Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (September 24, 2013)

USD

The US dollar had a mixed performance yesterday as traders are trying to reestablish their biases on the US economy. On the one hand, the Fed has refrained from tapering while some FOMC officials like Dudley reiterated that the economy is too weak to warrant a reduction of bond purchases. On the other hand, FOMC policymaker Bullard has mentioned that the possibility of tapering in October is still high. For today, US CB consumer confidence data is up for release and a small decline is expected. FOMC member George is also set to give a speech in today’s US session.

EUR

The euro was once again weighed down by remarks from ECB head Draghi, as he spoke of the possibility of another round of long-term refinancing operations. Apparently, the drop in excess liquidity and the rise in money market rates is leading ECB officials to worry about a credit crunch and possible risks to recovery. Euro zone PMIs have come in mixed though, with the manufacturing figures in both France and Germany coming in below consensus and the services readings coming in strong. German Ifo business climate data is up for release today and an improvement from 107.5 to 108.4 is expected.

GBP

The pound was able to hold on to its recent levels yesterday, despite the lack of data from the UK. BBA mortgage approvals data and a few speeches by BOE policymakers are lined up for today, adding to potential volatility for pound pairs. MPC members Miles, Tucker, and Bean are set to take the stage today and possibly highlight the recent improvements in the UK economy and the reduced need for stimulus, which might help support the pound against its counterparts.

CHF

There were no major releases from Switzerland yesterday, which explains why it simply stayed in consolidation against the US dollar. There are still no reports due from Switzerland today so USD/CHF might keep moving sideways or be sensitive to US data.

JPY

The yen flexed its muscles yesterday, thanks to speculations that the government has its own stimulus package to offset the projected impact of the sales tax. Word on the street is that a cut in corporate tax might be implemented, much to the joy of business owners. This led to a rally in the yen, as traders thought that the BOJ will not need to dole out additional stimulus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to make much headway in yesterday’s trading, as traders were uneasy about shorting the dollar again. Data from China was better than expected, as the HSBC manufacturing PMI for September rose from 50.1 to 51.2, reflecting stronger export prospects for Australia. No reports are due from New Zealand, as Canada will take the spotlight with its retail sales release. A rebound in spending is eyed, mostly because of the recent improvement in hiring.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 25, 2013)

USD

The US dollar’s rally gained traction yesterday, even though there weren’t exactly a lot of major reports on tap. In fact, US reports actually came in below consensus yesterday, as the Richmond manufacturing index slipped from 14 to 0 instead of improving to 17. The CB consumer confidence figure also came in slightly weaker than expected at 79.7 instead of the estimated 79.9 reading, reflecting lower confidence for the month. Durable goods orders data are up for release today and improvements are expected, which might allow the dollar to keep up its rallies.

EUR

The euro lost ground to most of its major counterparts in yesterday’s trading, as Germany’s Ifo business climate report fell short of expectations. The actual reading climbed from 107.6 to 107.7, lower than the estimate at 108.4. German GfK consumer climate data is up for release today and another disappointment might be in the cards, although the reading is slated to rise from 6.9 to 7.1.

GBP

The pound was weaker against most of its major rivals, except for the euro. BBA mortgage approvals showed an improvement and reached its highest level since December 2009 at 38.2K. This reflects a healthy level of loan demand, which is good for the housing sector and construction industry. BOE officials expressed their contentment with the current level of stimulus while some mentioned that tightening could take place if significant improvements are seen. UK CBI realized sales are up for release today and a dip from 27 to 24 is expected.

CHF

The franc was stuck in consolidation against the US dollar, as USD/CHF was having trouble breaking below the .9100 major psychological support. There were no major reports released from Switzerland then but today’s UBS consumption indicator might be a catalyst for a breakout. The July figure came in at 1.41 and a higher reading might push USD/CHF lower.

JPY

The yen continued to rally against the other major currencies yesterday, as USD/JPY was able to stay safely below the 99.00 handle. There were no reports released from Japan as risk was off in the markets. There are no reports due from Japan today as we could see yen pairs continue to react to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were the weakest performers in yesterday’s trading, as both higher-yielding currencies were hit by risk aversion. USD/CAD managed to hold on to the 1.0300 handle, even though Canadian core retail sales came in strong at 1.0%. For today, there are no major reports due from any of these comdoll economies so these pairs might be sensitive to risk flows.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 26, 2013)

USD

The US dollar let go of its recent gains to the dollar, yen, and euro as data from the US economy wasn’t as strong as expected. Core durable goods orders turned out to be a disappointment with a 0.1% decline for August while the headline figure was only slightly better than expected at its 0.1% uptick. New home sales were slightly below expectations at 421K versus the consensus at 422K. For today, initial jobless claims are up for release along with pending home sales, which could see a 0.9% decline. More weak figures could reinforce the dollar selloff.

EUR

The euro recovered against the Greenback but continued to lose to the yen. Risk aversion was still in play yesterday, although traders showed preference for the lower-yielding yen instead of the dollar, which is plagued by debt ceiling concerns. Germany’s GfK consumer climate report came in line with expectations and showed a 7.1 reading, up from the previous 7.0 figure. For today, M3 money supply and Italian retail sales are up for release and not expected to have a huge impact on euro price action.

GBP

The pound was able to bounce back after hitting the 1.6000 area against the Greenback. The CBI realized sales figure came in much better than expected at 34 versus the estimate of an increase from 24 to 27. UK revised GDP figures are up for release today but no changes are expected. A stronger than expected reading might allow the pound to sustain its rallies though.

CHF

The franc finally made some headway against the U.S. dollar as USD/CHF dipped below the .9100 major psychological level. However, data from Switzerland showed a bit of weakness as the UBS consumption indicator dipped from 1.41 to 1.34. The SNB quarterly bulletin is up for release today and it should shed light on why the central bank upgraded its growth forecasts recently.

JPY

The yen continued to soar against its major counterparts, as improving medium-tier economic data from Japan lifted the currency. Risk aversion also helped fuel the yen’s rallies, as traders preferred the Japanese currency over the U.S. dollar. There are no reports due from Japan today but watch out for updates on the government’s plans to offset the impact of the increased sales tax.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to join the anti-dollar rallies yesterday, as AUD/USD and NZD/USD sank lower while USD/CAD stayed stuck in consolidation around 1.0300. The lack of major data from these economies was probably one of the main reasons why the Aussie, Kiwi, and Loonie failed to rally. For today, their economic schedule is empty once again so these currencies might simply be driven by risk flows again.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 27, 2013)

USD

The US dollar lost some ground to most of its major counterparts yesterday, as bleak economic data convinced traders that a taper is not likely for this year. The US GDP reading was held steady at 2.5% for the second quarter instead of being upgraded to the estimated 2.7% reading. Pending home sales fell short of expectations as it printed a 1.6% decline instead of the estimated 0.9% downtick. For today, consumer data such as the core PCE price index, personal spending and income, and preliminary UoM consumer sentiment data are up for release. Weak reports could reinforce the dollar selloff while strong data could provide support for the currency. Take note that some Fed officials are set to give speeches today and their remarks could be taken as clues on the Fed’s monetary policy plans.

EUR

The euro was unable to hold on to its recent gains when medium-tier data from the euro zone printed weak results. Italian retail sales dropped by 0.3% instead of rising by 0.3% while private loans in the region fell by 2.0%. Medium-tier reports from Germany and France are lined up for today, and another set of weak figures could push the euro lower. German CPI is slated to print a flat reading while French consumer spending could show a 0.1% uptick. ECB head Draghi has a speech scheduled today and he could spark additional volatility for euro pairs.

GBP

The pound was one of the weaker currencies in yesterday’s trading, thanks to downbeat data from the UK. The GDP reading held steady at 0.7% for the second quarter while the first quarter report suffered a small downward revision. The current account balance missed expectations and printed a larger than expected deficit. UK Nationwide HPI is up for release today and a 0.5% uptick in house prices is projected.

CHF

The franc stayed in consolidation against the dollar at the .9100 major psychological level yesterday. The lack of data from Switzerland kept the pair in a sideways path but today’s KOF economic barometer release could spark a breakout. The figure is expected to rise from 1.36 to 1.46 in the current month, possibly allowing USD/CHF to tread lower.

JPY

The yen sold off against most of its counterparts, as Japan’s inflation reports came in mixed. National core CPI is up by 0.8%, higher than the estimated 0.7% reading, while the Tokyo core CPI fell short of the projected 0.3% figure and showed a mere 0.2% uptick. No other reports are due from Japan today so stay tuned for updates on the government’s plants to offset the sales tax increase to figure out where yen pairs could trade.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to keep climbing yesterday, as weak US data weighed on overall risk sentiment. There were no major releases from Australia, Canada, or New Zealand recently, leaving the comdoll pairs at the mercy of sentiment. For today, their economic schedules are empty once again so AUD/USD, USD/CAD, and NZD/USD might take their cues from U.S. data.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (September 30, 2013)

USD

The US dollar lost ground on Friday, mostly because of the weak economic data and the prospect of a government shutdown. Lawmakers only have a few hours left to come up with a plan to avoid default, and it appears that Republicans and Democrats still can’t see eye to eye. However, as we have seen in the past, they do tend to come up with something on the very last minute. If that’ll be the case again, we might see a relief rally from the dollar. US Chicago PMI is up for release today and an improvement from 53.0 to 54.5 is expected.

EUR

The euro staged a decent run against the dollar on Friday, but the 1.3550 level held as resistance then the pair gapped lower over the weekend. Data from the euro zone was mostly weaker than expected, with Germany printing a flat CPI reading and France showing a 0.4% decline in consumer spending. German retail sales data is up for release today and a 0.9% rebound is eyed.

GBP

The pound made a test of its recent highs against the dollar and its rally doesn’t seem to be showing any signs of stopping anytime soon. Even though UK’s index of services fell short of expectations, the positive outlook for the British economy was enough to support the pound. Data on net lending to individuals and mortgage approvals are up for release today, so signs of improvement could help GBP/USD extend its gains past 1.6200.

JPY

The yen was a big winner last Friday, as improved inflation data and risk aversion both lifted the Japanese currency. Japan’s economic data came in mostly in line with consensus earlier today, with the retail sales figure posting a 1.1% increase and manufacturing PMI climbing from 52.5 to 52.2. Housing starts, however, fell short of expectations and posted an 8.8% increase instead of the estimated 12.9% jump. No other reports are due from Japan today.

CHF

The Swiss franc was able to rally against the dollar again, pushing USD/CHF below the .9100 support level. Switzerland’s KOF economic barometer was stronger than expected at 1.53 versus the 1.46 estimate. There are no reports up for release from Switzerland today so it could be all about risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to benefit from the dollar selloff that occurred last Friday, as risk aversion took the best of them. AUD/USD slid to the .9300 handle while NZD/USD moved further below .8300 and USD/CAD held on to the 1.0300 handle. Over the weekend, New Zealand printed a 1.4% rebound in housing starts but the previous figure was revised down to -3.4%. Earlier today, China’s official manufacturing PMI came in above 50 but lower than the estimate. Canadian monthly GDP and medium-tier inflation data are due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 1, 2013)

USD

The U.S. dollar experienced heavy selling pressure in yesterday’s trading, as the U.S. economy is currently facing a possible government shutdown. For now, lawmakers still haven’t come up with an agreement on how to implement spending cuts and avoid reaching the debt ceiling, which might then force the U.S. to default on its debts. Data from the U.S. barely had any impact on dollar price action yesterday but today’s ISM manufacturing PMI could push dollar pairs around. A small dip is expected for August, which might reinforce the dollar selloff.

EUR

The euro was stuck in consolidation against the dollar but it managed to score some gains against the Japanese yen. EUR/USD was unable to break past the 1.3550 minor psychological resistance yesterday, as political tensions in Italy continued to threaten the euro zone’s stability. Data from euro zone was mostly weaker than expected, as German retail sales fell short of consensus. For today, Italian and Spanish PMIs are up for release along with the German unemployment change report.

GBP

The pound was one of the major currencies that surged to new highs against the dollar yesterday, as GBP/USD climbed past the 1.6200 major psychological resistance. Data from the UK was actually in line with expectations only but the positive outlook for the British economy was more than enough to keep the pound afloat. For today, the manufacturing PMI is up for release and another improvement is eyed. After all, the UK has been consistently printing better than expected manufacturing PMI for the past five months.

CHF

The franc struggled to hold on to its recent gains, as EUR/CHF moved closer to the 1.2200 handle while USD/CHF paced below the .9100 mark. There were no releases from Switzerland yesterday as traders await the release of the SVME PMI today. A slight improvement is expected and this might be enough to let the franc resume its rallies.

JPY

The yen is also under heavy selling pressure recently, as traders await Abe’s announcement on the sales tax increase. Word on the street is that a hike from 5% to 8% is likely but market watchers are still waiting for the release of the Tankan index to figure out if the economy could withstand a tax hike. Also likely to be announced today is a potential corporate tax cut from the government which could offset the impact of the sales tax.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in for quiet trading yesterday, as they barely took advantage of dollar weakness. Data from China has been weak, as both HSBC and government manufacturing PMIs fell short of expectations. Canada’s monthly GDP came in line with consensus at 0.6% while New Zealand didn’t release any economic data. The RBA statement is scheduled today and this might have a huge impact on the Aussie if the central bank makes changes.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 3, 2013)

USD

The US dollar gave up its gains to its major counterparts, as the US government shutdown extended for another day. It didn’t help that US data was weaker than expected, with the ADP private payrolls figure showing a 166K increase instead of the estimated 177K rise. The previous month’s figure was revised down from 176K to 159K, reflecting a larger downturn in hiring for the past few months. For today, the initial jobless claims and ISM non-manufacturing PMI are up for release. Another round of weak data and a third day of the government shutdown could keep weighing on the Greenback.

EUR

The euro was able to recover in yesterday’s trading as Italian Prime Minister Letta announced victory. He was able to secure enough votes to keep the coalition government in place and prevent a loss of confidence in his leadership. Data from the euro zone was actually weak, with the Spanish unemployment change printing twice as much as the estimated 12K rise in joblessness. The ECB kept interest rates unchanged at 0.50% but Draghi reminded market watchers that further weakness could be in the cards. Spanish and Italian services PMI are up for release today, along with the region’s retail sales figure.

GBP

The pound was able to bounce back to action in yesterday’s trading, thanks to overall dollar weakness. Data from the UK, however, was a disappointment, as the construction PMI didn’t meet the consensus. The figure fell from 59.1 to 58.9, lower than the estimate at 60.1. For today, the services PMI is up for release and we might be in for another weak figreu.

CHF

The franc rebounded against the dollar yesterday but weakened against the euro. USD/CHF fell back below the .9000 handle briefly while EUR/CHF held on to 1.2250. There were no reports released from Switzerland yesterday and none are due today, which suggests that franc pairs could be sensitive to US and euro zone reports.

JPY

The yen staged a strong rally against its major counterparts, pushing USD/JPY to its one-month low. The yen rallied on the heels of the Nikkei selloff. There were no reports released from Japan yesterday and there are no reports due today, which suggests that yen pairs could continue to react to the Japanese stock indices.

Commodity Currencies (AUD, CAD, NZD)

The Australian dollar and the New Zealand dollar were able to get back on their feet yesterday, as both took advantage of the dollar selloff. The Canadian dollar’s gains were limited, as the Canadian economy also stands to suffer if the U.S. economy shows further weakness. Data from Australia was weaker than expected while New Zealand didn’t release any economic reports recently. There are no reports due from Canada, Australia, and New Zealand today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 4, 2013)

USD

The US dollar had a mixed day as it lost to the euro, franc, and yen but caught some gains against the Aussie, Kiwi, and pound. Data form the US was also mixed, as the initial jobless claims printed a better than expected result but the ISM non-manufacturing PMI came in below consensus. Initial jobless claims were at 308K versus the estimate at 315K while the non-manufacturing PMI fell from 58.6 to 54.4, lower than the consensus at 57.2. For today, there are no reports due from the US as the government shutdown means that the NFP will not be published.

EUR

The euro was able to score good wins against its major counterparts in yesterday’s trading, as the victory of Prime Minister Letta still kept the shared currency afloat. During the ECB conference, Governor Draghi was his usual dovish self. However, the euro still seemed to be more affected by the resolution of the political trouble in Italy. For today, only the German PPI is up for release.

GBP

The pound lost ground to most of its counterparts in yesterday’s trading, as GBP/USD formed a double top and hinted of a possible selloff. Data came in line with expectations as the services PMI dipped from 60.5 to 60.3, hinting of a slight slowdown in the industry expansion. For today, there are no reports due from the UK.

JPY

The yen was able to end higher against most of its currency rivals, except for the euro. There were no major reports released from Japan yesterday as the move was probably a result of profit-taking ahead of today’s BOJ rate statement. No easing measures are expected but the yen might give back its gains when the central bank gives concrete plans on how to keep the economy afloat while the sales tax hike gets implemented.

CHF

The franc bounced back against the dollar but chalked up losses to the euro yesterday. There were no reports released from Switzerland, as the franc simply reacted to country-specific data. There are still no reports due from Switzerland today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened slightly against the U.S. dollar, as traders probably booked some of their profits as risk appetite waned. The AIG services index in Australia climbed to its six-month high while China’s services sector posted an expansionary figure. There have been no releases from New Zealand and Canada recently, although RBNZ head Graeme Wheeler gave a speech that was a bit more hawkish than expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 7, 2013)

USD

The US dollar recovered some of its recent losses for the previous week on Friday, as risk aversion popped its head in the markets. It also helped that a lot of traders booked profits at the end of the week. EUR/USD pulled back to the 1.3600 support area while GBP/USD retreated to 1.6050. There were no reports released from the US then, as the US government shutdown meant that the NFP was not printed. For today, the US is set to print its consumer credit report and possibly show an increase.

EUR

The euro gave up some of its recent profits to the dollar and the yen on Friday, yet it seems that EUR/USD and EUR/JPY are off to a good start this week. Data from the euro zone was weak last Friday, as Germany and euro zone printed weaker than expected PPI readings. For today, euro zone Sentix investor confidence and final GDP reading are up for release. No revisions are projected for the GDP report while the Sentix figure could see an increase from 6.5 to 10.9.

GBP

The pound suffered a heavy selloff on Friday, as traders realized that the recent boom in the U.K. might not be sustained. The weak PMI readings from the manufacturing, construction, and services sector earlier in the week led traders to unwind most of their long pound positions. For today, there are no reports from the U.K.

CHF

The franc lost some ground to the dollar on Friday but some suspect that this might just be a retracement. There were no reports released from Switzerland then and today has the foreign currency reserves report on tap. This report has been showing declines in the past months, which means that the SNB has been having an easier time keeping its franc peg.

JPY

The yen continued its rallying ways on Friday, as the Japanese currency continued to benefit from risk aversion and positive sentiment for the Japanese economy. So far, no additional stimulus measures have been announced by either the government or the BOJ. The BOJ monthly report and leading indicators are up for release today and more positive figures could keep the yen afloat.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were shielded from the selloff last Friday, as the strength of the Australian, New Zealand, and Canadian economies helped keep their currencies afloat. Canada’s Ivey PMI came in below consensus but still printed an improvement from 51.0 to 51.9, reflecting stronger growth in the manufacturing industry. Canadian building permits and New Zealand NZIER business confidence data are up for release in the US session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 8, 2013)

USD

The US dollar struggled to hold its ground at the start of the week as the continued government shutdown discouraged traders from taking long dollar positions. The consumer credit report came in better than expected and reflected stronger consumer spending but did very little to support the Greenback. A couple of medium-tier reports are up for release today but these are not likely to spur dollar strength, unless the risk off environment starts to favor the Greenback as well.

EUR

The euro started Monday on a weak note but was able to stage a decent rebound towards the end of the US session. Euro zone Sentix investor confidence was weaker than expected, as the reading fell from 6.5 to 6.1 instead of improving to the estimate at 10.9. The Final GDP reading saw no revisions from the 0.3% figure. German and French trade balance are up for release today, as well as the German factory orders report. Another round of weak figures from the euro zone could prevent EUR/USD or EUR/JPY from making any headway.

GBP

The pound was able to make a nice comeback on Monday, although there were no major reports released from the UK. Perhaps traders are recovering from the sharp selloff last Friday and starting to price in expectations for the BOE rate decision later this week. The RICS house price balance released earlier today came in better than expected and might be enough to support pound pairs throughout the day.

CHF

The franc extended its wins against the US dollar during the NY session, although it did sell off at the start of the week. Swiss foreign currency reserves data showed a decline, which means that it is becoming less expensive for the SNB to maintain its franc peg. Swiss unemployment rate is up for release today and it is expected to hold steady at 3.2%. Swiss CPI and retail sales are also up for release.

JPY

The yen was able to benefit from the risk off market environment on Monday, as it packed in gains against its higher-yielding counterparts. Data from Japan was slightly weak, as the leading indicators index fell from 107.8% to 106.5%, lower than the estimate at 106.9%. Japan’s current account balance missed the mark, as it rose from 0.33T JPY to 0.35T, short of the estimate at 0.65T JPY. The Economy Watchers sentiment index is up for release within the day and an improvement is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to recover from the weak start on Monday as the continued government shutdown in the US dwindled demand for the dollar. Canadian building permits came in weaker than expected, as the report showed a 21.2% slide instead of the estimated 2.4% drop. New Zealand reported an improvement in its NZIER business confidence figure from 32 to 38 while Australia’s ANZ job advertisements indicated a 0.2% uptick. Canadian trade balance and housing starts are also due today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 9, 2013)

USD

The US dollar was able to make a quick bounce in the Asian session but gave up its intraday gains back to its major counterparts, as the lawmakers in Washington still haven’t reached a deal on the budget. This means that the shutdown in the government has carried on for more than a week, weighing on overall economic growth. Data from the US was weaker than expected, as the NFIB small business index fell from 94.1 to 93.9 instead of improving to 95.2. FOMC meeting minutes are up for release today and it will be interesting to see how the U.S. government shutdown factored in the Fed’s decision back in September.

EUR

The euro struggled to hold on to its current levels against the dollar and the yen yesterday, as data came in mixed. Germany’s trade balance printed a stronger than expected reading but the gains from this report were wiped out by the weaker than expected factory orders release. German industrial production data is up for release today and a 1.1% increase is expected. Draghi is set to give a speech and possibly cause some volatility for euro pairs around 11:00 pm GMT.

GBP

The pound suffered a sharp selloff at the start of the London session, as a news report erroneously said that the BOE implemented additional LTRO when it just turned out to be their normal repo operations. Pound pairs were able to recover to their previous levels instantly, although there were no major reports released from the UK around that time. For today, UK manufacturing production and trade balance numbers are up for release. Manufacturing production could show a 0.3% increase while the trade balance could show a smaller deficit.

CHF

The franc was simply stuck in consolidation against the euro and the dollar, despite the round of strong data from Switzerland. CPI came in at 0.3% versus the estimated 0.2% reading while retail sales printed a 2.4% jump instead of the 1.7% projected increase. The jobless rate held steady at 3.2% as expected. No reports due from the franc today could mean more consolidation for USD/CHF and EUR/CHF.

JPY

The yen was able to rake in some more gains against its counterparts, as the lower-yielding Japanese currency kept benefitting from risk aversion. USD/JPY edged lower during the U.S. session and so did EUR/JPY. The Economy Watchers sentiment index printed a higher than expected reading of 52.8, also an improvement over the 51.2 reading seen previously. For today, BOJ monetary policy meeting minutes are up for release along with the preliminary machine tool orders report.

Commodity Currencies (AUD, NZD, CAD)

AUD/USD and NZD/USD were mostly stuck in their current ranges while USD/CAD had an upside breakout on the heels of weak Canadian data. The trade balance widened to 1.3 billion CAD versus the estimated drop to 0.7 billion CAD, while the previous reading was revised to show a larger deficit. Westpac consumer sentiment data in Australia released earlier today printed a 2.1% decline, weighing on AUD/USD in today’s early Asian session. New Zealand will be printing its Business NZ manufacturing index at 11:00 pm GMT.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 10, 2013)

USD

The U.S. dollar was able to bounce back to action yesterday, but it remains to be seen whether this is just a temporary pullback. The FOMC minutes showed that policymakers were open to tapering within the year, but this was before the week-long government shutdown took place. They did mention that they were concerned about budget cuts and the debt ceiling’s impact on economic performance. Obama’s nomination of Janet Yellen was also received positively by U.S. markets, as many anticipated continued stimulus under her watch.

EUR

The euro was sold off against the dollar and the yen yesterday, as risk aversion took hold of the markets. German industrial production increased by 1.4%, higher than the estimated 1.1% rise, while the previous month figure was revised to show a smaller decline. French industrial production data is up for release today and a strong figure could help the euro extend its gains.

GBP

The pound suffered a heavy selloff yesterday since the UK printed a bleak manufacturing production figure. The reading showed a 1.2% decline for September instead of the estimated 0.3% uptick. For today, the BOE will make its interest rate decision and no monetary policy changes are expected. A hawkish statement could be in the cards, as Carney has previously remarked that further QE won’t be necessary. However, the recent downturn in PMIs and production could cause him to shift his stance.

CHF

The franc lost ground to the U.S. dollar in yesterday’s trading, pushing USD/CHF back above the .9100 handle. There were no reports released from Switzerland, as the move was mostly spurred by dollar strength. There are no reports due from Switzerland today, leaving USD/CHF at the mercy of U.S. data and risk sentiment once more.

JPY

The yen was tugged around in yesterday’s trading battle, as weak preliminary machine tool orders data caused a yen selloff but today’s set of strong Japanese reports allowed it to rebound. Core machinery orders jumped by 5.4% versus the estimated 2.9% rise while the tertiary industry activity index showed a 0.7% uptick. Data on consumer confidence is due today and it is expected to show a climb from 43.0 to 43.8 .


Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to hold their ground against the dollar yesterday, as the Loonie was the only currency that posted significant losses. Today, however, the Australian dollar dipped when the jobs report came in mixed. Hiring was weaker at 9.1K but the jobless rate improved from 5.8% to 5.6%. No other reports are due from the comdoll economies for the rest of the day so expect U.S. data or risk sentiment to drive price action for these pairs.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 11, 2013)

USD

The dollar carried on with its recovery on Thursday, as risk remained off but traders started pricing the possibility that Washington will come up with a budget deal over the weekend. Profit-taking scenarios similar to last week’s dollar rallies on Friday could take place in anticipation of a deal in the next few days. As for data, US initial jobless claims came in worse than expected at 374K versus the estimate at 307K. For today, US preliminary UoM consumer sentiment data is up for release and a small dip from 77.5 to 77.2 is eyed.

EUR

The euro lost ground to the dollar during yesterday’s Asian session but managed to make a good comeback during the London session. Data from the euro zone was actually weaker than expected, as French industrial production fell short of consensus. Only medium-tier reports are due from the region today and these aren’t likely to spur huge moves among euro pairs.

GBP

The pound was stuck in consolidation prior to the BOE interest rate decision. The pairs made a bit of headway afterwards, as the central bank decided to keep monetary policy unchanged. They kept rates on hold at 0.50% and their asset purchase program at 375B as expected. Only the UK CB leading index is due today and a small uptick is expected, but a weaker than expected reading might undermine pound strength.

CHF
The franc struggled to reverse its recent losses to the dollar, as USD/CHF tested the .9100 handle. There were no reports released from Switzerland yesterday and none are due today, which suggests that USD/CHF movement could be driven by U.S. events or potential profit-taking ahead of the weekend.

JPY

The yen lost ground to its counterparts as the Nikkei stock index posted some gains. USD/JPY rallied to the 98.00 area while CAD/JPY broke above the 94.00 mark. BOJ Governor Kuroda is set to give a speech today and possibly spur some volatility among yen pairs. No other major events are lined up for Japan.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost ground to the dollar as risk aversion set in while dollar sentiment improved. Jobs data from Australia was mixed, with a better than expected jobless rate of 5.8% but a weaker than expected rise in hiring. Canada’s housing price index came in weaker than expected, deepening the Loonie’s slide. There were no reports released from New Zealand yesterday and none are due today. Canada will print its jobs data and possibly show slower hiring of 15.3K versus the previous 59.2K figure.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 14, 2013)

USD

The US dollar erased some of its progress in the past trading days as the government shutdown and budget impasse continues. President Obama has still rejected the latest proposal for spending cuts, despite the round of negotiations conducted last week. There’s no report on the US schedule for today since banks are on holiday in observance of Columbus Day so watch out for low liquidity and high volatility in today’s price action.

EUR

The euro edged slightly higher to the dollar on Friday, mostly because of USD weakness rather than actual euro strength. Data from the euro zone has been in line with consensus, as the German final CPI reading stayed flat while the wholesale price index showed a 0.7% uptick. For today, euro zone industrial production is up for release and a 0.8% rebound is eyed to follow the previous 1.5% decline. Eurogroup meetings are also set to start today.

GBP

The pound ended another day in the red against the US dollar, although GBP/USD has been finding support around 1.5950. There were no reports released from the UK on Friday and none are due today, so pound trading could be subject to risk flows.

CHF

The franc pretty much finished off where it started on Friday, as there were no reports released from Switzerland then. There are still no reports up for release today so more consolidation could be seen, but be mindful of the impact of U.S. budget updates on risk sentiment.

JPY

The yen gave up a lot of its recent gains on Friday as the improvement in risk sentiment led to a selloff for the lower-yielding currency. There hasn’t been much in terms of data but medium-tier releases have printed stronger than expected results last week. Japanese banks are on holiday today so expect either quiet trading or high volatility from low volumes.

Commodity Currencies (AUD, NZD, CAD)

Thanks to the improvement in sentiment, comdolls were able to make headway on Friday. The Canadian dollar was also supported by the improvement in Canada’s hiring sector, although the actual employment change figure fell short of consensus. There are no reports due from these economies today but watch out for the release of Chinese CPI, as this could have an effect on the Australian dollar. Higher inflation of 2.8% is expected compared to the previous 2.6% reading.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 16, 2013)

USD

The US government shutdown is still ongoing as the White House rejected the latest proposal from the House Republicans regarding spending cuts on healthcare. Meanwhile, the Senate hasn’t come up with a plan regarding raising the debt ceiling before the deadline approaches on October 17. Data from the US was weaker than expected as the Empire State manufacturing index printed a decline instead of the expected improvement. For today, there are no major reports but the Fed Beige Book is up for release. Updates on the budget and debt talks could drive dollar movement today.

EUR

The euro ignored strong data from Germany as it still lost ground to both the dollar and yen yesterday. German ZEW economic sentiment climbed above the 50.0 level, reflecting optimism about the outlook for the euro zone’s largest economy. Meanwhile, the ZEW figure for the entire region was slightly weaker than expected but still indicative of optimism. For today, only euro zone CPI figures are up for release and these aren’t expected to have a huge impact on euro price action.

GBP

The pound managed to consolidate against the US dollar in yesterday’s trading as CPI figures came in stronger than expected. The headline figure showed a 2.7% increase while the core figure printed a 2.2% rise. This was enough to convince traders that the BOE isn’t likely to increase stimulus soon and might even consider reducing easing if inflation keeps rising. For today, UK jobs data are up for release and a 24.3K drop in claimants is expected. If that’s the case, the jobless rate could hold steady at 7.7%.

CHF

The franc lost ground to the dollar in yesterday’s trading as there were no reports from Switzerland to keep it supported. Swiss ZEW economic expectations data is up for release today and another increase could be reported, which might allow the franc to rebound against the dollar.

JPY

The yen was able to end stronger against its major currency counterparts yesterday when risk aversion stayed in the markets. There are no reports due from Japan today so traders will probably use risk sentiment to drive yen flows. Take note also that the parliamentary session geared towards fine tuning the details of the next set of stimulus efforts is already underway so any updates could also move yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to stay resilient against the dollar, particularly the Aussie and the Kiwi. The Loonie was unable to hold its ground as a potential default in the US would also be very damaging to Canada’s economy. New Zealand CPI came in stronger than expected at 0.9%, which means that the RBNZ would have enough room to reduce stimulus if needed. Canadian manufacturing sales are due in today’s US session and could show a 0.3% increase.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 17, 2013)

USD

The US dollar regained ground against the major currencies as U.S. lawmakers passed a bill to raise the country’s debt ceiling and avoid defaulting on its loans. This was enough to spark a brief relief rally for the dollar as traders expected the U.S. government to end the shutdown soon. In terms of data, there hasn’t been much from the U.S. as traders are looking at earnings reports instead. US initial jobless claims and Philly Fed index are up for release today, with claims expected to drop from 374K to 357K for the past week and the manufacturing index slated to dip from 22.3 to 15.4.

EUR

The euro lost some ground to the dollar on the heels of the House-approved debt ceiling bill. Euro zone CPI and core CPI simply came in line with expectations, as the headline figure showed a 1.1% increase while the core CPI printed a 1.0% uptick. Euro zone current account is up for release today and it’s expected to show a larger surplus of 17.7 billion EUR compared to the previous 16.9 billion EUR, but this release is not expected to have a huge impact on euro trading.

GBP

The pound rallied after the UK printed better than expected jobs data but it lost ground later on, as the US Senate passed the bill to raise the debt limit. UK claimant count change fell to its lowest level in five years, as the figure clocked in a 41.7K drop in the number of people claiming jobless benefits. This kept the jobless rate steady at 7.7%. For today, UK retail sales are up for release and another upside surprise might be in the cards. The consensus is for a 0.5% rebound from the previous 0.9% decline.

CHF

The Swiss ZEW economic expectations report printed another improvement, as the index rose from 16.3 to 24.9. For today, there are no reports due from Switzerland so the USD/CHF pair might be more sensitive to updates from Washington. The US government shutdown might end soon, now that the lawmakers have agreed on a deal to raise the debt limit.

JPY

The yen extended its slide to the major currencies as more progress has been made in the US budget debates. There were no reports released from Japan yesterday and none are due today, which suggests that the yen could keep moving to the tune of risk flows.

Commodity Currencies (AUD, NZD CAD)

The comdolls managed to hold steady against the US dollar, as risk appetite improved yesterday. Canadian manufacturing sales turned out weaker than expected at -0.2% versus the estimate at 0.3% and the previous 1.7% increase. No reports are due from Australia and New Zealand today but Canada will be gearing up to release its foreign securities purchases report, slated to show a small increase from 6.09 billion CAD to 7.12 billion CAD.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 18, 2013)

USD

The dollar gained a bit on the news that the Senate and Congress were able to pass the bill on extending the debt ceiling deadline but lost ground later on when risk appetite took over the markets. It didn’t help the Greenback’s cause that Dagong, a Chinese rating agency, downgraded U.S. debt from A to A- and triggered a strong dollar selloff towards the London session. Data from the U.S. was stronger than expected as the Philly Fed index showed a smaller than expected decline. No reports are up for release today but several FOMC officials are set to give speeches.

EUR

The euro turned out to be a big winner yesterday despite the weak current account balance. Instead of widening to 17.7 billion EUR, the surplus came short at 17.4 billion EUR. The euro was boosted by risk appetite and lack of demand for dollars, after the U.S. got doled a debt downgrade by a Chinese rating firm. There are no reports due from the euro zone today so euro trading might be dependent on risk sentiment.

GBP

The pound was lifted by strong U.K. data and upbeat risk sentiment in yesterday’s trading. U.K. retail sales posted a stronger than estimated increase of 0.6% versus 0.5% and the previous month saw an upward revision from -0.9% to -0.8%. For today, there are no reports due from the U.K. so pound trading could be sensitive to risk flows and possible profit-taking.

JPY

The yen was victim to the run in risk appetite yesterday after the U.S. declared that the government shutdown is over. There were no reports released from Japan then and there are no reports due today, which means that the yen might continue to lose ground if risk appetite stays strong until the end of this trading week.

CHF

The franc was able to bounce back against the Greenback yesterday, as the USD/CHF pair fell from the .9180 area to a low of .9020. There were no reports released from Switzerland, as the move was purely a result of dollar weakness on the heels of strong risk appetite and the U.S. debt rating downgrade. There are no reports due from Switzerland today so the franc might be sensitive to risk sentiment again.

Commodity Currencies (AUD, NZD, CAD)

The comdolls extended their wins against the U.S. dollar when risk appetite surged yesterday. Australia’s NAB business confidence printed an improvement for the third quarter of the year but Canada’s foreign securities purchases report showed a weaker than expected result. Earlier today, Chinese GDP came in line with consensus at 7.8% and so did the industrial production figure at 10.2%. However, retail sales was weaker than expected at 13.3% versus the estimate at 13.6%. Canadian CPI is up for release in today’s US session and a 0.2% increase in core inflation is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 21, 2013)

USD

The US dollar was a sore loser on Friday as it continued to sell off against its major counterparts. Risk appetite was still strong that day, after the US government ended its shutdown and avoided a default earlier in the week. As for data, there weren’t any released from the US economy last Friday. US existing home sales and crude oil inventories are up for release today. Existing home sales could dip from 5.41M to 5.38M while crude oil inventories are projected to fall from 6.8M to 3.4M.

EUR

The euro extended its gains against the US dollar on Friday as risk appetite remained in the markets until the end of the trading week. There were no reports released from the euro zone on Friday, as EUR/USD’s action was mostly a result of market sentiment. For today, German PPI is up for release and a 0.1% uptick in producer prices is expected.

GBP

The pound was able to reach the 1.6200 handle against the dollar on Friday as traders continued to take on more risk in their portfolios. There were no reports released from the UK then while earlier today, the Rightmove HPI printed better than expected data as the report showed a 2.8% jump in house prices. No other reports are due from the UK for the rest of the day.

CHF
The franc continued its winning ways on Friday as the USD/CHF pair came close to testing the .9000 major psychological level. There were no reports released from Switzerland as the move was mostly a result of an improvement in risk sentiment. For today, Switzerland’s economic schedule is still empty so USD/CHF might stay sensitive to sentiment for the rest of the day.

JPY

Yen pairs either edged higher or stayed range-bound on Friday, supported by the run in risk appetite. There were no reports released from Japan but the recent improvements in Chinese data were enough to spark confidence during the Asian trading session. Japan just printed a 1.09 trillion JPY trade deficit, slightly larger than the estimated 1.06 trillion JPY deficit, and is set to report its all industries activity index within the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to take advantage of risk appetite on Friday after China printed improvements in its economic data. GDP climbed from 7.5% to 7.8% for the third quarter of the year while industrial production came in line with consensus at 10.2%. Retail sales was slightly weaker than expected. Canada’s CPI was mostly in line with consensus as the core figure printed a 0.2% uptick and so did the headline figure. Canadian wholesale sales is up for release today and a 0.6% uptick is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 22, 2013)

USD

The US dollar was stuck in consolidation against most of its counterparts but managed to end higher against the pound and the yen. Risk appetite was still up in yesterday’s trading but traders seemed a little more cautious as they unwound some of their dollar positions ahead of today’s NFP event. Before that though, the existing home sales report came in weaker than expected with a downward revision in the previous month’s figure. Stronger hiring is eyed for the month of September, as analysts forecast a 182K rise in employment which should keep the unemployment rate steady at 7.3%.

EUR

The euro managed to hold on to its recent levels against the dollar as the German PPI release came in better than expected at 0.3% versus the estimated 0.1% uptick. There are no reports due from the euro zone today so euro traders will focus on the U.S. non-farm payrolls release, which is expected to result in EUR/USD rallies if the actual figure disappoints.

GBP

The pound lost more ground to the dollar yesterday as there were hardly any reports to give the currency an additional boost. For today, the public sector net borrowing report is due and a smaller figure is expected, which would reflect smaller debt by the government. This should be positive for the pound but a bigger mover for pound pairs might be the NFP release which would affect overall market sentiment.

JPY

The yen continued its losing ways to its major counterparts as the Nikkei stock index chalked up almost 1% in gains. Risk appetite was still up during the Asian session, much to the disappointment of the lower-yielding yen. There are no major reports lined up from Japan today so yen trading could also be driven by the sentiment resulting from the NFP release in today’s New York session.

CHF

The franc simply lazed around the charts yesterday since there were no fresh catalysts from Switzerland. Not even the US existing home sales report was able to bust USD/CHF out of consolidation above the .9000 handle as traders are sitting on their hands ahead of the US NFP release.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to the US dollar in yesterday’s trading as there were no further releases that fueled their rallies. The New Zealand dollar pulled back to the .8400 area while USD/CAD bounced from 1.0300. Canadian wholesale sales came in slightly below consensus at 0.5% versus the estimate at 0.6%. Canadian retail sales data is up for release today and weaker increases are expected compared to the previous month’s figures.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (October 23, 2013)

USD

The US dollar lost a lot of ground thanks to the weaker than expected NFP reading of 148K for September. This marks the third consecutive month that the jobs report has missed expectations, although the jobless rate improved from 7.3% to 7.2%. A reading below 150K suggests that the Fed isn’t likely to taper at all for the rest of the year, which explains why the dollar lost its shine. Up ahead, we have US import prices and crude oil inventories data, which aren’t expected to have a huge impact on dollar price action.

EUR

The euro was able to take advantage of dollar weakness yesterday, as the pair surged past the 1.3700 handle and came close to testing 1.3800. There were no reports released from the euro zone on Tuesday and today has a few medium-tier reports on tap. These are the euro zone consumer confidence, Belgium NBB business climate, and German 30-year bond auction. Better than expected data could help the euro extend its gains while weak figures could trigger a quick retracement.

GBP

The pound staged a strong rally yesterday, lifted by stronger than expected public sector net borrowing data and weaker than expected NFP figures from the US. Public sector net borrowing was lower than expected at 9.4 billion GBP while the previous month’s figure enjoyed a downward revision, revealing that the UK’s finances are starting to improve. For today, BOE meeting minutes are up for release and hawkish remarks are likely to help the pound head further north.

CHF

The franc was able to strengthen against the US dollar yesterday, pushing USD/CHF significantly below the .9000 major psychological level. Swiss trade balance printed a higher than expected trade surplus and it also helped that US data was below expectations. For today, there are no reports due from Switzerland as the franc might stay stuck in consolidation or continue to take advantage of dollar weakness.

JPY

The yen lost a lot of ground to its major counterparts except for the US dollar, as risk appetite stayed in the markets yesterday. There were no reports released from Japan then and none are due today, which suggests that yen pairs might be sensitive to sentiment again.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to soar up the charts yesterday, as risk appetite allowed them to rally against the yen and weak US data pushed dollar pairs much higher. Data from Canada was mixed, with core retail sales coming in stronger than expected at 0.4% and headline retail sales falling short of consensus at 0.2%. Earlier today, Australia printed a strong CPI reading of 1.2% which was enough to boost the Aussie as traders predicted this would soon convince the RBA to hike rates. The BOC is set to make its interest rate decision in today’s US session and is likely to keep policy unchanged.

By Kate Curtis from Trader's Way