Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
282

USD

The US dollar returned some of its recent gains to the euro but continued to advance against the pound, yen, and commodity currencies. There have been no major reports from the US, allowing traders to take profits off their recent euro shorts and trade mostly based on risk sentiment. For today, wholesale inventories and crude oil inventories are due from the US, both of which aren’t likely to have a material impact on price action once more. Bear in mind though that US President Obama is scheduled to announce the US government’s plan on ISIS and might lead to volatility during the US session.

EUR

The euro recovered off its recent lows to most of its major counterparts, as traders booked profits from their short positions. Data from the euro zone has been weaker than expected, as France reported a wider trade deficit of 5.5 billion EUR. French non-farm payrolls and industrial production data are due today, along with the German 10-year bond auction. Weak data could push the euro lower again, as traders seek to enter short positions on better prices.

GBP

The pound continued to sell off to the dollar but was able to bounce back against some of its forex counterparts when BOE Governor Carney announced that they might hike rates by spring next year. However, the reaction has been limited since traders are starting to doubt that the UK economy can recover by then. UK trade balance was weaker than expected with a wider deficit of 10.2 billion GBP. Today has the BOE inflation report hearings on tap and more hawkish remarks could add support to the pound.

CHF

The franc bounced back to action in recent trading, despite the lack of top-tier data from Switzerland. Traders are still expecting the SNB to take action as EURCHF approaches its floor but the lack of resolve has allowed some to take profits of their short franc positions. There are no reports due from Switzerland today, leaving the franc sensitive to euro movements and risk sentiment.

JPY

The yen had a mixed performance as it acted more as a counter currency in recent trading. Data from Japan has still been weak, with core machinery orders showing a weaker than expected 3.5% gain versus the estimated 4.1% rise and PPI hinting at a slowdown in price pressures. Tertiary industry activity had a flat reading, prompting many to speculate about further BOJ easing. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to the dollar when risk sentiment weighed on the markets and data from Australia and Canada disappointed. NAB business confidence in Australia slipped from 10 to 8 while home loans showed a weaker than expected 0.3% uptick. In Canada, housing starts fell from 200K to 192K. The RBNZ is set to make its monetary policy statement in the upcoming Asian trading session and might lead to Kiwi weakness if the bias turns dovish.

By Kate Curtis from Trader’s Way

283

USD

The US dollar returned some of its recent gains to its counterparts, as traders booked some profits off their positions. There were no major reports released from the US, as the medium-tier data such as wholesale inventories and crude oil inventories came in mostly in line with expectations. Initial jobless claims is due today and it might show a 306K reading, higher than the previous 302K figure. Stronger than expected data could lend more support for the dollar while weak results could keep gains in check.

EUR

The euro struggled to hold on to its recent gains but its rallies appeared to be losing steam against its counterparts. Medium-tier data from the euro zone came in line with expectations, as the French non-farm payrolls report showed a 0.1% quarterly uptick while the industrial production report showed a 0.2% gain. German and French CPI figures are due today, along with the ECB monthly bulletin. Weak inflation readings might lead to more euro selling while strong data could keep it supported.

GBP

The pound continued to get weighed down by increasing prospects of Scotland’s independence, although it did manage to recover when Carney spoke of possibly hiking interest rates by spring next year. Earlier today, RICS house price balance showed a weaker than expected 40% reading versus the estimated 47% figure while the previous month’s report was downgraded to show a 48% figure. There are no other reports due from the UK today, which might leave Scottish polls as a main driver of pound price action.

CHF

The franc made a strong bounce to the euro as speculations of SNB intervention or easing grew. An SNB official was quoted saying that negative rates is also a possibility for the Swiss central bank. There are no reports due from Switzerland today, as the increasing likelihood of easing from the SNB could keep the franc weak.

JPY

The yen continued to give up ground to most of its counterparts, even as data from Japan came in strong today. The BSI manufacturing index climbed from -13.9 to 12.7, indicating a return to expansion. There are no reports due from Japan today, leaving the yen vulnerable to risk sentiment and speculations of BOJ easing.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up further ground in recent trading, as the prospect of geopolitical tension and weaker economic growth weighed on sentiment. Earlier today, Australia reported a better than expected employment report, which showed a 121K increase in hiring for August versus the estimated 10.3K increase. Meanwhile, the RBNZ decided to keep rates on hold at 3.50% as expected while trying to talk down the overvalued Kiwi. Chinese CPI was weaker than expected at 2.0% versus the estimated 2.2% figure and the previous 2.3% gain.

By Kate Curtis from Trader’s Way

284

USD

The US dollar had a mixed performance, as it managed to extend its wins to the Japanese yen but gave up ground to the pound then consolidated to the euro. Data from the US economy was weaker than expected, as initial jobless claims showed a 315K reading, higher than the estimated 306K figure. For today, retail sales reports are due, with the headline figure slated to show a 0.3% gain and the core figure likely to print a 0.2% uptick. Stronger than expected data could be positive for the US dollar, along with positive consumer sentiment reports.

EUR

The euro consolidated against the dollar in recent trading, as there have been no surprises from the euro zone economy recently. German CPI stayed flat as expected while French CPI also came in line with estimates of a 0.4% uptick. Euro zone industrial production and employment change data are due today and another round of weaker than expected figures might lead to more selling for euro pairs.

GBP

The pound managed to erase some of its recent losses as concerns of Scottish independence appeared to fade. There were no reports released from the UK economy yesterday while today has the construction output and leading index due. For now, early polls on Scottish independence might play a major role in pound price action, with growing margins in favor of independence likely to result in pound selling.

CHF

The pound recovered some of its losses in the latest trading sessions, as concerns of potential SNB intervention eased. There are no reports due from Switzerland today so franc movement might hinge on euro zone events or market sentiment.

JPY

The yen lost further ground to the dollar but was able to bounce back against some of its higher-yielding counterparts, except for the pound. Data from Japan has surprised to the upside, with the BSI manufacturing index landing back in positive territory and reflecting expansion. For today, revised industrial production data and BOJ Governor Kuroda’s speech are lined up.

Commodity Currencies (AUD, NZD, CAD)

Comdolls continued to weaken as Chinese CPI figures disappointed, with the headline figure falling from 2.3% to 2.0% and producer prices hinting at a deeper slowdown in inflation. Not even the strong Australian jobs report was able to shore up the Aussie, as components revealed that the gains were spurred mostly by part-time hiring. In Canada, NHPI was flat instead of marking a 0.2% gain. Chinese money supply data was weaker than expected, putting more weight on commodity currencies once more. Chinese industrial production and fixed asset investment data are due over the weekend.

By Kate Curtis from Trader’s Way

285

USD

The US dollar regained ground to most of its major counterparts, as traders started positioning ahead of this week’s FOMC statement. Data from the US economy came in stronger than expected, with headline retail sales marking a 0.6% gain and the core version of the report showing a 0.3% increase. This was stronger than the estimated 0.3% uptick and 0.2% rise respectively while the previous month’s figures were upgraded. Preliminary UoM consumer sentiment was also stronger than expected, as the index climbed from 82.5 to 84.6 and reflected increased optimism. Empire State manufacturing index and industrial production data are due today.

EUR

The euro struggled to hold steady around 1.2950 against the dollar last week, as the shared currency got a bit of support from stronger than expected industrial production and employment change figures. Industrial production marked a 1.0% gain versus the estimated 0.6% uptick while employment change showed a 0.2% increase for the previous quarter, higher than the projected 0.1% rise. Euro zone trade balance is due today and a higher trade surplus is eyed.

GBP

The pound continued to weaken against the dollar but managed to hold on to its current levels against the yen on Friday, as UK construction output stayed flat. Profit-taking may have played a huge role in price action, as traders closed positions ahead of this week’s top-tier UK events. There are no major ones lined up for today but tomorrow has the UK CPI while Wednesday has the BOE minutes and UK jobs figures on tap. Thursday will have the Scottish referendum and UK retail sales release. Earlier today, the Rightmove HPI marked a 0.9% rebound for September.

CHF

The franc had been moving uneasily as traders are anticipating intervention from the SNB this week. The currency lost further ground to the euro then recovered slightly to the dollar last week. Swiss PPI is due today and a 0.2% uptick is eyed to follow the previous flat reading, with a weaker than expected result likely to weigh on the franc.

JPY

The yen continued to weaken to the dollar and its major counterparts as the Japanese economy showed further signs of weakness. There are no reports lined up today as Japanese banks are on holiday, leaving yen pairs at the mercy of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot last Friday and most gapped down over the weekend, as Chinese data came in mostly weaker than expected over the weekend. Industrial production in China is up by 6.9% instead of the estimated 8.8% increase while fixed asset investment marked a mere 16.5% gain instead of the projected 16.9% increase. Retail sales was also slightly weaker than expected. Earlier today, Australia reported a 1.8% decline in new motor vehicle sales.

By Kate Curtis from Trader’s Way

286

USD

The US dollar returned some of its recent wins, as traders continued to reduce their dollar exposure ahead of this week’s FOMC statement. Data from the US came in mixed, with the Empire State manufacturing index showing a stronger than expected jump from 14.7 to 27.5 and the industrial production report printing a 0.1% decline. US PPI and TIC long-term purchases are due today, both of which aren’t likely to spur huge dollar moves unless the figures come in way above or below expectations. Both core and headline PPI are slated to print 0.1% gains.

EUR

The euro struggled to hold on to its current levels, as traders are anticipating weak demand for the ECB’s TLTRO this week. Euro zone trade balance came in weaker than expected, showing a smaller trade surplus of 12.2 billion EUR from the previous 13.8 billion EUR and the estimated 15.9 billion EUR. German and euro zone ZEW economic sentiment data are due today and more declines are expected, with the German ZEW projected to dip from 8.6 to 5.2 and the region’s ZEW likely to fall from 23.7 to 21.3.

GBP

The pound held steady against most of its major counterparts, waiting for the top-tier events in the UK this week. For today, the CPI figures are due and another decline in the headline inflation report is expected while the core figure could hold steady at 1.8%. Underlying inflation figures, such as the PPI and HPI, might also have an impact on pound movement as negative readings could increase the downward pressure on the currency.

CHF

The franc is trading uneasily ahead of the SNB decision this week, with some traders expecting to see negative deposit rates or intervention from the Swiss central bank. Bear in mind that EUR/CHF is trading dangerously close to the SNB floor at 1.2000 and jawboning could provide support for the pair. Swiss PPI was weaker than expected as it showed a 0.2% decline, reminding market participants that deflation is also a threat in Switzerland. There are no economic reports due from the country today.

JPY

The yen recovered some of its recent losses, particularly against the dollar and the Aussie. There were no reports released from Japan yesterday as banks were closed on holiday while today has BOJ Governor Kuroda’s speech on tap. He isn’t likely to drop any huge hints on potential easing, as the central bank head has insisted that the economy could stay resilient.

Commodity Currencies (AUD, NZD, CAD)

After gapping down over the weekend, AUDUSD enjoyed a bit of support as it climbed back above the .9000 handle. Chinese foreign direct investment marked a 1.8% decline, another point against the Australian dollar. Minutes of the RBA meeting showed that policymakers are getting more concerned about rising house prices in the country and that the central bank has no plans of cutting rates. Later on, Canadian manufacturing sales data is due and might show a stronger 1.1% gain compared to the previous 0.6% uptick. BOC Governor Poloz also has a speech scheduled during the US session.

By Kate Curtis from Trader’s Way

287

USD

The US dollar was unable to advance against most of its forex counterparts in yesterday’s trading sessions, as traders eased off their long positions ahead of today’s FOMC statement. While the Fed is expected to carry on with its taper of $10 billion and acknowledge the recent improvements in the economy, Chairperson Yellen might adopt a cautious stance in reiterating that rates will not be hiked until the recovery is sustained. Data from the US economy was weak yesterday, with the headline PPI staying flat instead of posting the estimated 0.1% gain and TIC long-term purchases posting a surprise negative reading.

EUR

The euro edged slightly higher to the dollar but was unable to break past the 1.3000 handle, as sentiment for the shared currency remained mostly bearish. German ZEW economic sentiment came in stronger than expected at 6.9, but this still marks a considerable decline from the previous 8.6 reading. Meanwhile, the euro zone ZEW slipped from 23.7 to 14.2, worse than the estimated 21.3 figure. Euro zone final CPI readings are due today and no changes are expected.

GBP

The pound had a volatile day as it broke below 1.6200 to the dollar only to recover to 1.6300 later on. CPI readings came in mostly in line with expectations, as the headline figure fell from 1.6% to 1.5% while the core figure improved to 1.9%. PPI input prices marked a 0.6% decline while the retail price index showed a weaker than expected 2.4% reading, suggesting that price pressures are still weak in the country. BOE minutes and the UK jobs release could add volatility to pound movement today, with an expected 2-7 vote to hike rates and a potential 29.7K drop in joblessness.

CHF

The franc continued to move carefully against its counterparts as traders start to price in potential easing or intervention from the SNB tomorrow. There have been no reports released from Switzerland yesterday, but SNB officials have been hinting at the possibility of negative deposit rates.

JPY

The yen was back in its weak state yesterday, as it sold off to most of its major counterparts except for the US dollar. BOJ Governor Kuroda refrained from announcing big policy changes, as he stressed that the economy could recover and that no easing measures are needed for now. There are no reports due from Japan today, which leaves yen pairs sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls recovered slightly in recent trading, with AUDUSD and AUDJPY edging higher. The RBA minutes stressed that policymakers are not looking to cut rates soon as they are getting concerned about stronger house price inflation. In Canada, manufacturing sales came in better than expected at a 2.5% increase and an upward revision in the previous figure. New Zealand’s current account balance came in as expected at a deficit of 1.07 billion NZD, lower than the previous 1.47 billion NZD shortfall. The country will release its quarterly GDP report in the next Asian trading session.

By Kate Curtis from Trader’s Way

288

USD

The US dollar got a strong boost from the FOMC statement, as the Fed shared some details on their exit strategy plans. As expected, the US central bank pushed through with its $10 billion monthly reduction in asset purchases and is likely to end easing in October with a $15 billion taper. However, interest rates might still stay low for a “considerable time” after easing ends, as Yellen mentioned that the labor market has yet to fully recover and that inflation is still below target. Growth downgrades for 2015 were also seen yet dollar traders were more focused on the fact that the Fed is preparing to tighten policy. US building permits and initial jobless claims are due today while Yellen is set to give another testimony.

EUR

The euro resumed its selloff to the dollar but advanced to the yen, as traders saw a stronger than expected headline CPI from the euro zone. The figure was upgraded from 0.3% to 0.4%, easing some deflationary concerns. The ECB’s targeted LTRO is set to start today and might draw enough demand, which might then keep the euro afloat.

GBP

The pound drew support from upbeat UK jobs figures, with the claimant count change showing a 37.2K drop in joblessness and the unemployment rate improving from 6.4% to 6.2%. Wage growth was also seen, as average hourly earnings marked a 0.6% gain while the previous month’s report was upgraded to show a smaller 0.1% dip. Meanwhile, the BOE minutes revealed that a couple of policymakers still voted to hike rates. The Scottish referendum could be the main event risk for the pound today, even as the UK gears up to print its August retail sales report.

CHF

The franc was still in a weak spot to most of its counterparts, as traders are starting to speculate on further easing from the SNB. Negative deposit rates have been suggested while the prospect of central bank intervention is also on the table. This might lead to a surge in volatility among franc pairs, especially if the SNB does take action.

JPY

The yen gave up more ground to its forex rivals, with traders moving more of their funds to the US dollar instead. USDJPY jumped past the 108.50 barrier to highs not seen in the past six years, indicating that a stronger rally might be seen. Data from Japan was better than expected today, as the trade balance marked a 0.92 trillion JPY deficit, smaller than the previous 1.02 trillion JPY shortfall and the projected 0.99 trillion JPY deficit.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to the dollar, with AUD/USD dipping back below the .9000 mark and NZD/USD testing the .8100 mark. New Zealand GDP was actually stronger than expected at 0.7% versus the estimated 0.6% growth figure, still lower than the previous 1.0% GDP reading. There are no major reports due from the comdoll economies today, with only medium-tier data such as foreign securities purchases up for release from Canada.

By Kate Curtis from Trader’s Way

289

USD

The US dollar recovered ground against most of its major counterparts, despite mixed data from the US economy. The Greenback was able to advance to the commodity currencies and the yen, while giving up some ground to the euro and the pound. Initial jobless claims came in at 280K, lower than the estimated 312K figure. However, building permits and housing starts both fell short of estimates while the Philly Fed index slipped from 28.0 to 22.5. There are no reports due from the US economy today, which suggests that risk sentiment and profit-taking ahead of the G20 Summit this weekend might be seen.

EUR

The euro rallied to the yen but lost ground to most of its major forex rivals, as the ECB’s targeted long-term refinancing operations began. There were no reports released from the euro zone then while today has only a couple of medium-tier releases on tap, namely the German PPI and current account. Weak data could keep euro gains in check while strong figures could allow it to stay afloat.

GBP

The pound was able to strengthen against its counterparts as exit polls of the Scottish referendum indicated a margin in favor of the “No” votes. This suggests a good chance that Scotland will stay in the UK and that political and economic uncertainty might be avoided. The official results won’t be released until the end of the trading week, which suggests that exit polls might still continue to drive pound movement until then. UK retail sales came in line with estimates of a 0.4% uptick. There are no reports due from the UK today.

CHF

The franc rallied after the SNB decided against implementing negative deposit rates or announcing intervention measures for now. While the SNB did have a strong resolve to defend the EURCHF floor and to ward off deflation, their lack of action was seen as a reason to close short franc trades for the time being. There are no reports lined up from Switzerland today.

JPY

The yen continued to give up ground to most of its counterparts, taking USDJPY to new highs not seen since 2002. Officials have been giving cautious assessments of the Japanese economy, citing that yen weakness might actually help spur inflation and growth. Japan’s all industries activity index is due today and a weak reading below 0.4% might lead to more yen losses.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost further ground to the dollar but managed to score some wins against the yen. New Zealand visitor arrivals slipped by 3.0% recently while credit card spending slipped from 4.5% to 4.2%. Canadian CPI and wholesale sales are due today and might spur more volatility for the Canadian dollar.

By Kate Curtis from Trader’s Way

290

USD

The Greenback resumed its rally against most of its major counterparts on Friday, despite the lack of top-tier data from the US economy. For today, only the existing home sales report is up for release and it might show a climb from 5.15M to 5.21M, which might allow the dollar to extend its gains. Also for today, FOMC member Dudley is set to give a testimony and his monetary policy bias could also affect dollar movement.

EUR

The euro dropped to the dollar once more, as the weak demand for the ECB’s targeted long-term refinancing operations weighed on the shared currency. German PPI came in line with expectations of a 0.1% decline while the euro zone current account balance showed a better than expected result. The German central bank monthly report is due today, along with a speech by ECB Governor Draghi. Dovish remarks could lead to more losses for the euro.

GBP

The pound gave up some ground on Friday, as traders booked profits off their long positions after the Scottish referendum. There have been no reports released from the UK then and there are none due today, which might keep pound pairs in consolidation for the time being.

CHF

The franc resumed its decline in recent trading, although it did manage to hold on to its recent levels to the euro. There have been no reports released from Switzerland then and none are due today, which could leave the franc sensitive to risk sentiment.

JPY

The yen made a bit of a recovery on Friday, thanks to profit-taking. The all industries activity index showed a 0.2% decline instead of the projected 0.4% uptick, confirming speculations that the Japanese economy still hasn’t recovered. There are no reports lined up from Japan today, leaving the yen at the mercy of market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi resumed their weak bout to the dollar on Friday, with the Loonie managing to advance on the heels of better than expected Canadian CPI. The core version of the report showed a 0.5% gain while the headline figure stayed flat instead of posting the projected 0.1% decline. This was enough for traders to ignore the weaker than expected Canadian wholesale sales report. For today, there are no reports due from the comdoll economies.

By Kate Curtis from Trader’s Way

291

USD

The Greenback dominated against most of its major forex counterparts, as it advanced to the comdolls but consolidated to the yen. Data from the US was weaker than expected yesterday as existing home sales fell short of expectations with its 5.05M reading instead of the projected climb from 5.14M to 5.21M. Only a few medium-tier reports are due from the US today, namely the flash manufacturing PMI and the Richmond manufacturing index. However, some FOMC members are set to testify and their remarks could contain clues on their policy biases.

EUR

The euro was still in a weak spot yesterday, following the weak take-up of the ECB’s targeted long-term refinancing operations. Consumer confidence fell recently, as the euro zone index slipped from -10 to -11. Draghi hinted that more ECB action is possible if the economy fails to take advantage of the recent easing moves. For today, German and French manufacturing and services PMIs are due and weak readings might inspire more losses for the euro.

GBP

The pound struggled to recover in recent trading as it edged gradually higher to the dollar and consolidated to the yen. There were no reports released from the UK yesterday while today has only the BBA mortgage approvals report on tap. A small increase from 42.8K to 42.9K is eyed but a stronger than expected result might lead to more gains for the pound.

CHF

The franc gave up some ground to the dollar and euro recently, despite the lack of data or events in Switzerland. There are still no reports due form the country today but the increasing likelihood of more ECB easing could continue to weigh on the franc as traders also anticipate action from the SNB.

JPY

The yen continued to recover against most of its forex counterparts while consolidating to the dollar yesterday. There have been no reports released from Japan then while banks are on holiday today, leaving yen pairs at the mercy of market risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

Thecomdoll gang was still doing poorly recently, despite the lack of reports from Australia, New Zealand and Canada. For today, Canada has the retail sales figures due, with the headline report likely to print a mere 0.4% uptick and the core version to show a 0.1% decline. Chinese HSBC flash manufacturing PMI came in better than expected at 50.5, up from the previous 50.2 reading, indicating a potential industry rebound and positive prospects for the Australian dollar.

By Kate Curtis from Trader’s Way

292

USD

The US dollar regained ground against most of its major counterparts, although it did have trouble extending its wins to the Japanese yen. Risk aversion from geopolitical tension appear to be favoring the lower-yielding dollar for now, as the US and its partner nations just recently launched another round of airstrikes against ISIS in Syria. Data from the US was strong, as the flash manufacturing PMI held steady at 57.9 while the Richmond manufacturing index improved from 12 to 14 instead of dipping to 10. US new home sales and crude oil inventories data are due today.

EUR

The euro struggled to hold ground in recent trading but ended up weaker to the yen and the dollar. Data from the euro zone was mixed, although most German and French PMIs came in the red. Only the French manufacturing PMI and German services PMI surprised to the upside while the rest of the figures, including the euro zone overall readings, came in the red. German IFO business climate data is due today and the index could fall from 106.3 to 105.9.

GBP

The pound tried to advance in recent trading even though UK data came in weaker than expected. BBA mortgage approvals fell from 42.7K to 41.6K while public sector net borrowing increased to 10.9K. For today, there are no major reports due from the UK, which suggests that the pound could be influenced mostly by risk sentiment.

CHF

The franc had a volatile trading day although there were no reports released from Switzerland. Weaker than expected euro zone PMI also weighed on the franc, as this increased the odds of further easing from the ECB and the potential for intervention from the SNB. The Swiss UBS consumption indicator is due today, along with the SNB quarterly bulletin.

JPY

The yen had a mixed performance as it held steady to the dollar but gained ground to the euro and some of the commodity currencies. There were no reports released from Japan then and none are due today, leaving the yen functioning mostly as a counter currency.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar got a bit of a boost from better than expected Chinese HSBC flash manufacturing PMI, as the index improved from 50.2 to 50.5 instead of falling to 50.0. However, Canada’s retail sales report fell short of expectations, as the headline figure marked a 0.1% decline while the core version of the report showed a 0.6% drop. New Zealand trade balance came in better than expected, with a smaller deficit of 472 million NZD versus the previous 724 million NZD and the estimated 1125 million NZD deficit. There are no major reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

293

USD

The US dollar regained ground to most of its counterparts as risk aversion continued to dominate financial trading. Data from the US was stronger than expected as new home sales climbed from an upgraded 427K to 504K, outpacing the consensus at 432K. For today, durable goods orders data are due and the headline figure is slated to print a 17.7% drop while the core figure might show a 0.7% rebound. Weaker than expected data could force the Greenback to retreat while strong figures could lead to more gains.

EUR

The euro struggled to hold steady recently despite weak data from Germany. The latest IFO business climate reading slipped to a 17-year low at 104.7, down from the previous 106.3 reading and lower than the estimated 105.9 figure. This indicates that businesses are not very hopeful about economic prospects in the euro zone’s largest economy. Euro zone money supply and private loans data are due today but these might not have much of an impact on price action.

GBP

The pound tried to advance against most of its forexrivals as there were no reports released from the UK. Today has the CBI realized sales report due and a drop from 37 to 34 is expected. However, a stronger than expected reading might lead to more gains for the pound. Also lined up for today is a speech by BOE Governor Carney, with upbeat remarks likely to give the pound a stronger boost.

CHF

The franc gave up ground to the dollar in recent trading as the UBS consumption indicator posted another decline. The index fell from 1.67 to 1.35, indicating weakening consumption. For today, there are no reports lined up from Switzerland, which could leave the franc at the mercy of risk sentiment.

JPY

The yen managed to hold steady to the pound but advanced to most of its counterparts, including the euro and the commodity currencies. Japanese flash manufacturing PMI slipped from 52.2 to 51.7 in September, reflecting a slower expansion in the industry. For today, the services producer price index marked a weaker than expected reading. Inflation reports from Japan are due in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered a wave of selling earlier today, as RBNZ Governor Wheeler spoke of the unsustainable trading levels of the Kiwi. He said he is open to exchange rates, leading to speculations of intervention. There are no other reports due from the comdoll economies today, although the recent news of a potential change in PBoC leadership is keeping uncertainty in the markets.

By Kate Curtis from Trader’s Way

294

USD

The US dollar had another mixed performance, as it gave up ground to the euro and yen but rallied to the commodity currencies. Data from the US was mostly in line with expectations, as the core durable goods orders report showed a 0.7% gain while the initial jobless claims came in at 293K. However, the headline durable goods orders figure fell short of consensus as it marked an 18.2% drop versus the estimated 17.7% decline. For today, US final GDP data could determine Greenback price action, as the figure could be upgraded from 4.2% to 4.6%.

EUR

The euro struggled to recoup its recent losses to the dollar but wound up weaker to the pound and most of its other forex counterparts. Medium-tier data from the euro zone came in line with expectations while the Italian retail sales report showed disappointing results. German GfK consumer climate data is due today and a drop from 8.6 to 8.5 is expected. Weaker than expected figures could lead to more losses for the euro.

GBP

The pound tried to head higher in recent trading, despite the sharper than expected decline in CBI realized sales. The reading slipped from 37 to 31, lower than the estimated 34 figure. There are no reports due from the UK today so the pound might move to the tune of risk sentiment.

CHF

The franc lost ground to the dollar but continued to move sideways to the euro, as there were no major reports released from Switzerland yesterday. There are still no event risks lined up for today, which means that the franc could just take its cue from the euro or market sentiment.

JPY

The yen suffered another round of selling in today’s Asian session as the Japanese inflation readings fell short of expectations. Core CPI in Tokyo fell from 2.7% to 2.6% instead of holding steady while the national core CPI dipped from 3.3% to 3.1%, lower than the estimated drop to 3.2%. Without the effect of the sales tax hike, core inflation is just at 1.1%, which is just over half the central bank’s 2% target. There are no other reports due from Japan today but the weak inflation readings could boost calls for more easing, which might weigh on the yen for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to their counterparts, mostly due to RBNZ Wheeler’s remarks favoring a weaker Kiwi. He said that he welcomes a move to more sustainable exchange rate, which might see NZDUSD at .7500 eventually. RBA Governor Stevens expressed concerns about housing sector investment, which also led to a bit of Aussie weakness.

By Kate Curtis from Trader’s Way

295

USD

The US dollar continued to advance against most of its major counterparts, as data from the US economy came in line with expectations. The final GDP reading was revised from 4.2% to 4.6%, reflecting stronger growth in the previous quarter. Consumer sentiment and inflation expectations from the University of Michigan were unchanged. Core PCE price index and data on personal spending and income are up for release today, with improvements likely to push the dollar higher.

EUR

The euro edged lower on Friday, as the German GfK consumer climate index slipped from 8.6 to 8.3, lower than the estimate at 8.5. German import prices saw a 0.1% decline, lower than the projected 0.2% drop. German and Spanish preliminary CPI figures are due today and these could set the tone for the euro zone flash CPI estimates due later this week.

GBP

The pound continued to decline against most of its counterparts on Friday, as there were no reports to give it a boost. For today, UK mortgage approvals and net lending to individuals data is due and strong figures could push the pound higher. Apart from these medium-tier data, the pound might simply rely on market sentiment for price direction.

CHF

The franc gave up ground to the dollar but continued to consolidate to the euro, as there were no reports out from Switzerland then. For now, the prospect of currency intervention from the SNB is keeping EURCHF afloat but speculations of further ECB easing could provide more volatility for the pair.

JPY

The yen weakened to the dollar as Japan released another round of bleak inflation figures last Friday. The national core CPI fell from 3.3% to 3.1% while the Tokyo core CPI dipped from 2.7% to 2.6%. More data from Japan are up for release this week and this could determine whether the economy is really recovering from the sales tax hike or not.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up more ground to the dollar on Friday, led mostly by losses for the Kiwi. Earlier today, data from the RBNZ foreign currency holdings indicated that the central bank intervened in August. Prime Minister John Key even mentioned that he’d like to see NZDUSD trade around .6500. There are no other reports due from the comdoll economies today, which suggests that their currencies could move to the tune of risk sentiment.

By Kate Curtis from Trader’s Way

296

USD

The US dollar continued to advance against its forex counterparts, especially to the euro and the yen. Data from the US economy was actually weaker than expected but it appears that risk sentiment has favored the safe-havens recently. Chicago PMI fell from 64.3 to 60.5, lower than the estimated 61.6 reading, while the CB consumer confidence reading slipped from 93.5 to 86.0, worse than the projected 92.2 figure. US ADP non-farm employment change data is due today and a 207K reading is expected. Also due today is the ISM manufacturing PMI, which might dip from 59.0 to 58.6.

EUR

The euro suffered another round of selling in recent trading after the euro zone CPI forecasts came in weaker than expected. The headline flash reading fell from 0.4% to 0.3% while the core CPI estimate fell from 0.9% to 0.7%, reviving concerns of deflation and calls for extra ECB easing. German retail sales and French consumer spending data both printed stronger than expected figures though, but these were mostly ignored by the markets. German unemployment picked up by 12K, adding to the euro’s weakness. Spanish and Italian manufacturing PMI are due today.

GBP

The pound gave up ground in recent trading as the UK current account balance came in weaker than expected and saw a downward revision for the previous figure. The final GDP was revised up from 0.8% to 0.9% though. For today, UK manufacturing PMI is up for release and it might improve from 52.5 to 52.6. Weaker than expected data could push the pound lower against its counterparts.

CHF

The franc resumed its selloff to the dollar but moved sideways to the euro in recent trading. There were no reports released from Switzerland then, as the franc took its cue from euro weakness. Swiss SVME PMI is due today and it might dip from 52.9 to 52.1, which would reflect a weaker expansion in the manufacturing industry.

JPY

The yen lost ground in today’s Asian trading session as the Tankan survey printed mixed results. The manufacturing component improved from 12 to 13 instead of falling to 10 while the non-manufacturing component slipped from 19 to 13, worse than the estimated reading at 17. Talks of further easing from the BOJ are also weighing on the yen for the time being.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to recover to the dollar recently, with NZDUSD pulling up to .7800 and AUDUSD retesting .8750. However, the selling resumed in today’s Asian trading session as Australia’s retail sales showed weaker than expected results while China’s manufacturing PMI held steady at 51.1. New Zealand’s GDT price index is up for release within the day and might also have an impact on Kiwi movement. There are no reports lined up from Canada.

By Kate Curtis from Trader’s Way

297

USD

The US dollar had a strong rally on Friday, as the September NFP report churned out stronger than expected results. Employment picked up by 248,000 during the month, higher than the projected 212,000 increase. The previous months’ reports were also upgraded, amounting to 69,000 in upward revisions. These were enough to bring the jobless rate down to 5.9% - its lowest level since mid-2008. However, average hourly earnings stayed flat and indicated that there is still a significant amount of slack in the economy. There are no major reports lined up from the US today, which suggests that previous trends might continue.

EUR

The euro gave up more ground to the dollar on Friday, as services PMI from Spain and Italy fell short of expectations. Spanish services PMI fell from 58.1 to 55.8, lower than the estimated 56.9 reading. Italian services PMI dropped from 49.8 to 48.8, reflecting a sharper contraction in the industry. German factory orders data is up for release today and a 2.4% decline is projected, with weaker than expected results likely to push the euro lower.

GBP

The pound also suffered a wave of selling last Friday as the UK services PMI came in weaker than expected. The reading slipped from 60.5 to 58.7, lower than the projected 59.1 figure. There are no major reports due from the UK today, leaving pound pairs likely to stay in consolidation or to move to the tune of risk sentiment.

CHF

The franc gave up a lot of ground to the dollar and the euro on Friday, despite the lack of data from Switzerland. The currency took its cue from weak euro data and the fact that the SNB might be moving to closer to currency intervention.

JPY

The yen had a mixed performance, as it lost ground to the dollar but gained against the pound and most of its major counterparts. There were no reports released from Japan then and none are due today, but traders are probably pricing ahead of a dovish BOJ statement this week as Japanese data has been mostly disappointing.

Commodity Currencies (AUD, NZD, CAD)

After a bit of retracements, the commodity currencies resumed their slide to the dollar on Friday. Canadian trade balance was weaker than expected at a 0.6 billion CAD deficit versus the projected 1.5 billion CAD surplus while the previous figure suffered a downgrade. ANZ reported a 0.9% pickup in job advertisements but it was weaker compared to the previous 1.6% gain. Canadian Ivey PMI is due today and an improvement from 50.9 to 53.4 is eyed.

By Kate Curtis from Trader’s Way

298

USD

The US dollar gave back some of its latest wins, as traders took profits off their long dollar positions yesterday. There have been no reports released from the US then, which allowed traders to reduce some of their holdings. For today, there are still no major US reports lined up, with only the JOLTS job openings and consumer credit data due. The US dollar could take its cue from speeches by a couple of FOMC members, who could provide more clues on how the upcoming FOMC minutes might turn out and what the Fed has in mind in terms of monetary policy adjustments.

EUR

The euro bounced strongly against the dollar in recent trading despite weak data from the euro zone. German factory orders saw a massive 5.7% decline, worse than the projected 2.4% drop. Euro zone retail PMI fell from 45.8 to 44.8, reflecting a sharper contraction in the industry. Sentix investor confidence slipped from -9.8 to -13.7, lower than the estimated -11.8 figure. For today, German industrial production data is up for release and a 1.4% decline is expected.

GBP

The pound made a small recovery yesterday, as traders booked profits off their dollar trades. Medium-tier data from the UK was better than expected, as the housing equity withdrawal report showed -10.8 billion GBP reading versus the projected -11.3 billion GBP figure while the previous quarter’s figure was upgraded. UK manufacturing production data is due today and a small 0.2% uptick is eyed. Also up for release are the BOE credit conditions survey and the industrial production report.

CHF

The franc bounced back to action in yesterday’s sessions, recovering to the dollar but losing further ground to the euro. There have been no reports released from Switzerland then while today has the retail sales, CPI and foreign currency reserves on tap. Retail sales could pick up by an annualized 0.8% while the CPI might show a 0.2% monthly uptick in price levels. The foreign currency reserves report could indicate whether or not the SNB has room to intervene in the forex market to defend the franc peg.

JPY

The BOJ is set to make its interest rate statement today and no actual policy changes are expected. However, any change in tone or rhetoric could spark huge yen moves as an inclination to ease again might lead to more losses. Bear in mind that data from Japan has been mostly disappointing lately, reminding policymakers that the country hasn’t fully recovered from the sales tax hike yet.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a chance to recover to the dollar recently, as profit-taking took place. Canada’s Ivey PMI came in better than expected at 58.6 versus the projected 53.4 reading and the previous 50.9 figure, reflecting a strong rebound in the manufacturing sector. The RBA is set to make its monetary policy statement today and might trigger a huge reaction from Aussie pairs if any changes are announced.

By Kate Curtis from Trader’s Way

299

USD

The US dollar had trouble getting back on its feet in yesterday’s trading sessions as most traders were still in profit-taking mode. Data from the US economy was mixed, as the JOLTS job openings came in stronger than expected while the IBD/TIPP economic optimism index fell short of estimates. Biases from FOMC officials who gave speeches were also mixed, discouraging traders from piling on their long dollar trades ahead of today’s FOMC minutes release. Indications that the Fed is seriously considering an exit strategy to be implemented soon might lead to more dollar gains.

EUR

The euro struggled to edge higher against its forex counterparts, despite weaker than expected data from Germany. The country’s industrial production report marked a 4.0% decline, worse than the projected 1.4% drop, while the previous month’s reading was downgraded to show a smaller increase. There are no reports due from the euro zone today.

GBP

The pound was unable to advance further in recent trading as UK manufacturing production came in weaker than expected. The report showed a mere 0.1% uptick instead of the projected 0.2% increase, slower than the previous 0.3% gain. Industrial production stayed flat in the same period. UK Halifax HPI is up for release today and it might show a 0.2% uptick, with weaker than expected data likely to weigh further on the pound.

CHF

The franc edged higher against the euro and the dollar recently, despite mixed data from Switzerland. The CPI showed a small 0.1% uptick instead of the projected 0.2% increase in price levels, reminding that deflation could still be a concern in the country. However, the retail sales report showed a strong 1.9% rebound while the previous figure was upgraded to show a smaller decline. Swiss jobless rate is due today and an improvement from 3.2% to 3.1% is eyed.

JPY

The yen regained strength to most of its major counterparts, particularly the dollar and the Kiwi. The BOJ decided to keep policy unchanged as expected, but cited weakness in production due to the sales tax hike. Earlier today, Japan’s current account balance came in weaker than expected as it saw a smaller surplus. The BOJ Monthly Report and Economy Watchers sentiment index is due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to recover in recent trading but were unable to take advantage of dollar weakness. The RBA decided to keep rates unchanged at 2.50% as expected, although they mentioned that hiring has been unusually volatile and that house prices remain a concern. Canadian building permits was weaker than expected at -27.3% versus the projected 6.0% drop while the previous data was downgraded. Canadian housing starts is up for release later and another weak reading might lead to a Loonie selloff.

By Kate Curtis from Trader’s Way

300

USD

The US dollar got hit by a wave of selling in recent trading, as the FOMC minutes turned out to be dovish. Policymakers weren’t too keen about hiking interest rates early next year as they reiterated that rates will remain low for a “considerable time” after easing ends. They also noted that the dollar strength is starting to weigh on external demand and may spark disinflation. Only the initial jobless claims report is up for release today and this might not have much of an impact on dollar trading if profit-taking continues.

EUR

The euro was able to recover to the dollar although it continued to weaken against some of its major counterparts. There were no reports released from the euro zone yesterday while today has only medium-tier data on tap. These are the German and French trade balance, which are both expected to weaken from their previous month’s readings.

GBP

The pound took advantage of dollar weakness recently as GBPUSD rallied strongly after the FOMC minutes were released. Halifax HPI in the UK was stronger than expected at 0.6% versus the projected 0.2% gain. For today, the BOE statement could drive pound price action, although no actual changes are expected. Any hawkish remarks could push the pound for more gains.

CHF

The franc continued to rally against the dollar but gave up some ground to the euro. There have been no major reports out of Switzerland yesterday, apart from the jobless rate which held steady at 3.2%. For today, there are no reports due from Switzerland and franc pairs might be sensitive to risk sentiment.

JPY

The yen showed signs of weakness to most of its counterparts but rallied to the dollar after the FOMC minutes were released. Japanese trade balance and Economy Watchers sentiment both came in weaker than expected, highlighting the odds of further easing from the BOJ. Earlier today, core machinery orders showed a strong 4.7% pickup. Preliminary machine tool orders data is up for release next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls advanced to the dollar and took advantage of the pickup in risk sentiment, as the Fed pledged to keep monetary policy easy for the time being. Canadian housing starts came in line with expectations at 197K while Australia’s jobs data printed weaker than expected results. Employment change fell by 29.7K while the previous reading was downgraded, keeping the jobless rate at 6.1%. There are no major reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way

301

USD

The US dollar managed to recover some of its recent losses, as data from the economy came in stronger than expected. Initial jobless claims came in at 287K, lower than the expected 291K figure and indicative of improving hiring trends. US import prices data and testimonies from a couple of FOMC members are lined up for today and these might determine if the Greenback could hold on to its current levels.

EUR

The euro resumed weakness in yesterday’s sessions, as ECB Governor Draghi reminded market watchers that they are ready to ease further if needed. He also reiterated that structural changes might be necessary in order to boost growth in the region. German trade balance was weaker than expected as it slipped to 17.5 billion GBP while the French trade balance came in line with expectations.

GBP

The pound suffered a quick selloff after the BOE interest rate statement, although the central bank refrained from making monetary policy changes. Traders might wait for the minutes of the meeting to be released before establishing their pound biases. UK construction output and CB leading index are up for release today and these might drive short-term GBP movement.

CHF

The franc returned some of its recent gains as it followed the euro’s footsteps. There have been no reports released from Switzerland then and none are due today, keeping the franc vulnerable to risk sentiment and possibly euro movement.

JPY

The yen managed to score wins in recent trading sessions as risk appetite remained weak during the Asian session. Japanese data was mixed, with core machinery orders showing better than expected results and preliminary industrial production falling short of expectations. Earlier today, the tertiary industry activity index marked a weaker than expected 0.1% decline while the previous reading was downgraded to show a 0.3% drop. Consumer confidence data is still up for release.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were back in a weak spot yesterday, as most gave up ground to the dollar. Australia’s jobs report showed bleak results, with a 29.7K drop in hiring while home loans showed a sharper than expected 0.9% decline, indicating that a potential housing price bubble may be starting to hurt the industry already. Canadian jobs data is up for release today and it might show an 18.7K rebound in hiring, enough to keep the jobless rate steady at 7.0%.

By Kate Curtis from Trader’s Way