Daily Market Outlook by Kate Curtis from Trader's Way

USD

The US dollar sank against its peers as the upcoming vote on the healthcare bill could prove to be a crucial moment for the Trump administration. Equities have been on the decline for the past few days as investors continue to doubt the administration’s resolve, although economic data has been mostly in line with expectations. Initial jobless claims are due today, along with a speech by Yellen.

EUR

The euro was mostly weaker against its peers when news of a terror attack in London broke out. Euro zone current account balance turned out weaker than expected and there are no major reports due today so market sentiment could stay in play.

GBP

The pound got hit hard by reports of a terror attack in the Houses of Parliament towards the end of the London session. There have been no major reports out of the UK yesterday while today has the retail sales figure due. Weak wage growth combined with higher domestic inflation probably weighed on consumer spending but analysts are expecting to see a 0.4% rebound after the earlier 0.3% decline.

CHF

The Swiss franc had a mixed performance as it reacted mostly to country-specific data and other headlines. The SNB Quarterly Bulletin was released but this didn’t contain any surprises enough to move the franc. There are no major reports due from the Swiss economy today but SNB member Maechler has a speech lined up.

JPY

The yen was the big winner in recent trading sessions as it took advantage of risk-off flows and anti-dollar sentiment on concerns about the healthcare vote. There were no major reports out of Japan then and none are due today, but additional volatility is expected in the US session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost a lot of ground on market jitters, both weighed by concerns ahead of the Obamacare vote and the risk aversion from the terror attack in London. The EIA report confirmed that stockpiles rose more than expected, keeping oil oversupply concerns in play. In New Zealand, the RBNZ kept rates on hold as expected but sounded less downbeat in brushing off the recent GDP disappointment and affirming that inflation could return to their target band in the medium-term.

By Kate Curtis from Trader’s Way

USD

The US dollar failed to establish a clear direction in recent trading sessions as Congress decided to delay the vote on the healthcare bill. They need 216 votes to gain a simple majority and get Obamacare repealed, but the Freedom Caucus is saying that they cannot make a decision based on the current form of the bill. Data turned out mixed, as initial jobless claims posted a slightly higher 258K increase while new home sales jumped from an upgraded 558K reading to 592K versus the projected 566K figure. Durable goods orders data are due but traders might pay closer attention to the goings-on in Congress.

EUR

The euro was able to benefit from risk-off flows, especially since election jitters appear to be fading. Euro zone consumer confidence improved from -6 to -5 but the GfK German consumer climate index fell from 10.0 to 9.8 instead of improving to the projected 10.1 reading. Flash PMI readings from Germany and France are lined up today, and more improvements could remind traders of the ECB’s less dovish stance.

GBP

The pound was also able to stay afloat, thanks to stronger than expected UK retail sales data. Consumer spending advanced 1.4% versus the projected 0.4% gain but the earlier reading was downgraded to show 0.5% drop. There are no major reports due from the UK today so Brexit headlines could be the main driver for the pound.

CHF

The franc had a mixed performance as it reacted to mostly currency-specific data in the absence of top-tier data from Switzerland. It gained ground to the comdolls but was weaker against the Japanese yen as risk aversion was present. There are no reports due from Swizterland today.

JPY

The yen chalked up another strong trading day as it took advantage of the anti-dollar and risk-off market sentiment. Japanese flash manufacturing PMI fell from 53.3 to 52.6 versus the projected rise to 53.5 but the yen is banking on its safe-haven status so far. There are no other reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls shed a lot of ground to their peers as risk aversion extended its stay in the markets. Canadian CPI reports are up for release today, with the headline figure expected to fall from 0.9% to 0.2% and the core CPI slated to fall from 0.5% to 0.1%.

By Kate Curtis from Trader’s Way

USD

The US dollar is on weak footing after Congress decided to withdraw the healthcare bill, knowing that they didn’t have enough votes to repeal Obamacare. This deals a huge blow of confidence to the Trump administration as investors start to doubt that they can push the rest of their agenda across. US headline durable goods orders came in stronger than expected with a 1.7% gain versus the projected 1.1% increase while the core figure came in line with estimates of a 0.4% uptick. FOMC member Kaplan has a speech lined up.

EUR

The euro extended its gains against its peers when PMI readings from Germany and France turned out stronger than expected and indicated a faster pace of industry expansion across the board. German Ifo business climate data is due today and an improvement from 111.0 to 111.2 is eyed.*

GBP

The pound was also on strong footing last week after the UK printed strong CPI and retail sales figures. However, BBA mortgage approvals turned out weaker than expected at 42.6K versus 44.9K on Friday. There are no reports due from the UK today and the focus turns to the upcoming Article 50 date on March 29.

CHF

The franc had a mixed performance as it weakened to the yen and euro but advanced against comdolls and the dollar. There were no reports out of the Swiss economy last Friday and none are due today so market sentiment could push franc pairs around, along with country-specific events.

JPY

The yen was still the king of pips at the end of the week as it took advantage of risk-off flows and anti-dollar moves. Japanese manufacturing PMI turned out weaker than expected as it fell from 53.3 to 52.6 versus the 53.5 forecast. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly on weaker footing but managed to regain some ground to the dollar. Canadian CPI readings were mostly unchanged, with the headline figure up 0.2% and the core figure up 0.4%. There are no reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

USD

The US dollar found some relief on remarks indicating that Trump will take another shot at the healthcare bill and that the administration is aiming for August in terms of enacting tax reform. There were no reports out of the US economy yesterday, with only speeches by a couple of FOMC members on deck. CB consumer confidence is due and analysts are expecting a dip from 114.8 to 113.9 to reflect weaker optimism.

EUR

The euro continued to advance against its peers when data beat expectations once more. The German Ifo business climate index advanced from 111.1 to 112.3, outpacing the consensus at 111.2 to signal a much stronger pickup in optimism. There are no reports due from the euro zone today as the focus shifts to Brexit-related headlines.

GBP

The pound managed to score a few more wins even with the uncertainty surrounding UK PM May’s plan to invoke Article 50 on March 29. There were no reports out of the UK economy yesterday and none are due today so Brexit-related headlines could drive pound price action.

CHF

The franc was mostly stuck in consolidation but it managed to squeeze out a few gains against the commodity currencies on risk-off flows. There were no reports out of the Swiss economy yesterday and none are due today so the same market factors could stay in play.

JPY

The yen continued to rake in gains against its higher-yielding rivals but gave up some ground to the dollar on renewed hopes of tax and healthcare reform. There were no reports out of the Japanese economy yesterday and there are none lined up today so currency-specific factors could push yen pairs around, along with risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still the biggest losers in recent trading sessions as risk appetite remained weak. There has been a lot of talk on extending the OPEC deal until the end of the year but no official decision has been made yet. BOC Governor Poloz has a speech lined up and any effort to bolster confidence in the Canadian economy could provide some relief for the Loonie.

By Kate Curtis from Trader’s Way

USD

The dollar was able to get back on its feet upon seeing mostly stronger than expected reports. The CB consumer confidence index rose from 116.1 to 125.6 - its highest reading in more than 16 years. The Richmond manufacturing index also turned out higher than consensus as it rose from 17 to 22 instead of dipping to 16. Aside from that, Republicans have emphasized that they will continue to pursue healthcare reform, reviving market confidence in the Trump administration’s plans. FOMC member Evans has a speech today and the US pending home sales report is due.

EUR

The euro gave up some ground as traders are now feeling the jitters ahead of the official start of the Brexit process. There were no reports out of the euro zone yesterday and only the German import prices figure is lined up today. Market watchers are likely to pay closer attention to the goings-on in the EU and overall market sentiment as clues on where to take the euro next.

GBP

The pound dropped sharply in the latter part of the London session and throughout the US session as traders are liquidating their positions to prepare for Brexit risks. A few statements and press conferences are lined up after UK PM May officially invokes Article 50 so there’s a chance for big spikes in either direction. UK net lending to individuals and BBA mortgage approvals are also due today.

CHF

The franc was mostly weaker against its counterparts, except against the British pound. There were no reports out of the Swiss economy yesterday but SNB member Maechler had some jawboning remarks. Credit Suisse economic expectations for the Swiss economy are due today.

JPY

The yen was able to hold on to some of its recent gains as risk aversion stayed in play. There were no reports out of Japan yesterday while today’s retail sales report printed a meager 0.1% uptick versus the projected 0.7% gain. Still, market sentiment could be the main driver for yen pairs today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance against European currencies but were still mostly weaker to the dollar and yen. BOC Governor Poloz didn’t have any reassuring remarks for the Canadian economy as he mentioned that downside risks remain. US EIA crude oil inventories data is due today and a buildup of 1.2 million barrels is expected.

By Kate Curtis from Trader’s Way

USD

Dollar pairs were moving mostly sideways in the past few trading session as traders were on edge with the Brexit developments in Europe. Investors are also waiting for more clues from the Trump administration on their reform agenda. Data from the US economy has been stronger than expected with a 5.5% jump in pending home sales. Final GDP data is due today and a small upgrade from 1.9% to 2.0% is expected.

EUR

The euro tumbled across the board on Brexit jitters even as economic data came in stronger than expected. German import prices rose 0.7% versus the projected 0.4% uptick but this was still weaker compared to the earlier 0.9% gain. Spanish and German flash CPI readings are up for release today and a strong pickup in price levels could be enough to shore up the scared currency.

GBP

The pound managed to shield itself from huge losses as Brexit-related events went by without a hitch. Prime Minister May’s letter to the EU was cordial and open to compromise while the response from Tusk was diplomatic as well. There are no major reports due from the UK today so traders could keep close tabs on the dialogue between the UK government and EU officials.

CHF

The franc reacted mostly to currency-specific events but gave up ground to its non-European counterparts. The Swiss UBS consumption indicator rose from 1.44 to 1.50 to indicate improvement in the sector and the KOF economic barometer is up for release today. A dip from 107.2 to 105.9 is eyed.

JPY

The Japanese yen managed to rake in gains on risk-off flows even though Japanese retail sales turned out weaker than expected. Retail sales ticked up by a measly 0.1% versus the projected 0.7% gain and the earlier 1.0% increase. There are no reports due from Japan today so market sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up some ground on risk aversion but managed to edge higher against the European currencies. US crude oil inventories rose by 0.9 million barrels, lower than the projected buildup of 1.2 million barrels. Underlying inflation figures from Canada are up for release today.

By Kate Curtis from Trader’s Way

USD

The US dollar regained a lot of ground after the final Q4 GDP reading was upgraded from 2.0% to 2.1% on stronger consumer spending and a couple more FOMC members supported the likelihood of seeing three rate hikes this year, allowing the Nasdaq to hit a record high as well. Dollar pairs had a volatile moment when news reports indicated that Trump still plans to penalize currency manipulators. The core PCE price index, as well as personal spending and income data, are lined up today. FOMC member Kashkari, who dissented against a rate hike this month, has a speech lined up.

EUR

The euro sank against its peers when preliminary CPI readings from Spain and Germany fell short of estimates. The former showed a 2.3% gain versus the projected 2.6% increase while the latter posted a 0.2% uptick versus the estimated 0.4% growth. Euro zone flash CPI estimates are due today so weak readings could undermine the ECB’s shift to a less dovish stance. German retail sales, unemployment change, French preliminary CPI and consumer spending are lined up as well.

GBP

The pound regained ground against its peers on the lack of negative headlines pertaining to Brexit negotiations. UK net lending to individuals came in line with expectations but BBA mortgage approvals came up short. UK current account balance, which is slated to show a smaller deficit of 16.3 billion GBP, and revised Q4 GDP are lined up today but reports related to Brexit could be a bigger driver of price action.

CHF

The franc gave up ground against most of its peers but advanced against the euro. The KOF economic barometer improved from a downgraded 106.9 figure to 107.6 instead of dipping to 105.9. There are no reports due from the Swiss economy today so the franc could take its cue from market sentiment or euro zone reports.

JPY

The yen gave up some ground against its counterparts as dollar strength returned and US bond yields recovered. Risk appetite also picked up, leading traders to let go of their safe-haven yen holdings. Data from Japan came in mixed, with household spending down 3.8% versus the projected 1.6% drop and the Tokyo core CPI printed a 0.4% drop in price levels. The jobless rate improved from 3.0% to 2.8% while preliminary industrial production posted a stronger than expected 2.0% gain.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the pickup in risk appetite and advanced against the euro but these currencies were still weaker to the dollar. Chinese official manufacturing PMI improved from 51.6 to 51.8 while the non-manufacturing reading is up from 54.2 to 55.1 to reflect stronger industry expansion. Canadian monthly GDP is due and a 0.3% monthly growth figure is eyed.

By Kate Curtis from Trader’s Way

USD

The US dollar returned most of its recent gains to its forex counterparts as economic data turned out mixed. The core PCE price index was up 0.2% as expected while personal income rose by 0.4% as expected but personal spending was weaker at 0.1%. The Chicago PMI rose from 57.4 to 57.7 instead of dipping to 57.2 but the UoM consumer sentiment index was downgraded from 97.6 to 96.9. US ISM manufacturing PMI is due today and a drop from 57.7 to 57.2 is expected.

EUR

The euro was in free fall against its counterparts on Friday when data turned out mostly weaker than expected. Headline flash CPI slipped from 2.0% to 1.5% versus the 1.8% forecast while the core CPI dropped from 0.9% to 0.7% versus the 0.8% forecast. German retail sales and unemployment change data turned out stronger than expected but CPI, jobs, and spending data from France fell short of consensus. Final manufacturing PMI readings are lined up today.

GBP

The pound recovered against most of its forex peers at the end of the week on the lack of negative headlines pertaining to Brexit. The current account balance also turned out better than expected at a 12.1 billion GBP deficit from the earlier 25.7 billion GBP and the projected 16.3 billion GBP shortfall. The final GDP reading was unchanged at 0.7% as expected. UK manufacturing PMI is on today’s docket and an improvement from 54.6 to 55.1 is expected.

CHF

The franc was stuck in consolidation against the dollar and euro, but it gave up ground to the comdolls and Japanese yen. There were no major reports out of Switzerland then so the franc was reacting to country-specific events. Today has the retail sales report and manufacturing PMI due, with the former slated to show a smaller 0.8% drop and the latter expected to rise from 57.8 to 58.2.

JPY

The yen continued to take advantage of anti-USD and safe-haven flows at the end of the week. Japanese reports turned out mixed as household spending is down 3.8% year-over-year versus the projected 1.6% drop while preliminary industrial production turned out stronger than expected. Today, the Tankan survey printed mixed results as the manufacturing component improved from 10 to 12 versus the estimated reading of 14 while the non-manufacturing component rose from 18 to 20, outpacing the consensus at 19.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to advance against the euro but were still mostly weaker to the dollar and yen as risk aversion remained present. Chinese official manufacturing PMI climbed from 51.6 to 51.8 while the non-manufacturing component improved from 54.2 to 55.1. Over the weekend, the Caixin manufacturing PMI dipped from 51.7 to 51.2. Australian retail sales and building approvals data are due next.

By Kate Curtis from Trader’s Way

USD

The US dollar was mostly confined to ranges at the start of the week but gave up ground to the yen on weaker bond yields. Economic data came in line with expectations as the ISM manufacturing PMI fell from 57.7 to 57.2 as expected. The sub-index for prices advanced from 68.0 to 70.5, outpacing the consensus at 68.5, while the employment component also increased. US factory orders and trade balance are due next.

EUR

The euro held on to its current levels as medium-tier reports came in mostly in line with expectations. The region’s PPI printed a flat reading while unemployment ticked down from 9.6% to 9.5% as expected. Spanish unemployment change data and euro zone retail sales are due today.

GBP

The pound gave up some ground after the UK manufacturing PMI fell short of expectations. The reading slipped from 54.5 to 54.2 to reflect a slower pace of industry expansion instead of improving to the projected 55.1 figure. Construction PMI is due next and no change to the previous 52.5 figure is eyed.

CHF

The franc had another mixed performance as it reacted mostly to currency-specific events despite stronger than expected data from Switzerland. Retail sales increased by 0.6% year-over-year instead of chalking up the projected 0.8% drop while the previous reading was upgraded. The manufacturing PMI improved from 57.8 to 58.6. There are no reports due from the Swiss economy today.

JPY

The Japanese yen was the big winner of the latter trading sessions as it took advantage of risk-off flows from the terrorist attack in Russia and dollar weakness on lower US bond yields. Japan’s Tankan survey printed improvements for both manufacturing and non-manufacturing components, although the former fell short of estimates. The BOJ’s core CPI is due next.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was one of the weaker performers of the day as the BOC Business Outlook Survey failed to give much support. The Aussie also turned lower on downbeat RBA expectations after retail sales turned out weaker than expected. Earlier today, the trade balance printed a larger than expected surplus of 3.57B AUD versus the projected 1.75B AUD surplus. The RBA statement is coming up next.

By Kate Curtis from Trader’s Way

USD

The US dollar had a mixed performance as it weakened to the yen but consolidated against most of its counterparts. Economic data was stronger than expected as the trade deficit narrowed on higher imports while factory orders ticked up by 1.0%. FOMC minutes, ISM non-manufacturing PMI, and ADP non-farm employment change are all lined up today and these could carry a lot of weight in terms of influencing Fed rate hike expectations.

EUR

The shared currency was off to a weak start but was able to recoup some of its losses. Data from the euro zone, namely the Spanish unemployment change and euro zone retail sales, turned out stronger than expected. Final services PMI readings are up for release today.

GBP

The pound was still one of the weaker performers of the day as the UK construction PMI dipped from 52.5 to 52.2 instead of holding steady as expected. The services PMI is due today and an improvement from 53.3 to 53.5 is eyed, although another unexpected fall could mean more losses for the UK currency.

CHF

The franc had a mixed performance as it consolidated to the dollar, lost ground to the euro, but held on to its gains versus the pound. There were no reports out of the Swiss economy yesterday and none are due today, which suggests that country-specific events could continue to stay in play.

JPY

The yen retreated against some of its peers as US bond yields recovered. There were no major reports out of the Japanese economy yesterday and none are due today so risk sentiment and bond yields could continue to push yen pairs around, particularly in reaction to top-tier US releases.

Commodity Currencies (AUD, NZD, CAD)

The comdolls recovered slightly against the yen but were still generally weaker to the dollar. Australia printed a larger than expected trade surplus but the RBA decision was less upbeat as it highlighted the weakness in hiring. Canada’s trade balance was also weaker than expected as it printed a 1 billion CAD deficit. New Zealand reported a 1.6% rebound in dairy prices during the latest GDT auction. Crude oil inventories data is lined up next.

By Kate Curtis from Trader’s Way

USD

The US dollar was in a weak spot against its peers as the FOMC minutes focused on the idea of adjusting the balance sheet and the fact that fiscal stimulus might not take effect until next year, something that was underscored by Speaker Paul Ryan who said that tax reform could take longer than the healthcare overhaul. Data came in mixed, as the ADP non-farm employment change reading came in at 263K versus 184K while the ISM non-manufacturing PMI dipped from 57.6 to 55.2

EUR

The euro had a mixed performance as it reacted mostly to currency-specific events. Economic data turned out mostly weaker than expected as the final services PMI readings were downgraded. German factory orders data is due today, along with the ECB meeting minutes.

GBP

The pound rebounded against its peers as the UK services PMI climbed from 53.3 to 55.0, higher than the consensus at 53.5. Only the housing equity withdrawal report is lined up next and UK manufacturing production and a speech by BOE Governor Carney are lined up on Friday.

CHF

The franc also had a mixed performance as it functioned mostly as a counter currency. There were no reports out of the Swiss economy yesterday and only the CPI is up for release today. A 0.2% uptick is eyed, slower than the earlier 0.5% increase.

JPY

The Japanese yen gave up some gains against its counterparts earlier in the day but later on resumed their climb as US bond yields declined. The Japanese consumer confidence index is still up for release and a climb from 43.1 to 43.5 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls slid lower to the yen and the European currencies as risk aversion remained in play. Crude oil inventories increased by 1.6 million barrels instead of falling by 0.1 million barrels. The Chinese Caixin services PMI dropped from 52.6 to 52.2 instead of improving to the 53.2 consensus. Canadian building permits is due next.

By Kate Curtis from Trader’s Way

USD

The US dollar was mostly stuck in consolidation against its peers as traders appear to be waiting for the NFP report and for geopolitical risks to subside. The Challenger job cuts report showed a 17% increase in March while initial jobless claims dropped to 234K versus the projected 251K figure. The NFP could show an increase of 174K in hiring, which should be enough to keep the unemployment rate unchanged at 4.7%.

EUR

The euro gave up some ground after ECB Governor Draghi admitted that they may have been too early to call the pickup in inflation. A couple of policymakers echoed this sentiment in the ECB meeting minutes. German factory orders came in line with estimates of a 3.4% gain and industrial production and trade balance data are due today. French trade balance and industrial production are also up for release.

GBP

The pound shed some ground as Brexit jitters resurfaced, with traders worrying that neither the UK nor the EU will soften their stance during the negotiations. UK manufacturing and industrial production reports are lined up today. The former could show a 0.3% gain while the latter is slated to post a 0.2% uptick. The goods trade balance is also due, along with the UK Halifax HPI.

CHF

The franc had another mixed day as the lack of catalysts from Switzerland left the currency reacting to country-specific events. The Swiss jobless rate is due today and no change from the earlier 3.3% reading is eyed. SNB foreign currency reserves data is also on the docket, possibly providing clues as to whether the central bank is intervening or not.

JPY

The yen kicked higher in the Asian session as headlines revealed that the US launched airstrikes on Syria in response to the chemical attack earlier this week. Japanese average cash earnings rose 0.4% versus the projected 0.5% gain while the earlier reading was downgraded to 0.3%.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies turned lower as risk aversion peeked back in the markets on news of the US military response to Syria. Canadian building permits slid 2.5% and the jobs report is up for release next. Analysts are expecting to see a 5.7K increase in hiring and an uptick in the jobless rate to 6.7%. Canada’s Ivey PMI is also due and a recovery from 55.0 to 56.3 is eyed.

By Kate Curtis from Trader’s Way

USD

The US dollar was off to a weak start for the week as risk appetite returned on the outcome of the French elections. Besides, data from the US was mostly weaker than expected on Friday as both flash manufacturing and services PMI printed weaker than expected results. For today, more speeches from dovish FOMC member Kashkhari are lined up.

EUR

The euro popped higher against its peers over the weekend as the first round of French elections left Macron and Le Pen going head to head in the next round in May. This could mean stronger odds of Macron beating Le Pen, thereby reducing odds of a Frexit. Flash manufacturing and services PMI from Germany and France turned out mixed on Friday while the German Ifo business climate index is due today.

GBP

The pound took its lead from the euro and also rallied on the results of the French elections. Apart from that, the UK currency is also riding on the bullish wave after the UK snap elections were announced. Only the Rightmove HPI and CBI industrial order expectations index are due today and strong readings could keep the currency afloat.

CHF

The franc was also able to advance against most of its major counterparts when the French election results were announced but it was no match to pound and euro strength. There were no reports out of the Swiss economy on Friday and none are due today so the currency could keep reacting to country-specific events.

JPY

The Japanese yen gave up a lot of ground over the weekend as risk appetite was off to a strong start this week. Data from Japan came in line with expectations on Friday and none are due today so the currency is extra sensitive to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls edged higher to the lower-yielding currencies but were left behind by the euro and pound. Canadian inflation reports came in mostly in line with expectations, except for the headline reading which posted a 0.2% uptick versus the projected 0.4% rise. New Zealand and Australia have bank holidays today.

By Kate Curtis from Trader’s Way

[B]USD[/B]

The US dollar regained ground on a strong equity market performance on expectations for Trump’s tax reform announcement on Wednesday. There were no major reports out of the US and markets seemed to shrug off cautious remarks from FOMC dissenter Kashkari. For today, US CB consumer confidence and new home sales data are due, along with the Richmond manufacturing index.

[B]EUR[/B]

The euro had a strong start for the week but gave up some of its gains and filled some gaps throughout the sessions that followed. German Ifo business climate data was better than expected as the reading rose from 112.4 to 112.9. Traders now seem to be turning their attention to the upcoming ECB statement, which could show that the central bank is reverting to its dovish stance. There are no reports due today.

[B]GBP[/B]

The pound also stalled from its climb as CBI industrial order expectations data disappointed. The index fell from 8 to 4 to reflect weaker growth instead of improving to the estimated reading at 9. UK public sector net borrowing data is up for release next and a larger deficit of 2.6 billion GBP is eyed.

[B]CHF[/B]

The franc failed to establish a clear direction in trading as it mostly reacted to currency-specific events. There are still no reports due from the Swiss economy today so the franc could be sensitive to market sentiment again.

[B]JPY[/B]

The yen regained some ground after gapping down against its peers over the weekend as risk aversion returned to the markets. There were no major reports out of Japan and none are due today so market sentiment could still be the main driving factor.

[B]Commodity Currencies (AUD, NZD, CAD)
[/B]
The comdolls resumed their weak stance when risk aversion returned to the markets. Canadian wholesale sales was weaker than expected with a 0.2% drop versus the projected 2.1% gain. There are no reports due from the comdoll economies today…

[I]By Kate Curtis from Trader’s Way[/I]

USD

The US dollar regained a bit of ground against its peers despite mixed reports from the US. Housing figures were generally better than expected but the Richmond manufacturing index dipped while CB consumer confidence also turned lower. Traders are now turning their focus to Trump’s upcoming tax reform announcement and this might cause volatility for the dollar as there are no other major catalysts on deck.

EUR

The euro resumed its climb as more polls indicated a widening lead for Macron versus Le Pen, thereby reducing odds of a Frexit. Medium-tier data from the euro zone also turned out mostly stronger than expected while a report from Reuters suggested that the ECB might remove references to downside risks in their upcoming policy statement. There are no major reports due from the euro zone today.

GBP

The pound also squeezed out some gains against most of its rivals, despite a larger than expected public deficit. The net borrowing figure came in at 4.4 billion GBP, higher than the projected reading at 2.1 billion GBP. There are no reports lined up from the UK economy for today.

CHF

The franc had a mixed performance as the lack of data from Switzerland left it reacting mostly to currency-specific events. Swiss UBS consumption indicator and Credit Suisse economic expectations data are up for release next.

JPY

The yen lost a lot of ground to its peers as risk appetite returned and weekend gaps were left unfilled. Japan is set to print its all industries activity index next and might show a 0.8% uptick, higher than the earlier 0.1% increase, but traders are likely to put more focus on market sentiment and bond yields with the Trump tax announcement coming up.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as they weakened to the dollar and European currencies but advanced to the yen. Trump talked tough on the Canadian lumber and dairy industry, weighing on the Loonie despite the pickup in crude oil. Australia’s quarterly CPI is due next and a 0.6% uptick is eyed while Canada is scheduled to print its retail sales figures next.

By Kate Curtis from Trader’s Way

USD

The dollar had a volatile run during the release of the Trump administration’s tax reform plan but ended the day mostly unchanged. Up ahead, US initial jobless claims, durable goods orders, and pending home sales data are due next, although traders could hold out for the advanced GDP release on Friday.

EUR

The euro continued to advance against its peers on strengthening expectations that Macron could win the French presidency. There were no reports released from the euro zone yesterday while today has the German preliminary CPI and GfK consumer climate index. Traders are expecting to see a 0.1% dip in German price levels and an improvement in the index from 9.8 to 9.9. The ECB statement is also coming up and less dovish remarks could extend the euro’s gains.

GBP

The pound also extended its gains against its rivals despite the lack of top-tier data from the UK. Only the CBI realized sales index is due today and a dip from 9 to 6 is eyed, but a stronger than expected result could assure traders of the resilience of the UK economy.

CHF

The franc had a mixed performance as it weakened to its European counterparts but strengthened against the rest of its peers. Data from Switzerland was mixed as the Swiss UBS consumption indicator improved from 1.45 to 1.50 while the Credit Suisse Economic Expectations index fell from 29.6 to 22.2. Swiss trade balance is due next and a smaller surplus of 3.01 billion CHF is expected.

JPY

The yen tossed and turned but ultimately recovered some of its losses after US bond yields failed to surge on the tax reform announcement. Earlier today, the BOJ refrained from making any adjustments in its monetary policy and interest rates as expected. BOJ Governor Kuroda’s press conference is still coming up.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were among the weakest performers, particularly the Loonie which was hit by mixed Canadian retail sales and warnings of a property bubble from the CHMC. Australia’s quarterly CPI also came in a notch below expectations at 0.6%. On a less downbeat note, crude oil inventories posted a larger than expected draw of 3.6 million barrels.

By Kate Curtis from Trader’s Way

USD

The dollar had a mixed performance as it mostly reacted to currency-specific events. It weakened to the pound and yen but advanced against the euro and comdolls. Durable goods orders figures came in below expectations, and so did pending home sales and the initial jobless claims. For today, the advanced GDP report is due and a slower growth figure of 1.3% is eyed compared to the previous period’s 2.1% gain. Chicago PMI and speeches by FOMC members Brainard and Harker are also lined up.

EUR

The euro advanced during the ECB statement as policymakers acknowledged that recent data is reflecting strong and continued growth. However, the shared currency retreated after Draghi admitted that underlying inflationary pressures remain subdued. He also said that interest rates could remain at current low levels even after QE ends and that they haven’t decided on their options in June. French and Spanish flash GDP data are due, along with French consumer spending and German retail sales figures.

GBP

The pound held on to its recent gains and went for more as the CBI realized sales figure jumped from 9 to 38 instead of falling to 6. This medium-tier leading indicator reflects the resilience of the UK economy even with Brexit uncertainties, shoring up demand for the pound. UK preliminary GDP is due today and a 0.4% expansion is eyed, slightly lower than the earlier 0.6% growth figure.

CHF

The franc was mostly stronger, except against the British pound. Swiss trade balance came in stronger than expected at a surplus of 3.10 billion CHF compared to the expected 3.01 billion CHF surplus but smaller than the earlier 3.12 billion CHF figure. The Swiss KOF economic barometer is due today and an uptick from 107.6 to 107.7 is eyed. SNB head Jordan also has a speech lined up.

JPY

The yen regained ground as pairs tested technical levels for the week. Economic data from Japan turned out mixed, with household spending and preliminary industrial production falling short of estimates and retail sales printing strong results. Inflation reports were mostly in line with estimates.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were generally weaker as risk aversion was in play and there were no major reports to give them a boost. New Zealand’s ANZ business confidence index dipped from 13 to 11 while Australia’s quarterly PPI was stronger than expected at 0.5% versus 0.3%. Canada’s monthly GDP is due today and a 0.1% uptick in growth is eyed.

By Kate Curtis from Trader’s Way

USD

The US dollar was mostly stronger against its rivals on Friday even after the US advanced GDP reading turned out weaker than expected. The economy grew by 0.7% in Q1, lower than the projected 1.3% reading and the earlier 2.1% growth figure. However, underlying data such as the GDP price index and employment cost index turned out stronger than expected while the Chicago PMI also beat expectations. Core PCE price index and ISM manufacturing PMI, along with personal income and spending data, are due today but traders could pay more attention to Treasury Secretary Mnuchin’s speech.

EUR

The euro held on to most of its recent gains as flash CPI readings from the region churned out upbeat results. The headline estimate rose from 1.5% to 1.9%, outpacing the 1.8% consensus, while the core reading climbed from an upgraded 0.3% reading to 0.8%. Medium-tier data from Germany and France fell short of estimates but Spain’s flash GDP reading was stronger than expected at 0.8%. Euro zone banks are closed for the Labor Day holiday today.

GBP

The pound was also able to stay afloat even after reports confirming that EU leaders agreed to take a tough stance on Brexit. UK preliminary GDP also came short of consensus with a 0.3% growth figure versus the projected 0.4% expansion. UK banks are also closed for the holiday today.

CHF

The franc was mostly weaker against its European counterparts but managed to advance on risk aversion. The Swiss KOF economic barometer reading fell from 107.2 to 106.0 instead of improving to the projected 107.7 reading. Swiss banks are closed for the holiday today but retail sales data is due and a 0.5% year-over-year uptick is eyed.

JPY

The yen regained some ground against its counterparts as Japanese data turned out mostly stronger than expected on Friday. Inflation reports were in line with estimates while retail sales and the jobless rate turned out better than expected. Household spending and preliminary industrial production fell short. There are no major reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was off to a weak start as Chinese PMI readings printed over the weekend were below expectations. The manufacturing PMI dipped from 51.8 to 51.2 versus the projected fall to 51.7, reflecting a much slower pace of industry expansion than expected, while the non-manufacturing reading dropped from 55.1 to 54.0. In Canada, the monthly GDP reading showed a flat figure instead of the projected 0.1% uptick. No other top-tier reports are lined up for today.

By Kate Curtis from Trader’s Way

USD

The US dollar was unable to establish a clear direction in recent trading as the latest batch of reports fell short of estimates. Personal income posted a meager 0.2% uptick versus the projected 0.4% gain while personal spending was flat instead of rising by the estimated 0.2% reading. The ISM manufacturing PMI also dropped from 57.2 to 54.8 versus the estimated 56.6 figure. For today, only the total vehicle sales report is due.

EUR

The euro gave back some of its recent gains to the commodity currencies but kept advancing to the yen. Most European banks were closed for the holiday yesterday so the move was attributed to risk-taking. For today, final manufacturing PMI readings from the top economies are due and upbeat results could drive the shared currency higher.

GBP

The pound also retreated to the comdolls but managed to hold on to its gains against the yen and dollar. UK banks were closed for the holiday yesterday so there were no major reports released while today has the manufacturing PMI on tap. Analysts are expecting to see a dip from 54.2 to 54.0 but a higher than expected read could still push the UK currency higher.

CHF

The franc also had a mixed performance as it reacted mostly to currency-specific events. Swiss retail sales turned out much stronger than expected with a 2.1% year-over-year gain versus the estimated 0.5% uptick and the earlier 0.2% increase. Swiss manufacturing PMI is due today and a dip from 58.6 to 58.2 is eyed.

JPY

The yen was a big loser in recent trading sessions as risk appetite picked up. There were no major reports from Japan recently and the BOJ minutes didn’t contain much surprises. The BOJ core CPI is due next and a rise from 0.1% to 0.2% is expected.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi led the pack while the Loonie lagged on talks of higher oil production in Libya. However, the Aussie stalled from its climb when the Caixin manufacturing PMI dropped from 51.2 to 50.3 instead of improving to the estimated 51.4 reading. The RBA decision is due next and no changes to monetary policy is eyed while the quarterly jobs report from New Zealand is lined up for the late US session.

By Kate Curtis from Trader’s Way

USD

The US dollar chalked up a mixed performance on the lack of top-tier data from the US. Total vehicle sales was weaker than expected while reports released earlier in the week signaled a slowdown in the consumer sector. ADP non-farm employment change and ISM non-manufacturing PMI are lined up today, but the FOMC statement could lead to stronger movement for the dollar. No actual policy changes are expected but a change in their bias could influence dollar trends.

EUR

The euro held on to its gains against the yen but caved to comdoll strength. Medium-tier reports were mostly in line with expectations, save for the region’s unemployment rate which was unchanged at 9.5% instead of improving to the 9.4% consensus. Spanish and German unemployment change figures are lined up today, along with the region’s flash GDP reading which could show a slightly faster pace of growth at 0.5%.

GBP

The pound was able to advance, thanks to stronger than expected UK manufacturing PMI. Analysts expected to see a fall from 54.2 to 54.0 but the actual reading surged to 57.3 to reflect a much stronger pace of industry growth. Construction PMI is due today and a dip from 52.2 to 52.1 is eyed, although this report doesn’t normally trigger a large reaction from the pound.*

CHF

The franc gave up some ground when the Swiss manufacturing PMI turned out weaker than expected. The reading fell from 58.6 to 57.4 versus the estimated drop to 58.2 to reflect a slower pace of industry expansion. There are no reports due from Switzerland today so the franc could take its cue from euro zone reports or market sentiment.

JPY

The yen continued to slide lower against most of its peers on risk appetite. Japanese banks are closed for the holiday so liquidity is down. Yen pairs could react to changes in US bond yields following the release of leading jobs indicators, namely the ADP report and ISM non-manufacturing PMI, and the FOMC statement.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi led the pack in terms of gains when the GDT auction and quarterly jobs report yielded strong results. Dairy prices rose 3.6% to mark its fourth consecutive gain while employment rose by 1.2% in Q1 versus the 0.8% consensus. Crude oil dipped below $47.50 per barrel on talks of ending the conflict in Libya and Saudi Arabia entertaining the idea of $45/barrel Brent crude oil.*

By Kate Curtis from Trader’s Way