Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
202

USD

The US dollar made a quick rebound against most of its major currency rivals in recent trading, as the FOMC minutes showed the Fed’s commitment to carry on with their taper plans. Data from the US has actually been mostly weak, with building permits showing a 0.94 million figure instead of the estimated 0.98 million reading. Headline and core PPI both came in line with consensus, showing 0.2% upticks, while housing starts also disappointed. Up ahead, the US CPI figures are due along with the initial jobless claims and Philly Fed index. Another round of disappointing data could force the Greenback to return some of its recent gains.

EUR

The euro struggled to keep up its rallies in yesterday’s trading sessions when the euro zone didn’t release any economic reports. For today, German and French manufacturing and services PMIs are up for release and this might be crucial in determining whether the euro can hold on to its recent gains or start a selloff. Most of the PMIs are expected to show improvements, enough to boost the region’s manufacturing and services PMIs.

GBP

The pound let go of its recent wins when the jobs data came in mixed. The economy added 27.6K jobs in January but the jobless rate ticked up from 7.1% to 7.2%, a couple of notches away from the BOE’s jobless rate target. The BOE meeting minutes showed a unanimous vote to keep monetary policy unchanged and triggered a quick bounce for pound pairs when Carney’s hawkish comments were echoed by most policymakers. Only the CBI industrial order expectations are due from the UK economy today and this might not have much of an impact on the pound.

CHF

The franc paused from its recent rallies as Switzerland’s ZEW economic expectations report showed a decline from 36.4 to 28.7. Only the trade balance is up for release today and a wider trade surplus is projected, which might be enough to support the franc against the euro and the dollar. Otherwise, a sharper selloff might be in the cards as this would force the SNB to jawbone the franc later on.

JPY

The yen had a mixed performance in recent trading as there were no major reports released from Japan, leaving the currency vulnerable to market sentiment. There are still no major reports lined up for today, which suggests that the yen’s movement could still depend on the market’s risk preferences.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered a fresh wave of losses in recent trading as most data came in weak. Canada’s foreign securities purchases showed a surprise deficit while New Zealand’s quarterly PPI figures posted declines instead of the estimated upticks. Earlier today, China released a weak HSBC flash PMI reading and showed a deeper contraction in the industry, pushing AUD pairs lower. No other reports are due from the comdolls today so much could depend on risk sentiment.

By Kate Curtis from Trader’s Way

203

USD

The US dollar had a mixed performance to its major currency counterparts recently as data was light in the US session. In fact, there were no major economic releases from the US. For today, JOLTS job openings data and the NFIB small business index are the only reports on the US calendar and these aren’t likely to cause huge waves among dollar pairs. Analysts speculate that the US dollar could stay supported in the near term though, as the recently released NFP figure pointed to a recovery in the jobs market.

EUR

The euro retreated to the dollar in recent trading, as data from the euro zone came in mostly weaker than expected. French industrial production showed a 0.2% decline instead of the estimated 0.6% uptick while the previous figure was downgraded. Italian industrial production was stronger than expected with a 1.0% increase versus the estimated 0.4% growth while the previous figure was upgraded. However, euro zone Sentix investor confidence fell short of expectations when it climbed from 13.3 to 13.9, weaker than the estimated 14.3 figure. German trade balance is the only report due from the euro zone today.

GBP

The pound gave up ground to the dollar in recent trading sessions, as the UK BRC retail sales monitor chalked up a 1.0% decline. This pushed GBP/USD down to the 1.6650 minor psychological level in Asian trading, although the pair is nearing a support zone. UK inflation report hearings and manufacturing production are lined up for today and this should determine whether pound pairs will retreat further or bounce higher. Manufacturing production is likely to show another 0.3% uptick but a stronger than expected reading might give pound pairs a strong boost.

CHF

The franc paused from its recent rallies to the dollar when Swiss retail sales printed weaker than expected results. It showed a mere 0.3% increase when analysts were expecting to see 2.7% growth, although the previous figure was upgraded to 2.5%. There are no reports due from Switzerland today so the franc might have a chance at resuming its drop if traders don’t favor the US dollar in today’st rading sessions.

JPY

Yen pairs stayed stuck in consolidation in the past few hours as traders await the BOJ interest rate decision. No actual policy changes are anticipated, as central bankers are still waiting to assess the impact of the upcoming sales tax increase on overall economic performance. Japanese exports have been lagging though and this issue might come up in today’s BOJ press conference.

Commodity Currencies (AUD, NZD, CAD)

The comdolls did enjoy a bit of support in recent trading, even though risk appetite seems to have weakened. The New Zealand dollar got a boost from PM John Key when he spoke of the need to bring interest rates back to normal levels. This set the stage for this week’s RBNZ interest rate decision, confirming that the central bank is likely to hike. As for Canada, housing starts were stronger than expected at 192K, enough to give the Loonie a chance to rally yesterday. In Australia, NAB business confidence showed a small decline.

By Kate Curtis from Trader’s Way

204

USD

The US dollar had another mixed performance in recent trading, as major pairs were mostly driven by country-specific events and couldn’t establish a clear direction because of the lack of US reports and major catalysts. Risk sentiment is shifty, with the tension in Ukraine still present and with investigators unable to identify what caused the Malaysian Airline plane’s disappearance. Data on US crude oil inventories is due today along with the US 10-year bond auction, both of which aren’t expected to cause a huge impact on dollar behavior.

EUR

The euro gave up some of its recent gains to the dollar in yesterday’s trading sessions, as data from Germany came in weak. The trade balance fell short of expectations, with the surplus at 17.2 billion EUR instead of the estimated 19.3 billion EUR. This is also lower compared to the previous month’s 18.3 billion EUR surplus. French final non-farm payrolls and euro zone industrial production data are up for release today but these aren’t likely to spur the euro in a particular direction, unless actual results come in way above or below expectations.

GBP

The pound lost a lot of ground in recent trading because of downbeat comments from BOE officials. Carney emphasized that the UK central bank isn’t looking to hike rates anytime soon since there is a lot of spare capacity in the economy and both inflation and employment have room to improve. This was followed by remarks from MPC member Bean who said that further appreciation for the pound could hurt the country’s exports and overall economic performance. No reports are due from the UK today so this change in rate hike expectations might keep hurting the pound.

CHF

The franc consolidated to the dollar in yesterday’s trading sessions, as both Switzerland and the US had no reports released. These two economies have virtually no major reports lined up for today so more sideways movement for USD/CHF might be in the cards.

JPY

The yen posted gains against most of its major counterparts, including the US dollar, when the BOJ refrained from easing monetary policy. The central bank also made no changes to its growth and inflation forecasts, despite the potential weakness from the upcoming sales tax increase. The BOJ also highlighted the recent weakness in exports but explained that this might just be due to temporary factors. No major reports are due from Japan in the next few hours.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to their lower-yielding counterparts yesterday when risk appetite waned. Data from Australia reflected weakness, with the NAB business confidence figure falling from 9 to 7 and the Westpac consumer sentiment report showing a 0.7% decline. Earlier today, the Australian home loans report showed a flat reading and a downward revision in the previous month’s figure. The RBNZ is set to make its interest rate decision in the next Asian trading session and rate hike expectations could keep NZD/USD afloat. However, a disappointment in the monetary policy statement could lead to a massive selloff.

By Kate Curtis from Trader’s Way

205

USD

The US dollar extended its gains to most of its major counterparts when data from the US economy came in stronger than expected. The initial jobless claims report showed a 320K reading instead of the projected 327K figure while the Philly Fed index jumped from -6.3 to 9.0. On the other hand, existing home sales fell short of expectations and declined from 4.62M to 4.60M. There are no major reports lined up from the US today but there are a bunch of testimonies by FOMC officials. This could set the tone for dollar trading as it would confirm whether or not other policymakers agree with Yellen’s statements on future monetary policy plans.

EUR

The euro lost further ground in yesterday’s trading sessions, with EUR/USD breaking below the 1.3800 mark to the dollar. Only the German PPI was released from the euro zone and this printed a flat reading instead of the estimated 0.2% uptick. Euro zone current account and consumer confidence are up for release today and this might determine whether the euro will lose further ground or recover before the end of the week.

GBP

The pound was unable to hold on against the dollar in recent trading, as risk aversion took over the markets. The CBI industrial order expectations actually came in stronger than expected as it improved from 3 to 6 yet GBP/USD sold off because of strong US data. UK public sector net borrowing data is up for release today and it might show a 7.8 billion GBP reading.

CHF

The franc still continued to give way to the dollar in yesterday’s sessions when the SNB reiterated its pledge to defend the franc peg. There are no reports lined up from Switzerland today so EUR/CHF and USD/CHF movement might depend on euro zone and US events.

JPY

The yen made a bit of recovery to its counterparts as risk rallies were kept at bay. The worsening conflict in Ukraine and the economic sanctions being imposed turned out to be favorable for the safe-haven yen. There were no major reports released from Japan yesterday and none are due today, as Japanese banks are on holiday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to dollar strength recently, as the run in risk aversion dampened demand for these higher-yielding currencies. The looming risk of corporate default in China weighed on the Australian dollar, although the country reported a 0.2% uptick in its CB leading index earlier today. New Zealand reported a 2.2% increase in visitor arrivals for February, helping NZD/USD stay above the short-term rising trend line. The event risk for the Loonie today is the Canadian retail sales release, which might show a 0.8% increase for the headline figure and a 0.9% gain for the core figure. Canadian CPI is also up for release today.

By Kate Curtis from Trader’s Way

206

USD

The US dollar let go of some of its recent gains on Friday as most traders booked profits off key levels. Data from the US was relatively light for the day, with a few FOMC officials supporting the positive outlook for the economy. Only the flash manufacturing PMI is up for release from the US today and this isn’t expected to make a huge impact on dollar movement. Do keep close tabs on the economic sanctions being imposed by the US on Russia as these could impact overall risk sentiment.

EUR

The euro recovered a bit against the dollar on Friday, thanks to a better than expected current account balance from the euro zone. The surplus widened from 20.0 billion EUR to 25.3 billion EUR. Germany and France are set to print their manufacturing and services PMIs today and these could determine whether the euro selloff would resume or not. Most of the figures are expected to show small improvements, although the readings could still reflect contraction in the industries.

GBP

The pound was unable to bounce back on Friday, as the public sector net borrowing report showed that the government incurred a 7.5 billion GBP deficit. There are no major reports lined up from the UK today so pound pairs might be in for a bit of consolidation, as traders wait for the UK CPI to be released later on this week.

CHF

The franc rebounded on Friday, taking advantage of profit taking by most market participants. There were no reports released from Switzerland then and none are due today, which might mean a bit of sideways movement for both USD/CHF. As for EUR/CHF, the price action might hinge on the euro zone PMI releases.

JPY

The yen bounced back to action on Friday, as risk sentiment favored the lower-yielding Asian currency. However, Japanese traders were on holiday then and there were very little cues from Asian equities. Japan’s banks resume operation today and it will be interesting to see how the recent sanctions imposed by the US on Russia will be priced in the Nikkei and yen pairs. No economic reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a bit of bounce on Friday, most notably the Loonie. The Canadian currency drew a lot of support from stronger than expected economic data, as retail sales and CPI all came in higher than estimates. Core CPI showed a 0.7% increase while the headline figure printed a 0.8% uptick. Core retail sales had a 1.0% rise while headline retail sales made a 1.3% jump. There are no reports due from Canada today but in the Asian session, China’s HSBC flash manufacturing PMI printed a weaker than expected 48.1 reading which weighed on the Aussie.

By Kate Curtis from Trader’s Way

207

USD

The US dollar gave up some ground to its major counterparts in recent trading, pushing EUR/USD back above the 1.3800 mark. Data from the US was weaker than expected, as the flash manufacturing PMI slipped from 57.1 to 55.5 instead of just falling to 56.6. US CB consumer confidence and new home sales data are up for release today, with consumer confidence expected to improve from 78.1 to 78.7 and new home sales likely to fall to 447K from 468K. Also scheduled for today are some testimonies by Fed officials who will probably give their assessment on the US economy and indicate whether they support Yellen’s stance or not.

EUR

The euro bounced against the dollar in recent trading, despite mixed PMI figures from the euro zone. France reported strong results for its manufacturing and services sectors but Germany’s figures fell short, although the region’s figures came in close to consensus. German Ifo business climate is up for release today and it might show a dip from 111.3 to 110.9. Worse than expected data could push EUR/USD back below the 1.3800 mark while strong results could lead the uptrend to resume.

GBP

The pound was unable to take advantage of dollar weakness in recent trading, leaving GBP/USD to consolidate around the 1.6500 handle. There have been no reports released from the UK on Monday but traders are sitting tight ahead of today’s CPI release, which is forecasted to weaken to 1.7%. If so, that would lower the odds of tightening by the BOE, as the central bank would be keen to keep inflation close to their 2% target.

CHF

The franc took advantage of the dollar’s selloff in recent trading, despite the lack of data from Switzerland. There are still no reports lined up from Switzerland today so franc movement could hinge mostly on market sentiment.

JPY

The yen consolidated against most of its currency counterparts, as there were no major reports released from Japan. The Nikkei managed to clock in a solid 1.8% gain at the start of the week, as Japanese traders returned to their trading desks. There were no reports released from Japan then and none are due today, leaving the yen pairs at the mercy of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to gain from the dollar’s slide yesterday, with NZD/USD holding above the rising trend line on the 1-hour time frame and AUD/USD breaking above .9100. Chinese data was weaker than expected, as the HSBC flash manufacturing PMI sank further, but this caused speculation that the PBOC or Chinese government might start adding stimulus. There are no other reports lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

208

USD

The US dollar had a mixed performance to its counterparts, as it failed to draw strong support from economic data. The CB consumer confidence report churned out stronger than expected results, with the index climbing from 78.3 to 82.3 and surpassing the consensus at 78.7. However, new home sales turned out to be a disappointment at 440K while the previous figure was revised lower. The Richmond manufacturing index also showed a weak reading of -7 instead of the projected -1 figure. Durable goods orders data is up for release today, with the headline figure expected to print a 1.1% increase and the core report to show a 0.3% uptick.

EUR

The euro had a volatile day as it was tossed around by comments on negative deposit rates. Germany’s Bundesbank head Weidmann, who is also an ECB member, hinted that this policy option could be implemented since the ECB is running out of tools to combat the euro’s appreciation. Apparently, gains in the shared currency are starting to hurt Germany’s economic performance. Other ECB officials suggested that further QE could be implemented to boost inflation. Germany’s Ifo business climate figure came in line with expectations and today it will be the turn of the GfK consumer climate figure to show how the consumer sector is faring.

GBP

The pound found a bit of support as the UK CPI came in line with expectations at 1.7% while other inflation indicators showed stronger than expected results. BBA mortgage approvals came in weaker than expected though at 47.6K while the previous month’s reading was downgraded. No reports are due from the UK today so the pound’s rallies could carry on if risk appetite stays strong.

CHF

The franc had a choppy trading day despite the lack of major reports from Switzerland. The SNB quarterly bulletin and UBS consumption indicator are up for release today and this might push franc pairs in a clearer direction.

JPY

The yen lost ground to the pound, Aussie, and Loonie but managed to consolidate against the euro in yesterday’s trading. There were no reports released from Japan, as the yen’s movement hinged on currency-specific events. There are still no reports lined up from Japan today so the lower-yielding currency’s action could be sensitive to risk once more.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to edge higher against the dollar in recent trading, although their rallies were slower this time around. AUD/USD climbed safely above the .9150 handle while USD/CAD retreated to 1.1150. New Zealand is set to print its trade balance later on and possibly show a larger surplus of 595 million NZD compared to the previous 306 million NZD, which might give the Kiwi a boost. No reports are due from Australia and Canada today.

By Kate Curtis from Trader’s Way

209

USD

The US dollar was unable to benefit from stronger than expected US economic data, as the lower-yielding currency still lost ground despite the 2.2% jump in headline durable goods orders. The core version of the report printed a 0.2% uptick, close to the estimated 0.3% increase, but the previous month’s readings were revised lower. The flash services PMI printed stronger than expected results, with an upward revision in the previous reading. What weighed on the Greenback was the Fed bank stress test results, which showed that Citigroup and four other U.S. banks failed. Another factor that weighed on the dollar was the bond auction that showed a rapidly flattening yield curve. US initial jobless claims and pending home sales are up for release today, both of which are not expected to have a strong impact on the dollar unless they come in significantly above or below expectations.

EUR

The euro didn’t get to take advantage of dollar weakness in recent trading, as the region showed signs of economic weakness as well. Talks of negative deposit rates are starting to weigh on the shared currency again, as policymakers try to figure out what other tools they can use to battle deflation and prevent the euro from climbing higher. German GfK consumer climate came in line with expectations at 8.5. Euro zone money supply and private loans data are due today but these aren’t expected to make a huge effect on euro action.

GBP

The pound made a strong bounce in recent trading, despite the lack of data from the UK. Traders are pricing in strong UK retail sales in light of the rebound in hiring. After showing a 1.5% decline in the previous month, a 0.5% increase is expected for February.

CHF

The franc tried to take advantage of dollar weakness but its gains were limited, thanks to the SNB’s recent pledge to keep the franc weak. The UBS consumption indicator climbed to 1.57 from an upwardly revised 1.49 reading, lending a bit more support for the franc. There are no reports due from Switzerland today.

JPY

The yen gained ground to most of its major counterparts, as traders flocked to the safe-haven currency against the US dollar. The Nikkei has been on a decline, which also means that risk sentiment is in support of the yen. Traders are starting to price in the impact of the corporate tax hike due next month. Japanese household spending and inflation data are up for release in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls cashed in gains in the midst of dollar weakness, with AUD/USD climbing to the .9200 major psychological level and NZD/USD breaking above consolidation. Perhaps the most surprising move among the comdolls was USD/CAD’s dip below the 1.1100 major psychological level despite recent BOC remarks on a possible rate cut. New Zealand printed a stronger than expected trade surplus of 818 million NZD although the previous month’s surplus was revised lower.

By Kate Curtis from Trader’s Way

210

USD

The US dollar continued to bleed to the pound and the commodity currencies, as data from the US failed to give the currency any support. Data came in mixed, with pending home sales printing a weaker than expected figure. The report showed a 0.8% decline instead of the estimated 0.1% uptick while the previous month’s figure was revised to show a 0.2% decline. Initial jobless claims came in strong at 311K versus the estimated 326K figure, but the GDP reading was revised down from 2.6% to 2.4%. US consumer data, namely the revised UoM consumer sentiment figure and personal spending figures, are on tap for today.

EUR

The euro suffered another round of losses to its major counterparts, particularly the dollar and the pound, as data from the euro zone came in weak. Private loans tumbled by 2.2% versus the estimated 2.1% dip while the previous figure was revised lower. Data on German import prices and French consumer spending are up for release today and more signs of weakness could lead to more declines for the euro.

GBP

The pound made a strong bounce to the dollar and the euro yesterday when UK retail sales printed stronger than expected results. The report marked a 1.7% jump versus the estimated 0.5% uptick, although the previous figure was revised down from -1.5% to -2.0%. For today, UK current account and final GDP are on tap. Strong figures could allow the pound to extend its rally.

CHF

The franc kept consolidating to the dollar, thanks to the lack of major reports from Switzerland. The Swiss currency failed to take advantage of dollar weakness as recent comments from SNB officials showed that the central bank is still keen on pursuing franc weakness. There are no reports due from Switzerland today.

JPY

The yen had a topsy-turvy day as it gained on risk aversion then lost ground when Japanese data came in strong. Tokyo core CPI and national core CPI both printed healthy gains while household spending marked a 2.5% decline. Traders are uneasy about buying the yen ahead of the April sales tax increase while the improvement in risk appetite is keeping yen pairs strong.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to gain ground against its lower-yielding counterparts, with the Kiwi boosted by more rate hike expectations and the Aussie lifted by risk sentiment. Even the Loonie was able to take advantage of the gains, as USD/CAD dipped below the 1.1000 mark. There are no reports due from the comdoll economies today so be mindful of potential profit taking ahead of the weekend and end of the month.

By Kate Curtis from Trader’s Way

211

USD

The US dollar took a breather from its latest declines, as traders booked profits off key levels last week. Data from the US economy came in mostly in line with expectations, as personal spending and income rose by 0.3% while the University of Michigan consumer sentiment figure was revised to 80.0. Yellen is set to give a speech in today’s New York trading session and spark additional volatility for dollar pairs. If she emphasizes her rate hike timeline of six months after the end of asset purchases, the dollar could draw more support.

EUR

The euro showed signs of weakness on Friday but was able to make a quick bounce to the dollar and the yen before the trading week closed. Reports from the euro zone were actually weaker than expected, with German CPI coming in at 0.3% instead of the estimated 0.4% figure and French consumer spending posting a mere 0.1% uptick instead of the projected 1.0% gain. German retail sales and euro zone CPI flash estimate are on tap for today and another round of weak reports could lead to more losses for the euro.

GBP

The pound retreated slightly on Friday, as data from the UK came in below consensus. The current account balance showed a larger than expected deficit of 22.4 billion GBP while the previous reading was downgraded to show a 22.8 billion GBP shortfall. Meanwhile the final GDP reading saw no revisions from its previous 0.7% figure. UK net lending to individuals data is due today, along with a speech from BOE Governor Carney.

CHF

The franc consolidated to the dollar on Friday, thanks to the lack of data from Switzerland. USD/CHF formed a doji on its daily time frame, indicating a possible reversal. Swiss KOF economic barometer is due this Monday and it might show a small improvement from 2.03 to 2.08, which could allow the franc to gain more ground against the dollar.

JPY

Traders dumped the Japanese yen early on as data from Japan over the weekend showed bleak results. Manufacturing PMI declined while the industrial production report showed a surprise 2.3% decline. On top of that, Japan will be implementing its sales tax hike this week and traders are anticipating further BOJ stimulus to offset the potential economic drag. Japanese housing starts data is also due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave back some of their recent gains on Friday as profit-taking took place in the forex market. New Zealand reported a 1.7% decline in building consents and a decline in ANZ business confidence while Australia showed a 4.6% increase in HIA new home sales. Canada is set to print its monthly GDP reading today and possibly show a 0.4% growth reading for January.

By Kate Curtis from Trader’s Way

212

USD

It was a mixed bag for the US dollar in Monday’s trading, as it gave up gains to some of its counterparts but locked in wins against others. USD/JPY carried on with its rally past the 103.00 handle while GBP/USD broke past the 1.6650 minor psychological resistance. Fed Chairperson Yellen’s speech caused volatility among dollar pairs as she spoke of the labor market needing support, which is a more dovish statement compared to her remarks during the latest FOMC decision. Up ahead, ISM manufacturing PMI is due and analysts expect to see an improvement from 53.2 to 54.2.

EUR

The euro made a small recovery to the dollar in recent trading even though the CPI reading for the euro zone came in weaker than expected at 0.5%. This prompted calls for further easing from the ECB in their upcoming rate decision, but ECB member Nowotny mentioned that the euro zone recession might be over and sparked a rally for the shared currency. Spanish and Italian manufacturing PMI, along with the German unemployment change data, is due today and should provide a bit more movement for euro pairs.

GBP

The pound extended its rally against the dollar in yesterday’s trading sessions when BOE Governor Carney spoke of higher rates for the UK economy. UK manufacturing PMI is up for release today and this might determine whether the pound can hold on to its recent gains or not. The figure is slated to dip from 56.9 to 56.7 for March, which might lead to a bit of a pullback for GBP/USD if the actual figure comes in as expected. A weaker than expected reading could trigger a quick selloff.

CHF

The franc regained ground to the dollar, with USD/CHF closing below the doji on its daily time frame and confirming a potential selloff. Data from Switzerland was actually weaker than expected as the KOF economic barometer showed a decline from 2.03 to 1.99 instead of improving to 2.08. Swiss SVME PMI is up for release today and a small improvement from 57.6 to 57.9 is projected, which might help USD/CHF extend its drop.

JPY

The yen lost ground to most of its major counterparts recently when Japan printed a weaker than expected Tankan index. The figure rose from 16 to 17, short of the estimate at 19, while the non-manufacturing component improved from 20 to 24 as expected. Average cash earnings stayed flat instead of dipping by the estimated 0.1%, allowing the yen to hold steady in the early Asian session. No other reports are due from Japan for the rest of the trading day.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and the Kiwi resumed their rallies to the dollar while the Loonie lagged behind, although Canadian GDP came in stronger than expected at a monthly growth of 0.5%. Earlier today, Chinese official manufacturing PMI improved from 50.2 to 50.3 instead of falling to the projected 50.1 reading. However, the HSBC final manufacturing PMI was revised lower to 48.0. The RBA is set to announce its interest rate decision today and possibly spark more volatility for AUD/USD. No reports are due from Canada and New Zealand.

By Kate Curtis from Trader’s Way

213

USD

The US dollar regained ground against its counterparts, as the ISM manufacturing PMI showed an improvement from 53.2 to 53.7. However, this was still short of the estimate at 54.2. Despite that, analysts took this as a sign that the upcoming NFP release could print promising results and reinforce Yellen’s view that the labor sector is recovering. The ADP non-farm employment change report due today should paint a clearer picture of the jobs market and the figure is slated to show a 192K reading, higher than the previous 139K. A stronger than expected report could reinforce dollar strength as traders position ahead of Friday’s NFP release.

EUR

The euro managed to hold steady to the dollar and post minimal losses as traders sit tight for the upcoming ECB rate decision tomorrow. German unemployment change came in better than expected and showed a 12K increase in hiring while Spanish and Italian manufacturing PMI came in line with expectations. Spanish unemployment change data is up for release today and a strong figure could keep the euro supported.

GBP

The pound gave up some of its recent gains to the dollar when the manufacturing PMI came in weaker than expected. The previous month’s reading was revised down to 56.2 while the latest release showed a decline to 55.3 instead of an improvement to 56.7. The construction PMI is up for release today and an improvement from 62.6 to 63.1 is eyed, but this might not have such a huge impact on pound movement since traders are more sensitive to the services PMI which is up for release tomorrow.

CHF

The franc was able to advance against the dollar in recent trading even though Switzerland’s SVME PMI slipped from 57.6 to 54.4, reflecting weaker expansion in the manufacturing industry. There are no reports due from Switzerland today so USD/CHF movement might depend on US data and risk sentiment.

JPY

The yen gave up a lot of ground to its major counterparts as traders priced in potential BOJ easing to compensate for the drag on the economy caused by the sales tax hike implemented this month. There are no reports due from Japan today so expect the yen to keep showing signs of weakness on the sales tax increase.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi sold off significantly in today’s Asian trading session when a reversal candlestick formed on the .8700 handle to the dollar and caused traders to book profits. The Aussie also saw some weakness as Australian building approvals showed a 5.0% slide. Meanwhile the Loonie was able to make small gains thanks to strong medium-tier inflation data. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way

214

USD

The US dollar had a pretty good run yesterday, as the ADP non-farm employment change figure came in line with expectations. The actual figure showed a 191K increase in payrolls, leading traders to price in a good NFP release for Friday. The previous month’s figure also enjoyed an upward revision, which spells good prospects for the US labor market. The factory orders reported printed a stronger than expected 1.6% increase versus the estimated 1.3% gain. US initial jobless claims and ISM non-manufacturing PMI are up for release today.

EUR

The euro lost ground to the dollar in recent trading, as the US economy printed strong data. The shared currency lost ground to its other counterparts as well, despite better than expected Spanish jobs data. This was because euro zone final GDP was revised down from 0.3% to 0.2%, indicating that growth in the region was weaker than initially reported. The ECB rate decision is scheduled today and this should show whether the central bank is ready to ease further or not.

GBP

The pound saw another round of weakness yesterday when the construction PMI came in weaker than expected. The figure dipped from 62.6 to 62.5 instead of improving to 63.1, but the selloff was not so bad since traders are still waiting for the services PMI to be released today. The figure is expected to hold steady at 58.2 but another weak reading might lead to a deeper pound selloff. Earlier today BOE Governor Carney was quoted saying that a rate hike might take place before the general elections, leading to pound strength.

CHF

The franc gave up most of its recent gains to its counterparts as there were no reports from Switzerland to give it support yesterday. There are still no reports due from Switzerland today which suggests that franc pairs could be more sensitive to currency-specific data.

JPY

The yen recovered a bit against most of its counterparts as some traders booked profits off key resistance levels. There have been no reports released from Japan yesterday and none are due today, suggesting that yen pairs might be sensitive to risk sentiment for the rest of the week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to the dollar in recent trading, as AUD and NZD extended their losses. Data from Australia was mixed today, as the retail sales release came in weak but the trade balance report showed a stronger than expected surplus. Canadian trade balance is due in today’s US trading session and the previous 0.2 billion CAD deficit is expected to turn into a 0.2 billion CAD surplus.

By Kate Curtis from Trader’s Way

215

USD

The US dollar managed to end the day higher than most of its major counterparts despite a round of weak economic data. The trade balance release showed a wider deficit, indicating weakness in trade, while the initial jobless claims showed a higher than expected reading. The ISM non-manufacturing PMI did show an improvement but it failed to meet the consensus. For today, the NFP release could set the tone for dollar movement for the longer run, as it would confirm whether the Fed was correct or not with its assessment of the US labor market. Analysts expect to see a reading of around 200K, which would be enough to bring the jobless rate down to 6.6%.

EUR

The euro was in for a lot of volatility yesterday, particularly when Draghi gave his press conference. The ECB decided to keep interest rates unchanged for the meantime as expected, but Draghi shared that he is concerned about economic stagnation. In his forward guidance, he disclosed that the ECB discussed further easing options like negative rates or large-scale bond purchases. German factory orders are due today and a mere 0.5% uptick is eyed, lower compared to the previous 1.2% gain. Another weaker than expected report from euro zone’s largest economy might push for a deeper euro decline.

GBP

The pound returned some of its recent gains yesterday when the services PMI fell short of expectations. The actual reading slipped from 58.2 to 57.6 reflecting a slower expansion in the industry and this led to a pound decline because services comprises a huge chunk of the UK economy’s activity. Only the Halifax HPI is due from the UK today and this might not move the pound around so much. A 0.7% increase in HPI is expected to follow the previous month’s 2.4% gain.

CHF

The franc gave up a lot of ground to the dollar and the rest of its forex counterparts in yesterday’s trading despite the lack of data from Switzerland. Perhaps the franc was following the euro’s moves and the shared currency was weighed down by dovish remarks from the ECB. There are no reports lined up from Switzerland today.

JPY

The yen was still on a weak footing against most of its currency rivals but its losses were subdued yesterday. There have been no major reports released from Japan and none are due today, but it appears that Asian traders are showing some support for the safe-haven currency as tension is sparking between South Korea and North Korea again.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a shaky trading day, as NZD and AUD tried to hold on to their recent levels. Canadian trade balance came in line with consensus, as the deficit of 0.3 billion CAD turned into a surplus. Canada is set to print its jobs data today and might show a 21.5K gain in hiring, enough to erase the 7K jobs lost in the previous month. However, this release might be overshadowed by the NFP event.

By Kate Curtis from Trader’s Way

216

USD

The US dollar retreated to most of its major counterparts on Friday when the non-farm payrolls report churned out weaker than expected results. Although the February figure was revised higher, the March reading came in below the consensus of a 200K increase. The jobless rate also held steady at 6.7% instead of improving to the estimated 6.6% figure. This confirms Yellen’s remark that the labor sector is still very weak and that it could continue to rely on Fed stimulus in the near term. There are no major reports lined up from the US economy today so traders might continue to trade on the post-NFP sentiment.

EUR

The euro showed more signs of weakness on Friday and it still ended weaker to the dollar in spite of bleak NFP figures. German factory orders came in line with consensus and showed a 0.6% uptick while euro zone retail PMI showed an improvement from 48.5 to 49.2. Perhaps traders are starting to price in more easing from the ECB, based on the latest remarks from the ECB rate statement. German industrial production and Sentix investor confidence are up for release today.

GBP

The pound gave up some gains to the dollar on Friday, despite the initial bounce of GBP/USD after the NFP release. UK Halifax HPI came in below expectations and showed a 1.1% decline instead of the estimated 0.7% uptick. There are no reports due from the UK today but traders might start pricing in upbeat remarks or more talks of rate hikes on the upcoming BOE rate decision later on this week.

CHF

The franc lost ground to all of its major counterparts on Friday as there were no reports to provide support for the Swiss currency. Data on foreign currency reserves is up for release from Switzerland today and this should show how much the SNB is spending to keep the franc’s value low. Also due today is Swiss CPI and a 0.2% uptick in price levels is expected.

JPY

The yen continued to weaken against most of its major counterparts, except for the much weaker euro, as traders anticipated dovish BOJ remarks or even further easing to make up for the slack caused by the sales tax hike this month. There were no reports released from Japan last Friday but the Japanese currency also managed to chalk up some gains to the dollar, thanks to the weak NFP. Japanese leading indicators is due today and this might not have such a large impact on price action ahead of Tuesday’s BOJ statement.

Commodity Currencies (AUD, NZD, CAD)

The comdolls strengthened against the dollar and the yen on Friday, as risk appetite picked up and traders took advantage of the weak NFP and downbeat outlook for Japan. Canadian jobs data turned out stronger than expected, as the employment change figure showed a 42.9K reading instead of the estimated 21.5K figure while the jobless rate fell from 7.0% to 6.9%. However, Canada’s Ivey PMI missed the mark and slipped from 57.2 to 55.2 instead of improving to 58.3. Only the BOC business outlook survey and New Zealand NZIER business confidence index are due from the comdolls today.

By Kate Curtis from Trader’s Way

217

USD

The US dollar drew no support from traders in recent trading sessions, as there were no major reports released from the US economy and price action was still governed by the latest NFP disappointment. JOLTS job openings data is due today, along with speeches by a couple of FOMC voting members. Dovish remarks could push the dollar lower against its forex counterparts while hawkish comments could allow for a rebound.

EUR

The euro recovered to the dollar in recent trading, thanks to euro zone data coming in line with expectations. The German industrial production report showed a 0.4% uptick, slightly higher than the estimated 0.3% increase, while the euro zone Sentix investor confidence report showed a reading of 14.1 as expected. Only medium-tier reports are due from the euro zone today so a bit of consolidation might take place for euro pairs.

GBP

The pound rebounded slightly against the Greenback despite the lack of major data from the UK economy yesterday. Manufacturing production data is up for release today and it might show a 0.3% increase, lower compared to the previous month’s 0.4% uptick. A stronger than expected reading might lead to a bigger bounce for the pound while a weak figure could put it back in selloff mode.

CHF

The franc raked in the gains in recent trading as Swiss reports came in better than expected. The foreign currency reserves increased from 433.6 billion CHF to 437.9 billion CHF while Swiss CPI showed a 0.4% increase in price levels versus the estimated 0.3% uptick. Swiss retail sales and unemployment rate are up for release today and consumer spending could pick up by 0.9% while the jobless rate could hold steady at 3.2%.

JPY

The yen consolidated to most of its major counterparts in recent trading as traders await the release of the BOJ monetary policy decision. Dovish remarks or actual easing is expected, as the recent sales tax hike is expected to weigh on overall economic performance. Earlier today, the current account balance came in line with expectations and showed a narrower deficit of 0.04 trillion JPY.

Commodity Currencies (AUD, NZD, CAD)

The comdolls extended their wins yesterday, as dollar weakness stayed in the entire forex market. Data from New Zealand came in line with expectations, as the NZIER business confidence index stayed at 52. Australia is set to print its NAB business confidence figure today and possibly show an improvement that might boost the Aussie. Canadian housing starts and building permits are due, and another round of strong data might boost the Loonie.

By Kate Curtis from Trader’s Way

218

USD

The US dollar was still no match to its major currency counterparts as it lost a lot of ground to the franc, Kiwi, pound, and Japanese yen. USD/JPY tumbled to the 101.50 minor psychological support and bottom of the rising channel, indicating a possible bounce. There have been no major reports released from the US yesterday, with only the stronger than expected JOLTS job openings figure reported. However, this wasn’t enough to support the Greenback as traders closed most of their dollar longs ahead of the release of the FOMC meeting minutes today. Downbeat remarks from policymakers could push the dollar lower to its counterparts.

EUR

The euro made a decent rebound to the dollar in recent trading but edged lower to the Japanese yen. Only medium-tier data such as the French trade balance were released from the euro zone, as the bounce was mostly a result of a pick-up in risk appetite. German trade balance is up for release today and it isn’t expected to make a huge impact on euro movement.

GBP

The pound resumed its climb to the dollar in recent trading when the UK economy reported a stronger than expected manufacturing production figure. The report showed a 1.0% increase versus the estimated 0.3% uptick but the previous month’s figure was revised lower. Only the UK trade balance is up for release today and it might not derail the pound’s gains if it comes in as expected at a narrower deficit of 9.3 billion GBP.

CHF

The franc advanced to the dollar and most of its major counterparts lately when Switzerland printed a stronger than expected retail sales figure. The report showed a 1.0% gain versus the estimated 0.9% uptick but the previous figure was revised down to -0.1%. There are no major reports due from Switzerland today so dollar direction might dictate whether USD/CHF can keep dropping or not.

JPY

The yen gained against most of its major counterparts on the heels of a hawkish BOJ statement yesterday. Many were expecting to hear dovish remarks or hints of easing, but Kuroda said that the sales tax hike isn’t negatively affecting economic performance so far. He did mention that the central bank could add stimulus if necessary but he said that the economy is still on track to meet the 2% annual CPI target by the end of the year.

Commodity Currencies (AUD, NZD, CAD)

The comdolls recovered to most of its major counterparts in yesterday’s trading, with the exception of the strong yen. Australian NAB business confidence slipped from 7 to 4 while New Zealand NZIER business confidence held steady at 52. Canadian housing starts and building permits both came in weaker than expected. Data on Australian home loans and Westpac consumer sentiment are up for release today and strong figures might allow the Aussie to extend its gains. No other major reports are due from the comdoll economies.

By Kate Curtis from Trader’s Way

219

USD

The US dollar lost a lot of ground to its counterparts when the FOMC meeting minutes revealed that not all Fed officials agree with Yellen’s forecast of a rate hike around six months after asset purchases end. Some policymakers stressed the need to tighten gradually so as to not hurt inflation. This shows that Yellen’s rate hike time frame was merely a personal opinion and not necessarily a consensus among FOMC members. This might keep the dollar weak in the near term, as traders reduce or close their long dollar positions. Only the initial jobless claims report is up for release from the US economy today and this might not have such a huge impact on dollar movement.

EUR

The euro was able to rally against the dollar despite more remarks from ECB officials hinting at negative deposit rates. Data from the euro zone was actually weaker than expected as Germany printed a smaller than expected trade surplus of 15.7 billion EUR versus the estimated 18.0 billion EUR. French industrial production and CPI, along with Italian industrial production data, are up for release today but the euro might continue to take advantage of dollar weakness if these reports come in as expected.

GBP

The pound was one of the bigger winners in recent trading, as GBP/USD surged to a new monthly high after the FOMC release. The pair is on track to break past the previous highs around 1.6824 as traders price in positive expectations for today’s BOE interest rate decision. Recall that Carney spoke of hiking rates before the UK general elections next year so traders are expecting a round of hawkish remarks. UK trade balance and RICS house price balance came in stronger than expected.

CHF

The franc extended its winning streak to the dollar, despite the lack of data from Switzerland yesterday. There are still no reports due from the country today but the franc might continue its winning streak to the dollar on the heels of the FOMC meeting minutes.

JPY

The yen lost some ground to its major counterparts but struggled to hold steady to the dollar in recent trading. Risk sentiment still favored the higher-yielding currencies as the prospect of a delayed Fed rate hike could provide support for other global economies. Japan’s core machinery orders were weaker than expected with a decline of 8.8% versus the estimated 3.2% drop. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar weakness, with AUD/USD moving closer to the .9400 major psychological level and NZD/USD surging above .8700. Australian home loans showed a stronger than expected 2.3% increase while inflation expectations improved from 2.1% to 2.4%. Up next is the Australian jobs release which might show a weaker gain in hiring compared to the previous month’s 47.3K jump. Chinese trade balance is also due today and might impact Aussie movement.

By Kate Curtis from Trader’s Way

220

USD

The US dollar caught a small break from its selloff on Thursday’s trading, as the lack of top-tier data prevented traders from pushing in a clear direction. Initial jobless claims came in stronger than expected at 300K versus the estimated 314K figure while import prices posted a better than expected 0.6% increase. For today, the US core and headline PPI are up for release along with the preliminary UoM consumer sentiment figure for March. Stronger than expected figures could help the Greenback hold on to its latest gains while another set of weak data could put it back in selloff mode.

EUR

The euro was able to advance against the US dollar in recent trading but it gave up ground to the Japanese yen. Data from the euro zone was actually weaker than expected, with bleak French and Italian industrial production figures. There are no major reports due from the euro zone today so traders might be keen to book profits off their euro longs.

GBP

The pound retreated to the dollar and the yen in recent trading when the BOE decided to keep monetary policy unchanged for the meantime. Carney didn’t get a chance to give his usual hawkish remarks as there was no press conference scheduled after the rate statement, which means that traders will have to wait for the release of the BOE meeting minutes to see if the rest of the MPC members agree with Carney’s forecast of hiking rates before the UK general elections in May next year. UK CB leading index is due today but this might not have a huge impact on pound movement.

CHF

The franc extended its rally to the dollar, despite the lack of top-tier data from Switzerland. Traders are just taking advantage of dollar weakness and the franc is a viable option when pursuing risk-off market moves. There are still no reports due from Switzerland today as USD/CHF approaches a key support area around .8600 to .8700.

JPY

The yen continued to gain ground against the dollar and the rest of its forex counterparts when the BOJ meeting minutes revealed that the central bank isn’t considering additional easing moves for now. No other major reports are due from Japan for the rest of the week so the yen might be able to hold on to its recent wins.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to rally despite the quick pullbacks that occurred later on. The Australian dollar got a strong boost from better than expected employment data but returned some of its gains when China printed a bleak CPI reading of 2.4% for March. Data on Chinese new loans and money supply is due in the next few hours and might still have a say on Aussie price action. No other reports are lined up from the comdoll economies today as their currency price movement might depend on risk sentiment and US reports.

By Kate Curtis from Trader’s Way

221

USD

Trading among dollar pairs has been relatively subdued in the past days, as traders were off on a holiday. Most markets are still closed today so expect further consolidation from major currency pairs. There are no economic reports due from the US but traders are watching bond yields very closely to figure out the long-term direction for the Greenback. Risk sentiment could also play a key role in determining price action in today’s sessions.

EUR

The euro traded mostly sideways for the past week, thanks to the lack of major catalyst from the euro zone and other major economies. There are still no reports lined up from the euro zone today, although the shared currency is enjoying a bit of support against its currency rivals.

GBP

The pound jumped to a 4-year high against the dollar in the previous week, lifted by strong UK jobs data. However, the rally failed to carry on as most traders booked profits at key resistance levels. This week’s set of reports should determine whether pound pairs can extend their gains or not, but today’s schedule is empty so a bit of consolidation might be seen.

CHF

The franc let go of another batch of gains in recent trading, as there were no reports from Switzerland to give the franc a boost. There are still no reports due today since markets are closed and most traders are off on a holiday so expect some sideways movement for franc pairs unless there’s a significant change in risk sentiment.

JPY

The yen managed to hold on to its current levels in the past week, despite dovish remarks regarding the Japanese economy. Analysts are foreseeing more economic weakness in light of the latest sales tax hike, but the BOJ has been unfazed so far. There are no reports due from Japan today as major markets are closed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls showed a bit of weakness in the recent trading days, although the Loonie did get a boost from strong CPI readings. Weak export prospects for New Zealand, particularly in the dairy sector, weighed on the Kiwi. There are no reports due from these economies today as most financial markets are closed and traders are off on a holiday.

By Kate Curtis from Trader’s Way