Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
182

USD

The US dollar barely budged against most of its major counterparts in recent trading, save for the Australian dollar and Canadian dollar. There have been no reports released from the US economy yesterday and there are still no reports lined up for today, which suggests that the Greenback could be sensitive to market sentiment and currency-specific data.

EUR

The euro formed a reversal pattern against the US dollar, indicating that the recent selloff might be over soon. Data from the euro zone came in mixed yesterday, with the German ZEW economic sentiment index coming short of expectations and dropping from 62.0 to 61.7 instead of improving to the estimated 63.4 reading. For the euro zone region though, the ZEW index climbed from 68.3 to 73.3, beating the 70.2 consensus. There are no reports lined up from the euro zone today though.

GBP

The pound retreated to the dollar in yesterday’s trading, as the CBI industrial order expectations came in very weak. Analysts were expecting a small dip from 12 to 10, but the index slipped all the way down to -2. Up ahead, we have the claimant count change release and the minutes of the latest BOE monetary policy meeting. Given the trend in jobs data recently, the UK might be in for weak figures. The figure is expected to show a 33.8K drop in unemployment while the minutes could show a unanimous decision in keeping policy unchanged. However, weaker than expected jobs data and a dovish BOE minutes might result to a pound selloff.

CHF

The franc continued to edge lower in yesterday’s trading as there were no economic reports to give the Swiss currency support. Today though, the Swiss ZEW economic expectations index is due and it could show an improvement from the 39.4 previous reading. If that’s the case, USD/CHF might retreat from its recent rallies.

JPY

The yen had a mixed performance in yesterday’s trading as it simply reacted to its counterparts’ data. For today though, the BOJ is set to make its monetary policy decision and possibly express its willingness to ease further if the sales tax hike hurts overall economic growth. If that happens, the yen might be in for more losses as the Nikkei index could close higher in anticipation of further easing.

Commodity Currencies (AUD, NZD, CAD)

The Canadian dollar broke to the upside from its consolidation to the dollar, as Canadian data came in mixed. Although manufacturing sales beat expectations with a 1.0% increase, wholesale sales stayed flat instead of rising by 0.3%. Up ahead, we have the BOC rate decision and despite the recent round of weak data, Poloz has indicated that they are not ready to cut rates just yet. As for Australia, inflation data came in stronger than expected and boosted the Aussie, along with the slight improvement in Westpac consumer sentiment data.

By Kate Curtis from Trader’s Way

183

USD

The US dollar had a mixed performance in yesterday’s trading, as it consolidated to the euro, lost ground to the pound, then strengthened against the comdolls. There were no reports released from the US economy recently, which explains why the Greenback is simply reacting to currency-specific events. For today, US existing home sales and jobless claims data are up for release and these might not have such a pronounced impact on dollar movement.

EUR

The euro moved sideways to the dollar in yesterday’s trading since there were no major reports released from the euro zone. With euro pairs mostly in consolidation, traders are probably waiting for today’s set of data before taking any huge bets. French and German manufacturing and services PMI figures are up for release today and small improvements are expected. Stronger than expected figures might trigger an upside break for EUR/USD or EUR/JPY while weak data could lead to a euro selloff.

GBP

The pound strengthened against its major currency rivals in yesterday’s trading, thanks to the strong improvement in the jobless rate. Although the claimant count change came in weaker than expected at -24.0K versus the estimate at -33.8K and the previous figure was revised to show a lower decline in joblessness, the unemployment rate improved from 7.4% to 7.1%. This is just one point closer to the BOE’s 7% target rate, wherein they would start to consider hiking rates. Meanwhile, the BOE minutes revealed that the vote to keep interest rates and asset purchases unchanged was unanimous.

CHF

The franc barely budged from its current levels against the dollar when the Swiss ZEW economic expectations report printed a decline. The figure dropped from 39.4 to 36.4, reflecting lower confidence in the economy. There are no reports due from Switzerland today so USD/CHF might stay stuck in consolidation, unless US reports print surprises.

JPY

The yen lost ground to the Aussie and the pound but was able to flex its muscles against the Loonie. The BOJ decided to keep their monetary policy unchanged for the meantime but reiterated that they’re ready to ease further if the sales tax hike hurts overall economic growth. There are no major reports lined up from Japan today so it could be all about market sentiment driving yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Loonie gave up a lot of ground to its major counterparts in recent trading, thanks to the dovish rhetoric of the BOC. Poloz spoke of a possible rate cut, as inflation remains weak and the Loonie remains strong. He pointed out that the appreciating Loonie is hurting the country’s exports. As for the Aussie and Kiwi, these comdolls simply resumed their weakness to the dollar as risk appetite waned. The Chinese HSBC PMI is up for release today and might have a huge impact on their movement.

By Kate Curtis from Trader’s Way

184

USD

The US dollar lost its shine in yesterday’s trading since economic data printed mostly disappointing results. The flash manufacturing PMI slipped from 54.4 to 53.7 instead of improving to the estimated 55.2 reading. Existing home sales came in at 4.87M instead of the consensus at 4.94M while the previous month’s reading was revised down. The only report that came in better than expected was the initial jobless claims data, which showed a 326K reading instead of the estimated 331K figure. There are no reports lined up from the US economy today.

EUR

The euro continued to rally against its major counterparts in the London and US sessions, as the euro zone PMIs came in stronger than expected. French manufacturing and services PMIs both beat expectations and showed slower contraction in the industries while German PMIs reflected stronger expansion. Overall, the region’s manufacturing and services PMIs also beat expectations and reflected industry expansion. Euro zone consumer confidence also came in better than expected and improved from -14 to -12. Only the Italian retail sales and Belgian NBB business climate data are up for release today.

GBP

The pound continued its rallying ways in yesterday’s trading, despite weaker than expected CBI realized sales. The reading fell from 34 to 14, lower than the estimate at 28, reflecting lower sales volume. BBA mortgage approvals are up for release today and a good reading might push the pound higher up the charts.

CHF

The franc regained ground against the US dollar and the euro in yesterday’s trading although there were no reports released from Switzerland. Their calendar is still empty for today, which suggests that franc movement might continue to depend on risk sentiment.

JPY

The yen was a big winner in yesterday’s trading, as the Japanese currency took advantage of the surge in risk aversion. There have been no major reports released from Japan yesterday and none are due today, which means that yen pairs could keep reacting to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar gave up ground again in yesterday’s trading, as China’s HSBC manufacturing PMI fell back in the contractionary zone. The reading dipped from 50.5 to 49.6 instead of improving to 50.6 while the CB leading index posted a weak increase of 0.4% compared to the previous reading. Over in Canada, the retail sales report printed upside surprises for both core and headline figures. Canadian core and headline CPI are up for release today and these might have a huge impact on Loonie movement since the BOC has spoken of weak inflation.

By Kate Curtis from Trader’s Way

185

USD

The US dollar packed in the gains against the British pound and Australian dollar on Friday, as these currencies were hit hardest after the Davos World Economic Forum. The economic leaders affirmed the strength in the US economy, also adding to support for the US dollar. US new home sales data is up for release today and the report could show a dip from 464K to 457K.

EUR

The euro consolidated against most of its major counterparts in recent trading, as economic leaders discussed the possibility of deflation in the euro zone region. Draghi mentioned that the ECB will keep interest rates low for an extended period but haven’t discussed the possibility of aggressive asset purchases just yet. Eurogroup meetings are going on today and there are no major reports lined up from the euro zone, except for the German Ifo business climate figure.

GBP

The pound lost a lot of ground to its counterparts on Friday when BOE Governor Carney said that they will have to revise their forward guidance strategy. Previously the BOE said that it would consider hiking rates once the jobless rate falls below 7.0% but Carney reiterated that reaching the threshold doesn’t guarantee an immediate rate hike. There are no reports due from the UK today.

CHF

The franc gained ground against the dollar on Friday, despite the lack of data from Switzerland. There are still no reports due from Switzerland today so it could be all about risk sentiment driving franc price action for the upcoming trading sessions.

JPY

The yen continued its winning ways against the other major currencies on Friday as risk aversion took control of the markets. In addition, economic leaders in Davos confirmed that Japan is starting to recover and that inflation is picking up. There are no reports lined up from Japan today, as the yen might keep taking advantage of the risk-off market environment.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar continued to lose ground on Friday as risk aversion set in. There have been no major reports released from Australia then and none are due today. There are also no reports due from Canada and New Zealand, which suggests that risk sentiment might keep driving their currencies for now.

By Kate Curtis from Trader’s Way

186

USD

The US dollar lost a bit of ground to its major counterparts, most notably the Australian dollar and the Japanese yen, as data from the economy came in weaker than expected. New home sales showed a 414K figure instead of the estimated 457K reading while the previous month’s report was revised down. Headline and core durable goods orders are up for release today, along with the CB consumer confidence report. The latter could show an improvement from 78.1 to 78.3 but durable goods orders are projected to be slightly weaker compared to the previous month’s readings.

EUR

The euro continued to move sideways against the US dollar and the Japanese yen, thanks to the lack of data from the euro zone yesterday. Only the German Ifo business climate report was released and this showed a stronger than expected 110.6 reading, up from the previous 109.5 figure. German import prices are up for release today and the report might show a 0.3% uptick.

GBP

The pound bounced back to life in yesterday’s trading, as traders booked profits ahead of today’s GDP release. There have been no major reports released from the UK yesterday. The GDP report might show 0.7% growth, slightly lower compared to the previous 0.8% GDP figure. However, a weaker than expected reading might trigger a sharp selloff for the pound, as it would confirm the BOE’s bias that growth is not that strong even if the jobless rate is moving closer to their target.

CHF

The franc held on to its wins to the dollar in yesterday’s trading even though there were no reports released from Switzerland. There are still no reports lined up from Switzerland today so USD/CHF might keep moving to the tune of US data.

JPY

The yen took a pause from its recent rallies, except against the US dollar. Risk sentiment seemed to improve yesterday, forcing most traders to book profits off nearby support levels for the yen pairs. There are no reports due from Japan today so the Nikkei’s performance could dictate where yen pairs are headed.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar recovered against the Greenback, as data from Australia printed improvements. NAB business confidence improved and showed better business conditions while the CB leading index showed a 0.2% uptick. No other reports are due from the comdoll economies for today so risk sentiment might drive price action for these pairs.

By Kate Curtis from Trader’s Way

187

USD

The US dollar fought back against its major currency counterparts in recent trading, taking EUR/USD down to the 1.3650 area and USD/JPY up to the 103.00 mark. Data from the US was weaker than expected, with the headline durable goods orders report showing a 4.3% decline and the core durable goods orders printing a 1.6% drop. This was weak compared to the estimated 1.9% and 0.7% uptick respectively. For today, the big event is the FOMC statement, as traders are waiting to see if the Fed will still push through with its taper despite the weak December NFP data.

EUR

The euro edged a bit lower than its counterparts when German import prices printed a flat reading. This revived talks of potential deflation in the euro zone, as traders became concerned that the largest economy might also be in danger. German GfK consumer climate is up for release today and the index might show an improvement from 7.6 to 7.8. Also due today is data on euro zone private loans and money supply.

GBP

The pound showed a bit of weakness yesterday when the U.K. GDP simply came in line with expectations of 0.7% growth. This is slightly slower compared to the previous quarter’s 0.8% GDP reading. BOE Governor Carney is set to testify today and if he issues another round of downbeat comments regarding monetary policy and the jobless rate, the pound might be in for more losses.

CHF

The franc lost some ground to the dollar in yesterday’s trading, as the USD/CHF pair found support around the .8950 minor psychological level and climbed back to the .9000 mark. There have been no reports released from the Swiss economy yesterday while today has the UBS consumption indicator on tap. The index came in at 1.43 in the previous month and a higher reading might be positive for the franc.

JPY

The yen gave up some of its recent gains to its counterparts when risk sentiment improved in recent trading. However, the Nikkei index chalked up a 0.17% decline for the day, indicating that market sentiment isn’t so good in the Asian markets. There have been no major reports released from Japan yesterday and none are due today, which suggests that risk sentiment might keep driving price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a small recovery to the dollar in yesterday’s trading, but most were unable to hold on to their gains. There have been no major reports released from Australia, Canada, or New Zealand recently as the comdolls simply moved to the tune of risk sentiment. Later on, the RBNZ will make its interest rate decision and traders are expecting to hear how the central bank plans to address inflation in the country.

By Kate Curtis from Trader’s Way

188

USD

The US dollar regained ground after the FOMC decided to proceed with its cautious taper and reduce monthly bond purchases by $10 billion, as announced in their December monetary policy statement. Bernanke also reiterated that the Fed plans to keep interest rates unchanged until the jobless rate stays below 6.5% and inflation reaches the 2% target. US advanced GDP is up for release today and it is expected to print a 3.3% reading.

EUR

The euro gave up some of its recent gains to the dollar when the FOMC statement rolled along. The German GfK consumer climate index actually came in better than expected with a 8.2 reading versus expectations of a small improvement from 7.7 to 7.8. Up ahead, German employment change and Spanis flash GDP data are up for release, which means there might be additional volatility for the euro today.

GBP

The pound was stuck mostly in consolidation to the dollar since there were no major reports released from the UK yesterday. BOE Governor Carney didn’t stir a ruckus in the markets with his speech, as he simply repeated most of its remarks from before. Data on the UK’s net lending to individuals and mortgage approvals are up for release today.

CHF

The franc bounced back to the dollar in recent trading, as the Swiss UBS consumption indicator jumped to 1.80. The bad news though was the previous month’s figure suffered a downward revision from 1.43 to 1.40. The Swiss KOF economic barometer is up for release today and analysts are expecting to see a rise from 1.95 to 2.02, which might allow the franc to extend its gains.

JPY

The yen continued to take advantage of risk aversion in recent trading, packing on gains against the pound and the Australian dollar. Earlier today, Japanese retail sales printed disappointing results, with consumer spending up by an annualized 2.6% versus the estimated 3.9% growth. This was also lower compared to the previous 4.1% increase. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar carried on with its losing ways to the dollar and the yen, despite a quick bounce yesterday. Data from China showed a contraction in the manufacturing sector, as the HSBC final manufacturing PMI dipped to 49.5. The Reserve Bank of New Zealand kept interest rates unchanged, triggering a quick selloff for the Kiwi. No other reports are due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way

189

USD

The US dollar lost some ground against some of its major counterparts in recent trading, as data from the US economy turned out weaker than expected. The advanced GDP reading came in at 3.2% versus the estimated 3.3% growth figure while initial jobless claims posted a higher than expected 348K increase. The pending home sales report was a huge disappointment with its 8.7% decline instead of the mere 0.1% expected downtick. Medium-tier reports such as core PCE price index, personal income and spending, and Chicago PMI are due from the US today.

EUR

The euro finally gave way from consolidation in yesterday’s trading as risk aversion took over the markets. Data from the euro zone was actually mixed, with German preliminary CPI coming in weak and jobs data coming in strong. The preliminary CPI showed a 0.6% decline instead of the estimated 0.4% dip while the unemployment change came in at -28K, better than the projected -5K figure. German retail sales, French consumer spending, and the region’s CPI figures are up for release today.

GBP

The pound lost further ground in recent trading, despite better than expected net lending to individuals data. The report showed a 2.3 billion GBP figure, higher than the projected 1.9 billion GBP reading. However, M4 money supply and mortgage approvals were slightly weaker than expected. Earlier today, the UK GfK consumer confidence figure printed a rise from -13 to -7, better than the consensus at -12. No other reports are due from the UK today.

CHF

The franc was unable to bounce back to the dollar in yesterday’s trading as the Swiss KOF economic barometer came in a bit below consensus. The figure rose from 1.95 to 1.98 but was short of the estimate at 2.02. There are no reports due from Switzerland today so the franc might simply react to US data.

JPY

The yen gained on risk aversion yesterday but gave back most of its gains earlier today when Japan released a mixed set of economic data. The national core CPI was stronger than expected at 1.3% while the Tokyo core CPI came in as expected at 0.7%. Household spending was weaker than expected but the jobless rate showed an improvement from 4.0% to 3.7%. Housing starts is still set for release later on today but it appears that the yen is losing ground because of the improvement in sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls put up a good fight against the dollar in yesterday’s trading, as AUD/USD bounced back to .8800 while NZD/USD held on to the .8150 handle. Data from Australia was mostly weaker than expected while China also showed signs of slowing down. Earlier today, Australia’s PPI came in at 0.2%, weaker than the estimated 0.7% increase. Canadian monthly GDP is up for release today and a 0.2% growth figure is expected.

By Kate Curtis from Trader’s Way

190

USD

The US dollar had a mixed performance on Friday, as it gained ground against some currencies but lost against the rest. Data from the US came in mostly in line with expectations, as Chicago PMI climbed from 59.1 to 59.6 while the revised UoM consumer sentiment figure stood at 81.2. The quarterly employment cost index came in stronger than expected at 0.5% while personal spending showed a better than expected 0.4% uptick. The major report due today is the ISM manufacturing PMI, which is expected to dip from 57.0 to 56.2.

EUR

The euro lost further ground to the dollar on Friday, as risk aversion stayed in the markets. Euro zone data was mixed, with Germany showing a weaker than expected retail sales figure and France printing a better than expected consumer spending report. The CPI flash estimate fell short of consensus and posted a 0.7% uptick while the jobless rate improved to 12.0%. Spanish and Italian manufacturing PMIs are due today and these might not have such a material impact on euro price action.

GBP

The pound caved to the dollar on Friday since there were no major reports from the United Kingdom to give it support. Today, the UK is set to print its manufacturing PMI figure, which could dip from 57.3 to 57.1. A stronger than expected reading might be enough to give the pound a boost against its counterparts though.

CHF

The franc gave up its recent gains to the dollar on Friday, as USD/CHF bounced up from the .9000 major psychological level. There were no major reports released from Switzerland then, leaving the franc at the mercy of risk sentiment. Today, the SVME PMI is up for release and it might show a climb from 53.9 to 55.1, which could allow the Swissy to regain ground.

JPY

The yen continued to take advantage of the risk-off market environment, as it packed gains against the euro and the Australian dollar. Data from Japan was mixed on Friday and there are no reports lined up for today. If you’re trading the yen pairs, better take a look at the performance of Asian equities and the Nikkei to gauge market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls surprisingly managed to hold their ground against the dollar on Friday, as the Aussie and Loonie rebounded. Australian data was actually weaker than expected so the bounce could be chalked up to profit-taking ahead of the Chinese New Year festivities. Meanwhile, Canada printed a 0.2% monthly gain in GDP, which allowed the Loonie to stay afloat. Earlier today, Australia reported a weaker than expected building approvals figure and a 0.3% decline in job advertisements. Medium-tier inflation reports are set for release from Canada in the US session.

By Kate Curtis from Trader’s Way

191

USD

The US dollar gave up a lot of ground to its major currency counterparts in yesterday’s New York trading session, when the ISM manufacturing PMI came up short of expectations. The actual figure slipped from 57.0 to 51.3, worse than the expected decline to 56.2. Only the factory orders report is set for release from the US economy today and this might not have such a huge impact on dollar price action.

EUR

The euro had a chance to rebound against the US dollar in yesterday’s trading, taking advantage of the weakness in US data. Data from the euro zone was mixed, as the Spanish manufacturing PMI printed a stronger expansion while the Italian manufacturing PMI missed the mark. Only the Spanish unemployment change report is up for release from the euro zone today and it might show a 21.3K drop in joblessness.

GBP

The pound was a big loser in yesterday’s trading when the UK manufacturing PMI fell short of expectations. The actual figure fell from 57.2 to 56.7 instead of just dipping to the consensus at 57.1. It’s the construction sector’s turn to print the PMI today and another miss might pave the way for a deeper pound selloff.

CHF

The franc made a decent recovery to the dollar in yesterday’s trading as the SVME PMI came in stronger than expected while the previous month’s reading was revised higher. The actual figure climbed from an upgraded 55.0 reading to 56.1, surpassing the consensus at 55.1. There are no reports lined up from Switzerland today so market sentiment might drive price action.

JPY

The yen managed to hold on to some of its recent gains and go for more as risk aversion stayed in the markets and traders lost appetite for the US dollar. The Nikkei closed with nearly a 2% loss for the day, pushing yen pairs lower. There were no major reports released from Japan recently and none are due today, which suggests that risk sentiment could keep directing yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tried to hold on to their recent wins to the dollar and make the most of the weak data from the US. AUD/USD rebounded up to the .8800 area prior to today’s RBA interest rate decision but sold off a few hours leading up to the event. Low-tier inflation reports from Canada came in mixed, allowing USD/CAD to stay around its current levels. Also up ahead is the New Zealand quarterly jobs release, which might show a 0.6% gain in hiring and an improvement in the jobless rate from 6.2% to 6.0%.

By Kate Curtis from Trader’s Way

192

USD

The US dollar slid a bit lower to its major currency rivals in recent trading, as risk appetite somewhat improved. Data from the US was better than expected, with factory orders dropping by only 1.5% instead of the estimated 1.9% decline. No other reports have been released from the US yesterday while today has the ISM non-manufacturing PMI. Based on the manufacturing component of the report, another disappointment might be in the cards but analysts are still hopeful that it will improve from 53.0 to 53.6.

EUR

The euro edged slightly higher to the dollar in yesterday’s trading sessions, supported by an improvement in sentiment. Data from the euro zone was actually weaker than expected, as Spain reported a higher than expected rise in joblessness. Unemployment rose by 113.1K in euro zone’s third largest economy while medium-tier inflation reports also missed expectations. Services PMI from Spain and Italy are up for release today, along with the region-wide figures. Both economies could post improvements, which might help keep the euro afloat.

GBP

The pound took a break from its recent selloff to its major currency counterparts, as the UK construction PMI printed better than expected results. The actual figure climbed from 62.1 to 64.6, outpacing the consensus at 61.6. The services sector will release its PMI today and possibly show a rise from 58.8 to 59.1, but a weaker than expected reading might result to another pound selloff.

CHF

The Swiss franc consolidated to the dollar in recent trading, thanks to the lack of major reports from Switzerland. There are still no major reports lined up for today so the USD/CHF pair might keep reacting to risk sentiment.

JPY

The yen took advantage of the drop in the Nikkei and the selloff in the Asian session to rally against its currency counterparts. There were no reports released from Japan recently, and only the average cash earnings report was released today. It showed a 0.8% uptick, better than the estimated 0.7% increase while the previous month’s figure was revised up to 0.6%. This might result to a recovery in risk sentiment for today, which might be negative for the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a nice rebound to the dollar in recent trading, as the Australian dollar benefitted from the relatively upbeat RBA rate statement while the New Zealand dollar drew support from a stronger than expected rise in employment. Quarterly hiring increased by 1.1% while the jobless rate dropped from 6.2% to 6.0%, pushing NZD/USD back above the .8200 mark. There were no reports released from Canada recently and none are due today.

By Kate Curtis from Trader’s Way

193

USD

The US dollar edged lower than most of its major counterparts in recent trading, as data from the US economy came in mostly weaker than expected. The ADP non-farm employment change figure showed a 175K increase, lower than the projected 191K figure, while the previous month’s figure suffered a downward revision. The good news though was that the ISM non-manufacturing PMI came in better than expected, as it climbed from 53.0 to 54.0. For today, the trade balance, initial jobless claims, and preliminary non-farm productivity and labor costs are up for release.

EUR

The euro chalked up small gains to the Greenback when euro zone data showed improvements. Spain’s services PMI ticked up from 54.2 to 54.9, but missed the consensus at 55.3. Italy’s services PMI improved from 47.9 to 49.4, indicating a slower pace of contraction. However, euro zone retail sales printed weaker than expected results, as the figure declined by 1.6%. Today’s big event for the euro is the ECB interest rate decision, which might spark volatility for euro pairs.

GBP

The pound struggled to hold on to its recent gains when the UK printed a weaker than expected services PMI. The figure fell from 58.8 to 58.3, indicating a slower pace of expansion in the industry. The BOE is set to make its interest rate decision today and no monetary policy changes are expected. However, any change in the rhetoric of the central bank might have a material impact on the pound’s movement.

CHF

The franc consolidated to the dollar in recent trading since there were no major reports released from Switzerland. The Swiss SECO consumer climate report is up for release today and an improvement from -5 to 0 is eyed. Swiss trade balance is also due today and a wider surplus is expected, which might be enough to give the franc a boost against its counterparts.

JPY

The yen gave up a bit of its gains as risk appetite improved in yesterday’s trading, contributing to a positive close for the Nikkei. There are no major reports lined up from Japan today so risk sentiment might be responsible for driving yen pairs around today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the recent bounce in risk appetite recently, with AUD/USD climbing above the .8900 handle. However, Canadian building permits printed weaker than expected results, as the figure showed a 4.1% decline instead of the estimated 2.3% increase. Earlier today, Australian retail sales printed a 0.5% uptick while NAB business confidence improved from 5 to 8. Later on, Canada will release its Ivey PMI and is expected to print a rise from 46.3 to 51.3 and show a return to expansion for the manufacturing industry.

By Kate Curtis from Trader’s Way

194

USD

The US dollar was stuck in consolidation against most of its major currency counterparts, although US data came in weaker than expected yesterday. Preliminary non-farm productivity was higher than expected for the previous quarter so unit labor costs for the same period were understandably lower, which means that laborers had a smaller take-home pay for the three months up to December. Today the non-farm payrolls report is up for release and might show a rebound from the bleak December figures. However, cold weather conditions still affected several US states in January, which could lead to another weak jobs report.

EUR

The euro had a brief rally after the ECB interest rate statement, as Draghi sounded less dovish than usual. He pointed out that interest rates will remain low for an extended period of time but remarked on the improving business conditions. Other policymakers also dismissed the possibility of deflation weighing on overall economic performance. German trade balance and French government balance are the only reports due from the euro zone today, as the NFP might play a bigger role in EUR/USD price action.

GBP

The pound moved sideways in yesterday’s trading, as there were no surprises in the BOE rate statement. The central bank decided to keep interest rates and asset purchases unchanged for the meantime, even though there have been considerable improvements in the UK economy. Manufacturing and industrial production reports are lined up for today, along with the trade balance release.

CHF

The franc formed a tighter consolidation pattern to the dollar yesterday when Swiss data came in mixed. The SECO consumer climate figure jumped from -5 to 2, surpassing the consensus at 0 and indicating improving consumer confidence. However, the trade balance missed the forecast and showed a smaller than expected surplus while the previous month’s figure was revised down. Swiss foreign currency reserves and retail sales data are up for release today and might show improvements, which could then support the franc.

JPY

The yen was beaten up by the improvement in risk sentiment in recent trading, as there were no reports from Japan for the currency to draw support from. Only the Japanese leading indicators figure is up for release today and it might show a small improvement from 111.1% to 111.9%, which could be positive for the Nikkei and risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance in recent trading, with the Aussie ending positive and the Kiwi ending in the red. The Loonie consolidated to the dollar despite the strong Ivey PMI figure since data from the US came in weak. The Ivey PMI climbed back above the expansionary level, which helped keep the Loonie afloat. Canadian jobs data is up for release today and a 19.7K rebound in hiring is eyed.

By Kate Curtis from Trader’s Way

195

USD

The US dollar closed Friday on a weak note because the US non-farm payrolls report printed weaker than expected results. The actual figure came in at 113K versus the estimate at 180K, following December’s dismal jobs data. However, the jobless rate ticked down from 6.7% to 6.6% in January, mostly because of a decline in the participation rate. Traders are starting to price in dovish remarks for Yellen’s first testimony in front of Congress this week. There are no major reports due from the US today so the post-NFP reaction of the dollar might carry on.

EUR

The euro had a nice rebound on Friday, thanks to better than expected medium-tier data from Germany and France. The shared currency also took advantage of dollar weakness after the bleak NFP release. The German trade balance showed a higher than expected surplus of 18.5 billion EUR versus the estimate at 17.3 billion EUR while the previous period’s figure was revised higher. The French trade balance also printed good results, with a smaller than expected trade deficit. French and Italian industrial production figures are up for release in today’s London session, along with the euro zone Sentix investor confidence report.

GBP

The pound was able to bounce off its previous lows on Friday, although UK reports came in mixed. Manufacturing production increased by 0.3%, weaker than the estimated 0.6% growth, while the previous month’s figure was revised down to show a 0.1% decline. However, the trade balance turned out better than expected with a smaller shortfall of 7.7 billion GBP instead of the estimated 9.3 billion GBP deficit. There are no reports lined up from the UK today so the pound might be in for a bit of consolidation.

CHF

The franc was able to benefit from dollar weakness last week, as USD/CHF edged back to the bottom of the rising channel on its short-term time frames. Data from Switzerland has actually been weaker than expected, with a mere 2.3% increase in retail sales versus the estimated 3.9% gain and an increase in foreign currency reserves. The Swiss jobless rate is up for release today and a 3.2% figure is eyed, same as the previous month’s reading.

JPY

The yen lost ground to its major counterparts on Friday as risk appetite improved in the earlier sessions. However, volatility for USD/JPY picked up when the US NFP figure was released, although the yen still ended the day with losses. Earlier today, Japan printed a weaker than expected current account balance of -0.20 trillion JPY versus the estimated 0.06 trillion JPY shortfall. No other reports are lined up from Japan today so risk sentiment might push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to rake in more gains to the dollar on Friday, with the Loonie and Kiwi both ending up successful. Jobs data from Canada was better than expected, as the economy added 29.4K jobs in January and pushed the jobless rate down from 7.2% to 7.1%. Canadian housing starts are up for release today and another strong figure might push USD/CAD to new lows. No reports are due from Australia and New Zealand today.

By Kate Curtis from Trader’s Way

196

USD

The US dollar continued to lose ground to most of its major counterparts, despite the lack of top-tier data released in the latest New York session. Traders are starting to price in dovish remarks from Fed head Yellen, as jobs data have posted consecutive misses. Take note that Yellen’s speech will be released early on the Fed’s website to price action could pick up even before her actual testimony in Congress.

EUR

The euro edged slightly higher in recent trading even though data from the euro zone came in weak. French industrial production fell by 0.3% instead of the estimated 0.1% dip while Italian industrial production declined by 0.9% instead of staying flat. However, Sentix investor confidence came in stronger than expected at 13.3, up from 11.9. There are no reports lined up from the euro zone today.

GBP

The pound struggled to hold on to the 1.6400 major psychological level against the dollar since there were no major reports released from the UK yesterday. There are still no reports lined up for today so pound movement might depend on risk sentiment and US events.

CHF

The franc took advantage of recent dollar weakness, allowing USD/CHF to break below the rising channel on its 4-hour chart. Swiss jobless rate held steady at 3.2% as expected, allowing the franc to hold on to its gains. There are no reports due from Switzerland today.

JPY

The yen gave up more ground to its counterparts when risk sentiment continued to improve. Japanese current account data came in below consensus while the money supply was as expected. There are no reports lined up from Japan today since traders are on holiday. Volatility among yen pairs might be a little higher because of the low liquidity in today’s Asian trading session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground to the dollar even though there weren’t much reports released yesterday. Earlier today, Australian reports came in mixed with a higher than expected quarterly HPI but a sharp drop in home loans. However, the NAB business confidence came in strong with an improvement from 6 to 8. Over in China, the PBOC announced its expectations of more volatile money market rates and higher borrowing costs, reviving concerns of a default in the nation. Up ahead, Canada’s government budget release is due.

By Kate Curtis from Trader’s Way

197

USD

The US dollar experienced some volatility during Janet Yellen’s testimony in front of Congress in the latest US trading session. However, her speech didn’t contain any surprises as she simply confirmed that the Fed would carry on with its taper plans originally set by former Fed head Bernanke. There are no major reports lined up from the US today so dollar behavior might hinge on risk sentiment. Still, keep an eye out for the release of crude oil inventories and the Federal budget balance in today’s New York session.

EUR

The euro gave up some of its recent gains to the dollar when Yellen emphasized that the US central bank would carry on with its taper plans. There were no reports to keep the euro supported then. Euro zone industrial production is up for release today and a 0.2% decline is expected to follow the previous month’s 1.8% jump. ECB President Draghi is also set to testify and might spur additional volatility among euro pairs.

GBP

The pound spiked up to the dollar in recent trading but lacked the momentum to push higher. The BRC retail sales monitor showed a 3.9% increase, better than the previous 0.4% uptick. The BOE inflation report is up for release today, along with BOE Governor Carney’s speech. No major announcements are expected so it will be interesting to see whether Carney retains his previous monetary policy bias or not.

CHF

The Swiss franc returned some of its recent returns to the US dollar, as there were nor reports from Switzerland to give the franc a boost in recent trading. Swiss CPI is up for release today and a 0.3% decline is expected to follow the previous month’s 0.2% dip, possibly reigniting fears of deflation in the country.

JPY
Yen pairs continued to climb up the charts in recent trading, as Japanese traders were on holiday yesterday. Asian equities ended higher when risk appetite improved but the Nikkei was unable to benefit from this since Japan’s stock market was closed then. Earlier today, Japan printed a couple of weak data points with a 15.7% decline in core machinery orders and a 0.4% dip in tertiary industry activity. No other reports are lined up from Japan today but the weak figures might spur a decline for the Nikkei and yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls held on to their recent wins in yesterday’s trading as risk sentiment improved. AUD/USD managed to stay above the .9000 major psychological level while NZD/USD stayed on track to its climb to .8400. However, the Westpac consumer sentiment report released earlier today printed a 3.0% decline. Chinese trade balance data, along with new loans and money supply, are still up for release and might have an impact on Aussie trading. There are no reports due from New Zealand and Canada.

By Kate Curtis from Trader’s Way

198

USD

The US dollar chalked up losses in recent trading, as risk appetite continued to improve. Data from the US was also weaker than expected, with headline retail sales printing a 0.4% decline and core retail sales showing a flat reading. This wasn’t so surprising since jobs data for the past couple of months have been much weaker than expected. Data on import prices, capacity utilization, industrial production and consumer sentiment are up for release today. Another round of weak US reports might push the dollar lower against its counterparts.

EUR

The euro pushed higher against the dollar and the yen in recent trading, as traders tried to brush aside talks of negative deposit rates by the ECB. There have been no major reports released from the euro zone recently, as the German CPI and ECB monthly bulletin barely made an impact on euro price action. French and German preliminary GDP are due today and strong figures might push the euro higher. A 0.2% GDP expansion is expected for France while Germany might show 0.3% growth.

GBP

The pound continued to take advantage of the hawkish BOE rhetoric and the weak reports from the US. There have been no reports released from the UK yesterday yet GBP/USD extended its rally past the 1.6600 handle. There are no reports lined up from the UK again today so it will be interesting to see whether the pound can keep up with its recent climb until the week comes to a close.

CHF

The franc took advantage of dollar weakness in yesterday’s trading as Swiss PPI also came in stronger than expected. The report showed no change in producer prices instead of the anticipated 0.1% dip, easing fears of deflation in the country. There are no reports due from Switzerland today so USD/CHF might be in for a bit of consolidation unless there are surprises from US data.

JPY

The yen rallied then reversed in yesterday’s trading, as the dip among most yen pairs was attributed to a quick correction. Risk appetite was still up in recent trading, much to the detriment of the lower-yielding Japanese currency. There have been no major reports released from Japan and none are due today.

Commodity Currencies (AUD, NZD, CAD)

After the bleak Australian jobs release and resulting Aussie selloff, the currency was able to make a quick recovery and bounce off the nearby inflection points. The Aussie was also able to draw support from China’s better than expected CPI reading released earlier today. Aside from the medium-tier Canadian manufacturing sales release, there are no reports lined up from the commodity currencies’ economies today.

By Kate Curtis fromTrader’s Way

199

USD

The US dollar lost ground to its major currency counterparts on Friday, as data came in mixed. Capacity utilization and industrial production both fell short of expectations while import prices posted a mere 0.1% uptick. The preliminary UoM consumer sentiment index for February held steady at 81.2. There are no reports lined up from the US today since banks are closed for President’s Day. With that, stay on your toes for potentially higher volatility in today’s New York session.

EUR

The euro took full advantage of dollar weakness on Friday but was unable to keep up its rally against the Japanese yen. GDP reports from the euro zone came in strong, with the French economy showing 0.3% growth and the German economy printing a 0.4% GDP figure. This was enough to propel the euro zone economy into 0.3% growth for the quarter and provide a bit of support to the euro against most of its counterparts. There are no reports due from the euro zone today with only the Eurogroup meetings scheduled.

GBP

The pound kept up with its strong rally against the dollar and the yen on Friday, despite the lack of top-tier UK data on that day. Over the weekend, BOE Governor Carney had a testimony in which he commended the recovery in the UK housing market. There are no reports lined up from the UK today so the pound might be able to extend its rally if risk appetite stays in the markets.

CHF

The franc was able to pocket more gains last Friday, thanks to broad dollar weakness and the improvements in the euro zone economies. There were no reports released from Switzerland then and none are due today, which suggests that the franc might keep moving to the tune of risk sentiment.

JPY

The yen gained ground on the heels of weaker than expected Japanese GDP, as the economy posted 0.3% growth instead of the estimated 0.7% GDP figure. The revised industrial production report is up for release today but this might not be enough to keep the Nikkei and the yen pairs from sliding.

Commodity Currencies (AUD, NZD, CAD)

The comdolls also gained ground on dollar weakness last week, despite the weaker than expected manufacturing sales report from Canada. China had a better than expected CPI, which was enough to keep the Australian dollar supported, but New Zealand printed a weak quarterly retail sales report. However, the Kiwi still managed to start this week on a strong note, as NZD/USD stayed on track towards the .8400 handle. There are no other major reports lined up from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way

200

USD

The US dollar consolidated against most of its major counterparts in yesterday’s New York trading session, as most traders were on a holiday because of President’s Day. There were no reports released from the US economy then. Only medium-tier data such as the Empire State manufacturing index, TIC long-term purchases, and NAHB housing market index are up for release today. Weaker than expected reports could trigger a sharp selloff for the US dollar, as it would confirm that the extreme weather conditions are starting to take their toll on overall economic performance.

EUR

The euro took a break from its recent strong rallies, as there were no major reports released yesterday. News of Merkel voting against an additional set of funds for Greece as proposed by German Finance Minister Schaeuble also weighed on the euro. German ZEW economic sentiment data is up for release today and the index is projected to dip from 61.7 to 61.3, which might lead to a weaker euro.

GBP

The pound continued its strong rally in the start of yesterday’s trading but made a quick pullback during the US session. There were no major reports released from the UK economy then but today could be a different story as CPI figures are due. Recall that BOE Governor Carney recently upgraded the inflation forecasts yet analysts are expecting to see the annual CPI hold steady at the 2.0% mark. Stronger than expected results might be positive for the pound, as it would convince policymakers to tighten earlier than expected.

CHF

The franc paused from its recent climb against the dollar, as there were no reports released from the Swiss economy yesterday. There are still no reports due today so USD/CHF price action might hinge on market sentiment or US economic reports. Another round of weak data from the US could push USD/CHF even lower for the day.

JPY

Yen pairs ended the day on a weak note, as risk aversion spurred by weak Japanese GDP provided support for the lower-yielding yen. The BOJ is set to make its monetary policy statement today and it will be interesting to see what they have to say about the recent weakness in the economy and what they plan to do to offset the effect of the upcoming tax hike. Dovish remarks could push yen pairs back up the charts, as it could convince some traders that the BOJ is still ready to ease when needed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls bounced back to action in recent trading despite the lack of top-tier data. Earlier today, the RBA released the minutes of its latest monetary policy meeting and showed that the central bank isn’t looking to cut rates soon, leading to a strong AUD rally. However, the gains fizzled as the minutes also revealed the policymakers’ preference for a weak Australian dollar. Only the foreign securities purchases data is up for release from Canada today and this might not have such a huge impact on Loonie action.

By Kate Curtis from Trader’s Way

201

USD

The US dollar had a mixed performance in the recent trading sessions, as it weakened against the euro and franc but gained ground against the pound, Kiwi, and Aussie. US data all came in weaker than expected, as the Empire State index showed a sharper than expected decline from 12.5 to 4.5 instead of just falling to 9.9. The TIC long-term purchases report showed a surprise negative reading as China reportedly trimmed its US Treasury debt holdings. Meanwhile, the NAHB housing market index slipped from 56 to 46 instead of holding steady as analysts predicted. US building permits and PPI are up for release today but the star of the show could be the FOMC meeting minutes, which could shed light on how many policymakers agree that the Fed should continue tapering.

EUR

The euro continued its rally against the dollar and the yen in yesterday’s trading sessions, despite weaker than expected data from the euro zone. The German ZEW economic sentiment figure fell from 61.7 to 55.7 instead of just dipping to the estimated 61.3 reading while the region’s ZEW reading fell from 73.3 to 68.5. There are no reports set for released from the euro zone today so much of the euro’s price action could depend on overall market sentiment.

GBP

The pound retreated to its counterparts yesterday when the UK CPI came in weaker than expected. The consensus was a 2.0% reading, same as in the previous month, but the actual figure ticked down to 1.9%. This throws shade on Carney’s recent inflation upgrade, forcing some to rethink the BOE’s hawkish stance. BOE meeting minutes are up for release today and another round of upbeat remarks might push the pound back up.

CHF

The franc carried on with its rally against the dollar although the gains were made at a slower pace. There were no reports released from Switzerland yesterday while today has the ZEW economic expectations report on tap. An improvement from the previous 36.4 reading might be enough to push USD/CHF lower while a decline could trigger a bounce.

JPY

The yen slipped against its counterparts in yesterday’s Asian trading session when the BOJ expressed its bias to ease further. However, the gains were quickly erased as yen pairs tested significant resistance levels. No major reports are lined up for today but BOJ Governor Kuroda is set to testify in front of Parliament, which suggests that more easing remarks could be in the cards.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi lost ground to the dollar in recent trading while the Loonie fought to hold on to its recent gains despite weaker than expected Canadian foreign securities purchases. The report showed a 4.28 billion CAD deficit instead of the expected 9.97 billion CAD surplus. Earlier today, Australia reported a 0.8% uptick in its CB leading index and a 0.2% decline for its MI version. Wage price index showed a quarterly 0.7% increase, stronger than the previous 0.5% rise. Canadian wholesale sales data is due today and a 0.5% drop is eyed.

By Kate Curtis from Trader’s Way