian currency, along with some gains in the Nikkei. The Japanese figures released today came in mostly weaker than expected, leading to more gains for yen pairs as traders anticipated more stimulus later on. Industrial production, jobless rate, and household spending were all weaker than expected.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were at the bottom of the pack yesterday, as downbeat sentiment for both Australia and New Zealand weighed on their currencies. Traders are waiting to see whether the central banks will intervene or not, so they are careful to establish long positions for these currencies. As for data, Australian private capital expenditure actually came in strong at 3.6% but was not enough to support the Aussie. Private sector credit, on the other hand, was weaker than expected. Canadian monthly GDP is up for release and a 0.1% uptick is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 2, 2013)

USD

The dollar pairs were relatively quiet on Black Friday as there was a lack of liquidity in the forex market back then. Over the weekend, some currency pairs gapped up as it appeared that traders have a stronger risk appetite, particularly for those currencies whose countries are performing well. There have been no reports released from the US last Friday and for today, we have a few red flags lined up. First is the speech by Fed head Bernanke, who might clarify whether a taper could take place this month or not. Another event to watch out for is the release of the ISM manufacturing PMI, which is slated to dip from 56.4 to 55.2.

EUR

The euro managed to hold steady on Friday but it appears to be losing ground at the start of this week. Data from the euro zone was mostly weaker than expected last Friday, as French consumer spending and German retail sales both missed expectations. For today, Spanish and Italian manufacturing PMI are up for release and another round of disappointments might trigger a stronger euro selloff.

GBP

The pound managed to extend its gains after a quick pullback on Friday. GBP/USD breached the 1.6400 handle at the start of this week’s Asian trading session, as traders banked on the fundamental strength of the UK economy. Data from the UK was actually weak last Friday, as money supply and net lending to individuals fell short of expectations. UK manufacturing PMI is up for release today and a jump from 56.0 to 56.5 is expected.

CHF

The franc held steady against the dollar last Friday when Switzerland’s KOF economic barometer came in slightly above consensus. The figure climbed from 1.71 to 1.85, beating the estimate at 1.82. For today, the SVME PMI is up for release and a rise from 54.2 to 55.1 is expected, which might allow the franc to sustain its gains to the dollar and the euro.

JPY

The yen resumed its selloff to its major counterparts at the start of this trading week, as traders risk appetite was up. Data from Japan was mixed last Friday, as Tokyo core CPI came in better than expected while national core CPI met expectations. However, household spending and employment both came in short. For today, capital spending came in weaker than expected, fueling yen weakness. BOJ Kuroda is set to give a testimony later on.

Commodity Currencies (AUD, NZD, CAD)

The comdolls rebounded against the dollar on Friday and today as we got a dose of promising data from China, Australia, New Zealand and Canada. Canada’s monthly GDP was better than the estimated 0.1% uptick as the actual figure showed 0.3% growth. China’s official manufacturing PMI came in line with estimates at 51.4 over the weekend while the HSBC final manufacturing PMI was better than expected at 50.8. New Zealand’s overseas trade index showed a 7.5% increase while Australia printed strong building approvals and company operating profits a few hours ago. No other reports are due from these economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 3, 2013)

USD

The dollar refused to back down against the pound and the euro in yesterday’s trading, although it lost some ground to the comdolls as risk appetite bounced back in the Asian trading session. Data from the US was better than expected, as the ISM manufacturing PMI improved from 54.3 to 54.7 instead of declining to the estimate at 55.2. For today, only a couple of medium-tier reports are up for release from the US economy and these aren’t likely to cause a huge impact on dollar movement.

EUR

The euro lost ground to the dollar yesterday, as EUR/USD let go of the 1.3600 handle and dipped to the 1.3500 area. Data from the euro zone was mixed, as the Spanish manufacturing PMI disappointed and printed a contraction while the Italian PMI came in line with expectations at 51.4. Spanish unemployment change data is up for release today and a weak figure might push the euro lower against its counterparts while a good reading could pave the way for a recovery.

GBP

The pound was unable to sustain its rallies against the dollar yesterday but it did take advantage of yen weakness. UK manufacturing PMI was much stronger than expected, as the actual figure climbed to 58.4 while the previous figure was revised up from 56.0 to 56.5. Construction PMI is up for release today and it is expected to show a dip from 59.4 to 59.3 but a strong climb might push the pound higher against its counterparts again.

CHF

The franc tried to edge higher yesterday but let go of some of its gains to the dollar when US data came in strong. Swiss SVME PMI was much better than expected at 56.5 versus the estimate at 55.1 and the previous 54.2 reading. There are no reports due from Switzerland today so we might see a bit of consolidation from franc pairs.

JPY

The yen lost ground to its counterparts once more although the Nikkei posted a loss for the day. Japanese capital spending was weaker than expected and BOJ Kuroda stressed the central bank’s willingness to add stimulus if needed, leading to another massive yen selloff. Japanese average cash earnings came in line with consensus at 0.1% earlier today but wasn’t enough to trigger sharp moves from yen pairs yet.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to breathe a sigh of relief yesterday when data from China was able to provide support for the Aussie and Kiwi. At the same time, actual data from Australia and New Zealand surprised to the upside. Earlier today, Australian retail sales came in stronger than expected at 0.5% yet the RBA said that the Aussie is still overvalued, eventually leading to Aussie weakness. No other reports are due from these economies for the rest of the day’s trading sessions.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 4, 2013)

USD

The US dollar had a tough time in the markets yesterday as there were no top-tier US data to draw support from. The dollar gave up some of its gains to the euro, pound, and yen but managed to end the day stronger against most of the commodity currencies. For today, US trade balance, ISM non-manufacturing PMI, and new home sales reports are up for release. The trade balance could show a smaller deficit of 40.3 billion USD while the ISM non-manufacturing PMI could hold steady at 55.4. New home sales are projected to show a 432K reading, as stronger than expected figures might allow the dollar to regain ground. US ADP non-farm employment change is also on deck and this might provide some hints for the upcoming NFP release later this week.

EUR

The euro bounced back to action in yesterday’s trading as it found support at the 1.3550 minor psychological level. Data from the euro zone was stronger than expected, as Spain reported a 2.5K drop in unemployment. Services PMIs from Spain and Italy are up for release today and the odds are tilted to a downside surprise. Euro zone retail sales data is also up for release and a 0.2% uptick is expected.

GBP

The pound was unable to extend its rallies past the 1.6450 minor psychological resistance even though the UK construction PMI came in much stronger than expected. The report showed a 62.6 reading, much higher than the 59.3 estimate and the previous 59.4 figure. Services PMI is up for release today and this might have a bigger effect on pound price action. The reading is slated to dip from 62.5 to 62.1, which might force the pound to return some of its recent gains.

CHF

The franc tried to extend its wins against its counterparts, as USD/CHF dipped back to the .9050 zone. There were no reports released from Switzerland yesterday and there are none due today so franc pairs might be in for a bit of quiet trading.

JPY

The yen regained ground against most of its currency rivals, particularly the US dollar when the Nikkei stock index posted another day of declines. There were no major reports released from Japan then and there are none due today, which suggests that yen movement might depend on how the Japanese equities fare for the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls still showed signs of weakness in yesterday’s trading and in today’s Asian session, as Australia reported a weaker than expected GDP reading of 0.6% when analysts projected a 0.7% growth figure. However, the previous quarter’s reading was revised up from 0.6% to 0.7%. No other reports are due from the Australia or New Zealand today so this weak GDP reading might keep weighing on Aussie pairs. As for Canada, trade balance data is due in today’s US session and a wider deficit of 0.7 billion CAD is expected. The BOC is also set to make its interest rate decision today, which might prove to be a volatile US session for USD/CAD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 5, 2013)

USD

The US dollar pocketed decent gains against most of its counterparts in yesterday’s trading, as data came in mostly better than expected. The ADP report showed a 215K rise in private payrolls, spelling good prospects for Friday’s NFP release and possibly the Fed’s decision to taper. Trade balance came in somewhat in line with consensus at a deficit of 40.6 billion USD. However, the ISM non-manufacturing PMI was weaker than expected at 53.9 versus the estimate at 55.4. For today, US preliminary GDP and initial jobless claims data are due and another round of strong data might lift the Greenback.

EUR

The euro bounced back and forth against the dollar yesterday. It was first weighed down by weak data from the euro zone, as Italian services PMI showed a contraction while region-wide retail sales chalked up a 0.2% decline. The ECB is set to make its interest rate decision today and traders are interested to find out whether negative deposit rates were discussed or not. Downbeat remarks from Draghi might push EUR/USD below 1.3400 while reassuring comments could trigger another test of 1.3600.

GBP

The pound retreated to the dollar in yesterday’s trading when the UK services PMI turned out to be a disappointment. The figure fell to 60.0 when analysts were expecting to see a small decline from 62.5 to 62.1. However, the losses were limited as traders hesitated to take any huge positions ahead of today’s BOE interest rate decision. No monetary policy changes are expected but we might hear of Carney’s assessment and outlook for the economy, which might be the major driving factor for pound pairs today.

CHF

The franc was able to regain ground against the dollar yesterday and extend its rally against the Australian dollar. There were no major reports released from Switzerland then and there is no report due today, which means that the franc might benefit from risk-off trades.

JPY

The yen was still in recovery mode yesterday when the Nikkei stock index posted another day in declines. The selloff in the yen pairs could also be attributed to profit-taking at significant levels and reducing exposure ahead of this week’s NFP release. There were no reports released from Japan yesterday and there are none due today so the yen’s movement might depend on risk sentiment again.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were heavily beaten up yesterday, as Australia printed a weaker than expected GDP reading of 0.6% versus the 0.7% estimate. Meanwhile, the Loonie also lost ground because of the BOC’s hints that they’re considering further stimulus. For today, only the Canadian building permits is due from the comdoll economies and this isn’t likely to spark huge extended moves.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 6, 2013)

USD

The dollar got a boost from a stronger than expected GDP reading for Q3 2013, as it was revised up from an initial estimate of 2.8% to 3.6%, higher than the projected 3.0% growth figure. Aside from that, the initial jobless claims report printed better than expected results, setting the state for a potential upside surprise in today’s NFP release. The jobs report could show an additional 180K in hiring for November, weaker than the previous month’s 204K increase, but it should be enough to bring the jobless rate down from 7.3% to 7.2%. However, if this improvement is simply chalked up to a weaker participation rate, the US dollar’s gains might be limited. In any case, make sure you account for additional volatility when trading the NFP.

EUR

The euro had another round of gains in yesterday’s trading when the ECB decided to keep interest rates unchanged at 0.25% and give no mention of further easing. In fact, in his speech a few hours later, ECB Governor Draghi reiterated that additional LTRO is not necessary for now. Traders weren’t expecting to see a less-dovish Draghi in yesterday’s press conference, leading many to believe that the economic situation in the euro zone might not be so bad after all. Only medium-tier reports are due from the euro zone today, as Germany factory orders data is up for release.

GBP

The pound was unable to sustain its rallies in yesterday’s trading even though the BOE decided to keep interest rates unchanged and make no changes to its bond purchases. Perhaps traders are still waiting for the actual minutes of the meeting to be released before taking on any large pound positions. Only the UK consumer inflation expectations report is up for release today and it isn’t expected to spark huge moves among pound pairs.

CHF

The franc was a big winner yesterday when it pushed USD/CHF below the .9000 major psychological level and AUD/CHF lower down the charts. There were actually no reports released from the Swiss economy yesterday so the move may have been inspired by risk aversion, which typically benefits the lower-yielding currencies like the Swiss franc. The CPI report is due today and a 0.2% drop in price levels is eyed.

JPY

The yen continued to rally against its counterparts in yesterday’s trading as risk appetite remained subdued. There were no reports released from Japan yesterday and the only report due today is the leading indicators release, which could show a small improvement from 109.2% to 109.9%, which might be positive for the Nikkei and USD/JPY.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had another weak trading day, as AUD lost further ground to the dollar and the yen. Australia printed a weaker than expected trade balance, which might be blamed again on their strong currency, while Canada printed a massive disappointment with its Ivey PMI report. The figure dipped from 62.8 to 53.7 in November, lower than the estimated drop to 50.9. Canadian jobs data is up for release today and a 12.3K increase in hiring is expected, which could keep their unemployment rate steady at 6.9%.

Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 10, 2013)

USD

The US dollar had a mixed trading day, as it lost ground to the pound and the euro but strengthened against the commodity currencies and the Japanese yen. Remarks from Fed officials were also mixed since Bullard hinted at a small taper because of the strong increases in hiring while Fisher reiterated that interest rates will remain low even after the bond buying program ends. There were no major reports released from the US economy then and today has none lined up as well.

EUR

The euro continued to edge higher against the dollar and the yen, despite German Chancellor Angela Merkel’s downbeat remarks. German trade balance came in weaker than expected at 16.8 billion EUR versus the estimate at 1.4 billion EUR. French and Italian industrial production figures are due today but these might not have such a huge effect on the euro. What could spark additional volatility is Draghi’s speech in today’s London session.

GBP

The pound rebounded against the dollar and kept rallying against the Japanese yen even though there were no major reports released from the UK yesterday. BOE Governor Carney’s speech did not contain a lot of details on monetary policy but his tone was upbeat, helping the pound recover from its recent selloff. Earlier today, the RICS house price balance came in weaker than expected but was not enough to erase the pound’s gains. Manufacturing production and trade balance are up for release today and small improvements could allow the pound to sustain its climb.

CHF

Despite weaker than expected Swiss retail sales, the franc managed to continue its rallies against the dollar and other currency rivals. Retail sales showed a 1.2% increase instead of the projected 1.7% jump. EUR/CHF is treading close to the SNB floor at 1.2000 and might be due for a bounce if the central bank decides to jawbone again.

JPY

The yen was beaten up by its currency rivals as Japan printed weaker than expected economic data. Tertiary industry printed a surprise 0.7% decline instead of the estimated 0.3% uptick while the BSI manufacturing index also disappointed. Up ahead, Japanese consumer confidence and preliminary machine tool orders data are due and might continue to affect yen pairs’ movement throughout the trading day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tried to edge higher against its counterparts, and the Aussie and Kiwi enjoyed more success than the Loonie. Data from China came in line with expectations, providing support for the Aussie, as the CPI chalked up a 3.0% figure. Earlier today, Australian NAB business confidence showed a decline from 6 to 5 but Chinese data might have a bigger impact on the Australian dollar. Industrial production, fixed asset investment, and retail sales data from China are on today’s docket.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 11, 2013)

USD

The US dollar was a big loser in yesterday’s trading, as risk appetite seemed to benefit most other major currencies. There were no major reports released from the US economy then, as traders took the opportunity to book profits at key support and resistance levels. For today, only medium-tier events are scheduled, which suggests that the dollar might have trouble regaining ground.

EUR

The euro kept edging higher against its major counterparts, despite the mixed data seen from the region. French industrial production came in weaker than expected at -0.3% while Italian industrial production beat expectations with a 0.5% uptick. Another round of medium-tier reports are lined up for the euro zone today and, unless we see a set of bleak figures, the euro might still have a chance at pushing higher.

GBP

The pound rebounded in yesterday’s trading, even as U.K. economic data disappointed. The manufacturing production report printed the expected 0.4% uptick while the trade balance fell short of expectations and showed a wider deficit. There are no economic events lined up for the UK today, except perhaps for BOE member Weale’s speech, so pound pairs might be in for a bit of consolidation.

CHF

The franc continued to pummel its way against the other major currencies, as the SNB showed no discomfort with their currency’s current levels. USD/CHF sank below the .8900 major psychological mark while AUD/CHF is attempting to break .8100. There were no economic reports released from Switzerland yesterday and there are none due today.

JPY

The yen lost ground to its major counterparts in today’s Asian trading session as the Nikkei showed signs of rebounding. As for economic data, Japan’s figures have been coming up short recently, which is leading traders to speculate about an increase in stimulus from the BOJ. Earlier today, Japan’s machinery orders came up short of consensus and showed a mere 0.6% uptick. No other reports are due from Japan for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls showed a bit of strength and took advantage of dollar and yen weakness in yesterday’s trading when data from China came in mostly in line with expectations. For today, Australia’s Westpac consumer sentiment showed a decline of 4.8% which isn’t good for the Australian dollar. A bigger mover could be the RBNZ statement in the next Asian trading session, as traders are expecting the central bank to jawbone the Kiwi. Canada has no economic data lined up.

By Kate Curtis from Trader's Way

 

[fxapex]

USD CAD has fallen a bit, NFP data's are good enough to have an impact on the market....

 

[katetrades]

Forex Major Currencies Outlook (December 12, 2013)

USD

The US dollar had a mixed performance against its major currency rivals in yesterday’s trading, as it rallied against the Australian dollar and pound but weakened against the yen, franc, and euro. There were no major economic reports released from the US in the latest New York session. Fed official Fisher was touted as the next Fed Deputy Chair, and traders tried to weigh in on his differing opinions compared to Janet Yellen. Fisher has been a known critic of the quantitative easing program and the Fed’s forward guidance, so he might be able to provide balance to the institution during his term. US retail sales reports are up for release today and given the continuous improvements in hiring, we might see strong figures. Headline retail sales could show a 0.6% increase while core retail sales might post a 0.2% rise.

EUR

The euro continued its ascent against its counterparts, despite the lack of top-tier data from the euro zone. French non-farm payrolls and German CPI came in line with expectations. Euro zone industrial production data is up for release today, along with the ECB monthly bulletin. Unless we see huge disappointments, the euro might still be in for more gains.

GBP

The pound continued to retreat against its counterparts even though the UK didn’t release any data yesterday. According to MPC member Weale, the forward guidance of the central bank has a strong impact at the very start but its effects could wane later on. There are no major reports due from the UK today, as the only release lined up is the CB leading index, which might show another increase following the previous 1.5% reading.

CHF

The franc continued to gain ground against its counterparts, as the SNB still didn’t make any comments regarding the currency’s strength. Today might be a different story though, as the central bank is set to make its interest rate decision. Indications that the policymakers are ready to defend the franc peg might trigger a strong bounce among franc pairs that have been treading lower.

JPY

The yen gained ground against most of its major counterparts on the heels of risk aversion in the currency market. There have been many criticisms of Abenomics popping up, mostly because of the recent weakness in Japanese data. However, selloffs among yen pairs might provide opportunities to buy at better levels, especially if the BOJ decides to reiterate its readiness to pump up stimulus if needed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls also had a mixed performance, as the Loonie and Kiwi strengthened while the Aussie sold off sharply. The RBNZ decided to keep interest rates unchanged at 2.50% for the meantime but hinted of potential hikes if inflationary pressures remain strong. As for Australia, jobs data came in stronger than expected at 21.0K versus the previous 0.7K decline and the estimated 10.1K increase, but the jobless rate still ticked higher from 5.7% to 5.8%. No other major reports are due from the comdolls today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 13, 2013)

USD

It seems that nothing could stop the U.S. dollar from rallying yesterday when the US economy printed a better than expected retail sales report. Headline consumer spending increased by 0.7% while core retail sales showed a 0.4% increase. Not even the worse than expected initial jobless claims figure of 368K was enough to derail the dollar’s climb. For today, only the PPI reports are due and these don’t usually have a huge impact on dollar movement. Nonetheless, headline producer prices could stay flat while core PPI could print a 0.1% uptick.

EUR

The euro was unable to sustain its climb against the dollar when the 1.3800 handle held as strong resistance. There were no major reports released from the euro zone and the medium-tier data that was released came in weaker than expected. The region’s industrial production sank by 1.1%, worse than the estimated 0.4% uptick. No major reports are due from the euro zone today, which suggests that it could move sideways for the rest of the day.

GBP

The pound sank deeper against the dollar in yesterday’s trading since there were no top-tier reports to keep the currency afloat. The CB leading index printed a 0.4% improvement but was not enough to boost the pound higher. There are no reports due from the UK today except for MPC member Dale’s speech but this might simply spark small moves.

CHF

The franc suffered a bit of a selloff yesterday when the SNB reiterated its pledge to defend the franc peg. However, the currency’s rallies resumed towards the latter trading session. Against the dollar though, the franc had a larger retreat since the US printed strong data. Only the PPI is due from Switzerland today and a 0.3% rebound is eyed, which might help ease deflation concerns.

JPY

The yen had a mixed trading day as the Nikkei posted minor gains and the Japanese currency simply reacted to other currency-specific events. There were no reports released from Japan then and only the revised industrial production figure is due today. No changes are expected from the previous 0.5% estimate.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to hold on to their recent gains as dollar strength came back into play yesterday. AUD/USD retreated below the .9000 major psychological level while NZD/USD failed to make a sustained break above .8300. Only the Australian jobs report was released from the comdoll economies yesterday and this came in better than expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 16, 2013)

USD

The Greenback barely reacted to weaker than expected PPI data on Friday, as it managed to hold on to its latest gains to the euro and the pound. Headline PPI showed a 0.1% decline while core PPI came in line with the consensus of a 0.1% increase. US Empire State manufacturing index and flash manufacturing PMI could be the movers for the dollar today, as both indices are expected to show improvements. Also due today are the revised non-farm productivity and labor costs data. Later on, we’ll see industrial production and capacity utilization figures as well. Overall, strong figures could allow the dollar to extend its rallies.

EUR

The euro was in a weak spot last Friday but it managed to start this week on a good note. However, this depends on the outcome of the upcoming PMI releases from France and Germany. Both manufacturing and services sectors of these economies are likely to show improvements, which could be very positive for the euro and allow EUR/USD to break past its previous highs. ECB President Draghi is set to give a speech later today and possibly add to the volatility among euro pairs.

GBP

The pound wasn’t on solid footing last Friday, as GBP/USD slid to the 1.6300 area and formed a reversal chart pattern. There are no reports lined up from the UK today, which suggests that the pound could trade sideways or continue to tread lower. Watch out for any changes in market sentiment that might also have an impact on pound pairs.

CHF

The franc held on to its gains against its counterparts, despite the SNB’s pledge to defend the peg. There were no major reports released from Switzerland last Friday and none are due today, which suggests that the Swiss currency could consolidate or keep rallying on risk aversion.

JPY

The yen got a dose of good news in today’s Asian trading session, as Japan’s Tankan figures printed stronger than expected results. The manufacturing component climbed from 12 to 16 while the non-manufacturing index improved from 14 to 20, reflecting strong prospects for the Japanese economy. This led some traders to believe that the strength in the economy means that there’s a lower likelihood of additional BOJ stimulus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a shaky start, although the Kiwi was able to enjoy a bit of support from better than expected Westpac consumer sentiment data. Over the weekend, New Zealand reported a climb from 115.4 to 120.1. However, the comdolls weren’t able to sustain their gains when China’s HSBC flash manufacturing PMI printed weaker than expected results. The figure was projected to improve from 50.5 to 51.0 but the actual figure came in at 50.5 and the previous month’s reading was revised from 50.5 to 50.8. No other reports are due from these economies for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 17, 2013)

USD

The US dollar had one of its better days against the pound and the euro, as the low-yielding currency managed to put a lid on its recent losses. Data from the US, however, came in weaker than expected. The Empire State manufacturing index did post an improvement from its previous negative reading but the actual figure of 1.0 was short of the consensus at 4.9. The flash manufacturing PMI also fell short of expectations as it dipped from 54.7 to 54.4 instead of improving to 54.9. US inflation reports are up for release today and these aren’t likely to cause huge waves in price action as traders could be positioning ahead of tomorrow’s FOMC statement.

EUR

The euro was unable to make new highs in yesterday’s trading, as data from the euro zone was mostly weaker than expected. French manufacturing and services PMIs both disappointed while Germany printed a weak services PMI. The manufacturing PMI of Germany improved from 52.7 to 54.2, lifting the region’s manufacturing PMI from 51.6 to 52.7. German ZEW economic sentiment data is up for release today and the index is slated to rise from 54.6 to 55.3, which might allow the euro to extend its gains.

GBP

The pound suffered a deeper selloff in yesterday’s trading as there were no major reports to give it support. Today might be a different story as UK CPI figures are up for release. Stronger than expected figures might force the BOE to tighten earlier than initially estimated in order to keep inflationary pressures at bay. However, the annual CPI reading is projected to hold steady at 2.2%.

CHF
The franc resumed its winning ways in yesterday’s trading, as the risk off environment favored the lower-yielding franc. There were no reports released from Switzerland on Monday and there are none due today, which suggests that we’ll see a continuation of the recent price action if there are no changes in risk sentiment.

JPY

The yen had a mixed performance as it lost further ground to the euro but managed to hold steady against the Aussie. Data from Japan was actually stronger than expected, as the Tankan indices posted significant improvements, yet the Nikkei posted a 1.62% loss for the day. There are no reports due from Japan today, which suggests that yen pairs might be sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls saw further weakness in yesterday’s trading, as AUD/USD edged to test its yearly lows while NZD/USD showed hesitation in rallying higher. Data from China was weaker than expected, with the HSBC flash manufacturing PMI falling short of the consensus at 51.0 and chalking up a 50.5 reading. RBA monetary policy minutes showed that policymakers thought that the AUD was too high while the government’s mid-year report showed larger than expected deficit estimates.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 18, 2013)

USD
The US dollar was able to end the day strong even though data from the U.S. economy was mixed. The headline CPI fell short of the expected 0.1% uptick and printed a flat reading but the core CPI printed a better than expected 0.2% increase instead of the projected 0.1% rise. The current account was also better than expected at -95 billion USD instead of the estimated -101 billion USD and the previous -97 billion USD. For today, the U.S. dollar could be in for a lot of consolidation prior to the FOMC statement. A decision to taper could be very positive for the U.S. dollar while an announcement postponing the taper could lead to a strong dollar selloff.

EUR

The euro continued to stall around its current levels to the dollar, thanks to the lack of major reports from the euro zone. German ZEW economic sentiment came in better than expected at 62.0 instead of the 55.3 reading, but was not enough to propel the euro to new highs. Euro zone CPI readings came in at 0.9%, slightly in line with expectations. German Ifo business climate data is up for release today and another strong figure could be seen.

GBP

The pound was unable to draw enough support from BOE Governor Carney’s comments saying that QE has reached its end, assuming there are no further shocks. Perhaps what traders are eager to hear are remarks that QE will be reduced sooner or later, but this wasn’t the case. For today, UK claimant count change and BOE meeting minutes are up for release. The jobs data could show a 35.2K drop in claimants, which should keep the jobless rate steady at 7.6%. A larger than expected decline, coupled with less dovish BOE minutes, could be positive for the pound.

CHF

The franc rebounded against its counterparts in yesterday’s trading, even though there were no major reports from Switzerland. Today has the Swiss ZEW economic expectations report on tap and the index is expected to show an improvement from the previous 31.6 reading, which could allow the franc to extend its gains.

JPY

The yen was able to score gains against most of its major counterparts, despite the lack of top-tier data from Japan. Today’s trade balance release fell short of expectations though, triggering a quick bounce among yen pairs. No other reports are due from Japan for the rest of the day, but all eyes are on USD/JPY particularly for the FOMC statement.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar chalked up another round of losses when RBA Governor Stevens began jawboning again, saying that intervention can be useful and that the Australian central bank actually considered doing so recently. New Zealand reported a weaker than expected current account balance but made up for it with a strong improvement in its ANZ business confidence figure. As for Canada, stronger than expected manufacturing sales data was not enough to give it a strong boost and today’s wholesale sales might have a minimal effect as well.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Economies Outlook (December 19, 2013)

USD

The US dollar got a strong boost from the FOMC’s decision to taper bond purchases by $10 billion starting January next year. The Fed cited strong improvements in the labor market as their main reason for reducing stimulus, but pointed out that interest rates will still remain low until the jobless rate reaches 6.5%. Bernanke also cautioned about the potential impact of tapering on inflation, which has been stuck way below the Fed’s 2% target for quite some time already. With that, the US dollar might be in for a good run in the last few trading days of the year, unless incoming Fed head Yellen says that it will take a long time before the central bank tapers again.

EUR

The euro finally gave way to dollar strength in yesterday’s trading, as the FOMC decision to taper boosted the US dollar against its counterparts. Data from the euro zone was in line with expectations, as the German Ifo business climate came in at 109.5, up from the previous 109.3 reading. Euro zone current account and Spanish bond auction are lined up for today, both events of which are not expected to have a huge impact on euro movement.

GBP

The pound gave up a bit of gains to the dollar yesterday but GBP/USD still managed to stay afloat, as the UK had its share of positive data. Claimant count change was better than expected, with a larger decline in unemployment. This was enough to push the UK jobless rate down from 7.6% to 7.4%. For today, UK retail sales are up for release and stronger than expected data might be seen, given the recent rise in hiring. After dropping by 0.7% in the previous month, a 0.3% rebound is expected for November.

CHF

The franc gave up a lot of its recent wins to the dollar when the FOMC announced its decision to reduce bond purchases. Nonetheless, the USD/CHF downtrend is still very intact for now. Swiss SECO economic forecasts and trade balance are up for release today and these reports might spur franc strength if they come in stronger than expected.

JPY

The yen was no match to the dollar in yesterday’s trading, although other yen pairs didn’t move so much. There were no reports released from Japan, as USD/JPY’s movement was mostly spurred by dollar strength following the FOMC statement. There are no reports lined up from Japan today so the yen might continue to cave to dollar strength.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were badly hurt in yesterday’s trading, both by the dollar’s rallies and the decline in gold and oil prices. AUD/USD sank deeper below the .8900 handle while NZD/USD was rejected at .8300 again. There are no major reports due from the comdoll economies today so these currencies might keep losing ground on risk aversion and dollar strength.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (December 20, 2013)

USD

The US dollar tried to extend its rallies against its major currency rivals but had trouble doing so because of weaker than expected US economic data. The existing home sales report showed a 4.90M reading instead of the estimated 5.04M figure and lower compared to the previous 5.12M. Meanwhile, the Philly Fed index improved from 6.5 to 7.0 but fell short of the estimated 10.3 reading. There are no major reports due from the US today as the only event lined up is Yellen’s confirmation vote.

EUR

The euro kept losing to the dollar in yesterday’s trading, despite better than expected data from the euro zone. The current account balance grew from a surplus of 14.9 billion EUR to 21.8 billion EUR, higher than the estimated 14.2 billion EUR surplus. For today, German PPI and German GfK consumer climate data are up for release. Producer prices are expected to stay flat while the consumer climate figure could hold steady at 7.4.

GBP

The pound was no match to dollar strength yesterday and it seems to have no firepower today, as the UK GfK consumer climate figure dipped from -12 to -13 instead of improving to the estimate -11 figure. UK retail sales came in line with the consensus of a 0.3% uptick but the previous month’s figure was revised down from -0.7% to -0.9%. UK current account, final GDP, and public sector net borrowing data are due today.

CHF

The franc was still in loser territory yesterday, as the recent FOMC decision to taper boosted USD/CHF up from the .8900 area. Swiss trade balance was also weaker than expected at 2.11 billion CHF versus the estimated 2.57 billion CHF surplus while the previous month’s figure was revised lower. There are no major reports due from Switzerland today.

JPY

The yen was stuck in consolidation against most of its counterparts in yesterday’s trading, as there were no reports released from the Japanese economy. Traders are also probably bracing themselves for today’s BOJ interest rate decision, although the central bank isn’t likely to make any monetary policy changes just yet. Still, be mindful of potential volatility during the event and during BOJ Governor Kuroda’s press conference.

Commodity Currencies (AUD, NZD, CAD)

The comdolls still caved to dollar strength in yesterday’s trading, even though there were no figures released from Australia, New Zealand, and Canada. For today, Canada is set to print its CPI and retail sales figures, which might mean volatility for USD/CAD. Core CPI is projected to post a 0.1% uptick while core retail sales could stay flat. Headline CPI could see a 0.2% increase while headline retail sales are expected to rise by 0.3%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (January 6, 2014)

USD

Liquidity is expected to pick up today as more traders return to their trading desks. Over the weekend, Harvard economist Larry Summers spoke of the need to have fiscal stimulus for the US economy. He pointed out that this could spur full employment through higher investments instead of implementing more monetary stimulus, which might end up with asset price bubbles. Data from the US today is the ISM manufacturing PMI, which is expected to climb from 53.9 to 54.6.

EUR

Talks of deflation in the euro zone are starting to weigh on the euro for now, although there are no major reports due from the region in the next few hours. Most economies in the region are still on holiday after all. German preliminary CPI was actually better than expected at 0.4% versus the estimate of a 0.2% increase. Later on, Spanish and Italian services PMI are up for release and small improvements are expected.

GBP

The pound was unable to sustain its rallies past the 1.6500 handle as it eventually retreated below 1.6400 to the dollar. UK services PMI is up for release today and an increase from 60.0 to 60.4 is expected, which might allow the selloff to take a pause. Bear in mind that services accounts for a huge component of overall economic growth in the UK economy so this report could trigger a strong reaction.

JPY

Over the weekend, a Nikkei survey showed that 70% of Japanese major retailers expected sales to drop once the sales tax increase is implemented. Recall that the government approved a sales tax hike from 5% to 8% in April, which could dampen overall demand. However, companies also expect sales to pick up in the months leading up to the tax increase and for the drag on demand to taper in September this year.

CHF

There have been no reports released from Switzerland lately as Swiss banks are on holiday. This has led to a franc selloff, particularly against the US dollar lately. There are still no major reports due from Switzerland today, which suggests further franc weakness, especially if US data comes in strong.

Commodity Currencies (AUD, NZD, CAD)

Australia’s AIG services index posted a decline in activity over the weekend, reflecting a deeper contraction in the industry. This might weigh on the Australian dollar for the rest of the trading day, as there are no other major reports due from the country for the next few hours. Meanwhile, Canada is set to print a couple of inflation indicators, both of which are not expected to have a major impact on Loonie movement.

By Kate Curtis from Trader's Way