Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
322

USD

The US dollar had a mixed performance as it regained ground to the pound, euro, and yen but continued to weaken to the rest of its counterparts. There were no reports released from the US yesterday, leaving risk sentiment as the main driver of price action. For today, there are still no reports due from the US as banks are closed on a holiday. Risk appetite could weaken and favor the US dollar as risks of a recession in Russia and geopolitical tension in eastern Ukraine weigh on higher-yielders.

EUR

The euro returned its recent wins to the dollar as euro zone economic data turned out to be disappointing. Industrial production in Italy fell by 0.9% instead of posting the estimated 0.2% rebound while the euro zone Sentix investor confidence reading marked a weaker than expected improvement. For today, there are no major reports out of the euro zone as most banks are also on holiday.

GBP

The pound weakened to most of its counterparts in recent trading sessions, despite the lack of data from the UK economy. Traders are probably pricing in expectations for Wednesday’s round of economic events, which include the release of the jobs report and the BOE inflation report. There are still no major events lined up from the UK today.

CHF

The franc also gave back its recent wins to the dollar, as the Swiss currency followed in the euro’s footsteps. There were no reports released from Switzerland then and none are due today, leaving market sentiment as the main driver of price action.

JPY

The yen resumed its slide to the dollar, as diverging monetary policy biases between the Fed and the BOJ took control of direction. There were no reports released from Japan yesterday, only comments from Japanese officials saying that the yen is excessively weak. However, emphasis on the likelihood of another sales tax hike next year was enough to drive the yen lower. For today, medium-tier data such as consumer confidence, preliminary machine tool orders and the Economy Watchers sentiment index are due.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar was dragged lower by downbeat inflation prospects in China, as producer prices in the world’s second largest economy saw a worse than expected 2.2% decline. Home loans in Australia slumped by 0.7% while the NAB business confidence index dipped from 5 to 4. Later on, the RBNZ financial stability report is due and a speech by RBNZ Governor Wheeler, with a downbeat outlook likely to drag the Kiwi down.

By Kate Curtis from Trader’s Way

323

USD

The US dollar gave back some of its recent gains to its forex counterparts as US traders were off on a Veterans Day holiday yesterday. Risk sentiment appeared to improve as geopolitical risks faded and US equity indices soared to new highs, but the dollar could still draw strong support once uncertainty takes center stage once more. There are still no major reports up for release from the US economy today, which suggests that sentiment could continue to be a main driver of price action.

EUR

The euro bounced back to the dollar in recent trading but it remains to be seen whether the shared currency could hold on to its gains or not. There were no major reports released from the euro zone yesterday while today has the German wholesale price index and the euro zone industrial production reports on tap. Both reports are slated to show improvements from their previous readings, which might lend a bit more support for the euro.

GBP

The pound recovered to most of its major counterparts, as profit-taking took place prior to today’s big events. Only the BRC retail sales monitor was released from the UK yesterday and it showed a flat reading for October. Today, the UK claimant count change is due and it might show a strong 24.9K pickup in hiring, which could be enough to bring the jobless rate down from 6.0% to 5.9%. Also due today is the BOE inflation report, which would contain central bank economic forecasts. Any downgrades could lead to pound weakness as it might push back BOE rate hike expectations for later next year.

CHF

The franc continued to appreciate against the euro as traders incorporated the potential impact of a Swiss gold initiative, which would require the SNB to hold at least 20% in gold reserves. This could limit the central bank’s ability to intervene in the market if EURCHF tests the 1.2000 floor, as this would push the gold holdings ratio much lower. There are no reports due from Switzerland today though, leaving the franc sensitive to news regarding the gold initiative.

JPY

The yen resumed its drop to its major counterparts, as a few medium-tier data from Japan came in below expectations. The consumer confidence index slipped from 39.9 to 38.9 while the Economy Watchers sentiment index fell from 47.4 to 44.0. Earlier today, Japan’s tertiary industry activity index marked a 1.0% gain as expected and renewed a bit of confidence in the economy. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a good mood yesterday, as risk appetite was responsible for driving most of the financial markets price action. In today’s Asian session, Australia reported a 1.9% increase in its Westpac consumer confidence index, allowing AUDUSD to test the .8700 handle. There are no other reports lined up from the comdoll economies today, leaving risk sentiment mostly in control.

By Kate Curtis from Trader’s Way

324

USD

The US dollar had a mixed performance as it gained ground to the European currencies and the yen while giving up gains to the commodity currencies. There were no reports released from the US economy yesterday, as Fed tightening expectations were mostly responsible for keeping the dollar afloat against most of its rivals. Only the initial jobless claims report is up for release today and analysts are expecting to see 282K in first-time claimants, higher than the previous 278K.

EUR

The euro moved mostly sideways to the dollar but ended lower, as data from the euro zone disappointed. Germany reported a 0.6% decline in its wholesale price index instead of the estimated 0.2% gain, reminding traders that deflation is a possibility in the region. Euro zone industrial production came in line with expectations of a 0.6% uptick. For today, German and French CPI readings are due, with negative readings expected. Worse than expected results could drive the euro much lower.

GBP

The pound suffered a sharp selloff in recent trading, as the UK jobs report disappointed and the BOE Inflation Report confirmed that a rate hike will be pushed back. Governor Carney cited further declines in inflation and threats to growth could delay tightening. Hiring picked up by 20.4K, lower than the estimated 24.9K increase, while the jobless rate was unchanged at 6.0%. Wage inflation picked up by 1.0% in the past three months though, higher than the projected 0.9% gain. There are no major reports out from the UK today.

CHF

The franc consolidated to most of its counterparts but managed to edge a bit higher to the euro on expectations regarding the gold initiative. This move might curtail the SNB’s ability to intervene in the currency market and keep the franc weak. There were no reports released from Switzerland yesterday while today has the PPI due. A figure weaker than the estimated 0.2% decline could lead to more franc weakness.

JPY

The yen resumed its slide to its counterparts as fresh uncertainties stemmed from Japan. News that Abe would dissolve parliament and call for a snap election next month led to yen volatility while his announcement regarding delaying the next sales tax hike gave the currency a bit of support. Data from Japan was mixed today, as the core machinery orders report marked a strong 2.9% gain while PPI missed the mark.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi seemed immune to RBNZ Governor Wheeler’s remarks regarding the overvalued currency, as traders focused on the relatively upbeat RBNZ Financial Stability Report. This indicated that lending restrictions won’t be relaxed just yet, which shows that the central bank is still confident in the housing recovery. Australia’s MI inflation expectations saw an improvement from 3.8% to 4.1%, adding to Aussie support. Later on, Chinese data on industrial production and retail sales might also have a strong effect on the comdolls.

By Kate Curtis from Trader’s Way

325

USD

The US dollar was able to squeeze out small gains to its forex counterparts, extending its rally to the yen and the pound. Data from the US economy was weaker than expected though, with the initial jobless claims posting a larger than expected reading while JOLTS job openings fell short of expectations. The dollar might find a clearer direction for today, with the retail sales and consumer sentiment data up for release. Headline retail sales could show a 0.2% gain while the core version of the report might also print a 0.2% rebound. Consumer sentiment is expected to improve from 86.9 to 87.3 based on the University of Michigan survey.

EUR

The euro resumed its weak bout to the dollar in recent trading, even as CPI readings came in mostly as expected. In Germany, the CPI showed a 0.3% decline as expected, same as in the previous month. In France, the CPI stayed flat instead of posting a 0.1% decline. For today, the GDP figures from Germany and France might have a huge say in euro movement, as these could indicate whether the region might fall into recession or not. Both top economies are expected to show 0.1% growth while Italy might reflect a 0.1% contraction. Weaker than expected data could lead to more euro selling.

GBP

The pound continued to decline against most of its forex rivals, as the latest BOE inflation report and the change in central bank stance weighed on the currency. Only the RICS house price balance was released from the UK yesterday and it printed a weaker than expected 20% figure versus the projected 25% reading. For today, the quarterly construction output report is due and a 3.7% rebound is eyed to follow the previous 3.9% decline.

CHF

The franc still rallied to the euro in recent trading, prompting many to speculate about potential SNB intervention. However, the lack of jawboning from SNB head Jordan and his men suggest that the central bank hasn’t come up with alternative measures to weaken the franc in the event the gold initiative pushes through. Swiss PPI was better than expected at a 0.1% dip versus the projected 0.2% decline. There are no reports lined up from Switzerland today.

JPY

The yen resumed its drop to most of its counterparts, although it managed to advance against the pound. Japanese industrial production data was revised slightly higher but this did very little to shore up yen demand. There are no reports due from Japan today, as the currency might move to the tune of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were hit by risk aversion when China printed weaker than expected economic data. Chinese industrial production came in at 7.7% versus the projected 8.0% gain while retail sales fell from 11.6% to 11.5%. Despite that, Chinese President Xi Jinping said that there’s no reason to be alarmed as growh in the country is stabilizing. Only the Canadian manufacturing sales report is up for release today and a 1.3% gain is expected.

By Kate Curtis from Trader’s Way

326

USD

Profit-taking and risk appetite combined forces to weigh on the US dollar last Friday, even as the economy posted stronger than expected reports. Consumer spending picked up by 0.3%, as shown by the headline and core retail sales figures, while consumer confidence improved from 86.9 to 89.4. This sets the tone for stronger overall growth in the US, which could keep the Fed on track to taper sometime next year. For today, only the industrial production and capacity utilization reports are due.

EUR

The euro staged a strong recovery towards the end of the trading week, as the region managed to avoid posting a negative growth figure. Germany showed a 0.1% expansion while France chalked up stronger than expected 0.3% GDP growth, allowing the euro zone to post a 0.2% GDP reading for Q3. The final CPI also came in line with expectations at 0.4% instead of reflecting weaker inflationary pressures. Italian and euro zone trade balance are up for release today, along with a speech by ECB Governor Draghi.

GBP

The pound took a break from the recent selloff and made a small pullback to the dollar while consolidating to the yen. UK construction output was weaker than expected at 1.8% versus the estimated 3.7% increase for the third quarter. Earlier today, the UK Rightmove HPI indicated a 1.7% decline, weaker compared to the previous 2.6% gain. No other reports are up for release from the UK today.

CHF

The franc continued its advance against the dollar and the euro on Friday, still supported by hopes of a gold referendum and lower odds of SNB intervention. There were no reports released from Switzerland then, as the franc also drew support from the fact that the euro zone economy didn’t contract recently. For today, there are no reports due from the Swiss economy.

JPY

The yen gained ground during the release of the latest GDP report from Japan, as the economy fell back in recession, which lowers the odds of another sales tax hike next year. The economy contracted by 0.4% for Q3 while the previous quarter’s reading was downgraded from -1.7% to -1.8%. There are no other reports due from Japan today, leaving traders to price in expectations for Prime Minister Abe’s announcement regarding a snap election and delaying the tax hike.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground on risk appetite, as the Loonie got an additional boost from stronger than expected manufacturing sales data. The report marked a 2.1% gain versus the estimated 1.3% increase. There are no major reports due from the comdoll economies today, leaving risk sentiment at the driver’s seat of price action.

By Kate Curtis from Trader’s Way

327

USD

The US dollar regained ground in recent trading, despite weaker than expected reports from the economy. Capacity utilization and industrial production missed the marks while the Empire State manufacturing index improved from 6.2 to 10.2, short of the estimated climb to 12.1. Data on producer price inflation is due today, with the headline figure likely to post a 0.1% dip and the core figure expected to show a 0.2% gain. Stronger than expected data could boost the U.S. currency while weak figures might lead to another short-term selloff.

EUR

The euro resumed its selloff to the dollar in yesterday’s sessions, as mixed reports came out of the region. Italy’s trade balance was slightly weaker than expected but the euro zone trade balance came in strong. Euro pairs might see more volatility today with the German and euro zone ZEW economic sentiment figures due. The German ZEW is slated to improve from -3.6 to 0.9 while the euro zone ZEW could climb from 4.1 to 4.3, reflecting small improvements in optimism. Stronger than expected figures could allow the euro to recover against its counterparts.

GBP

The pound carried on with its descent to most of its forex counterparts, as the sentiment from the latest BOE inflation report still weighed on the currency. The inflation figures are due today and might add support to the central bank’s dovish bias, as the annual CPI is slated to stay at 1.2% while producer prices are expected to show a sharper decline of 1.4%. Weaker than expected readings might worsen the pound’s slide.

CHF

The franc gave back some of its recent wins to the dollar but continued to edge higher against the euro, as there were no reports released from Switzerland yesterday. There are still no reports due from the country today, as the franc might take its cue from euro zone data.

JPY

The yen was back in selloff mode even after the recent GDP readings lowered the odds of seeing another sales tax hike next year. The economy contracted 0.4% in Q3, putting Japan back in recession. Prime Minister Abe is set to announce his plans for a snap election and the time frame for a sales tax hike and his remarks might have a strong impact on yen movement.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent wins, as traders booked profits off key levels. Foreign direct investment slumped 1.2% in China, weighing slightly on the Australian dollar in today’s Asian session. The New Zealand dairy auction is scheduled today and another decline in the dairy index could lead to more losses for the Kiwi.

By Kate Curtis from Trader’s Way

328

USD

The Greenback had a pretty good run in recent trading, as it advanced to most of its counterparts. Data from the US economy was better than expected, as the headline PPI marked a 0.2% increase in producer price levels versus the estimated 0.1% dip while the core CPI showed a 0.4% increase versus the projected 0.2% uptick. This indicates that inflationary pressures could continue to pick up and that the Fed might be able to move closer to hiking rates without worrying about deflation. The FOMC meeting minutes are up for release later and hawkish remarks could renew traders’ demand for the dollar.

EUR

The euro had a strong bounce in yesterday’s sessions, as ZEW figures beat expectations. The German ZEW improved from -3.6 to 11.5, reflecting a return in optimism. Meanwhile, the euro zone ZEW climbed from 4.1 to 11.0, outpacing the consensus at 4.3. For today, only the euro zone current account balance is due and it might not have such a huge impact on the shared currency’s price action.

GBP

The pound consolidated to the dollar but showed signs of heading further south, as UK inflation figures came in mixed. The headline CPI came in stronger than expected as it improved from 1.2% to 1.3% while the core CPI came in weak as it held steady at 1.5% instead of improving to the projected 1.6% figure. BOE minutes are up for release today and any shift to a more dovish stance among policymakers could lead to pound selling.

CHF

The franc was stuck in a very tight range to the euro as the EURCHF pair is inching very close to SNB intervention levels. While there have been no major updates on the gold initiative, rumors that the central bank is waiting with an order to sell francs at the 1.2000 mark was enough to keep the pair afloat so far. Swiss ZEW economic expectations data is due today and a strong improvement could lead to a franc rally.

JPY

The yen resumed its slide to the dollar and most of its counterparts as Prime Minister Abe confirmed that the snap election will take place in December and that the tax hike might be delayed. Traders are gearing up for another BOJ decision today and more dovish remarks are expected, as the Japanese economy slumped into recession in Q3.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent gains, as New Zealand’s dairy auction revealed another sharp drop in milk prices. This could mean more downside inflationary biases in the next few months, which could weigh on export revenues. New Zealand PPI figures are up for release in the next Asian trading session and there are no other major reports lined up from Australia and Canada.

By Kate Curtis from Trader’s Way

329

USD

The US dollar enjoyed renewed demand as the FOMC minutes seemed more upbeat than usual. While there was a debate regarding dropping the “considerable time” wording in keeping rates low after easing ends, policymakers confirmed that inflation concerns have eased and that the US economy could stay resilient despite the ongoing downturn in the global economy. US CPI figures are up for release today and this could add support to the Fed’s improved inflation outlook, with policymakers projecting that annual CPI could soon reach target levels once more.

EUR

The euro managed to put up a strong fight in recent trading, thanks to stronger than expected current account data. The surplus widened from an upgraded 22.8 billion EUR to 30.0 billion EUR instead of narrowing to the projected 21.3 billion EUR figure. For today, the German and French manufacturing and services PMIs are up for release and these might dictate euro behavior for the rest of the week. Small improvements are eyed, with some figures likely to indicate stronger expansion in the industries.

GBP

The pound had a relief rally in yesterday’s London session since the BOE minutes weren’t as dovish as expected. A couple of policymakers still voted to hike rates during their meeting but inflation concerns outweighed their hawkish biases. UK retail sales data is up for release today and a 0.4% rebound is eyed to follow the previous 0.3% decline, which might allow the pound to extend its rally.

CHF

The franc continued to tread carefully against the euro in recent sessions, as traders awaited more clues regarding potential SNB intervention and the gold initiative. Swiss ZEW economic expectations saw an improvement from -30.7 to -7.6, reflecting a reduction in pessimism. Swiss trade balance is up for release today and a weak reading might renew clamor for SNB intervention, although the surplus is estimated to widen from 2.45 billion CHF to 2.57 billion CHF.

JPY

The yen lost further ground to its counterparts even as the BOJ didn’t announce any major changes to monetary policy. Governor Kuroda gained more support for their easing program, as only one member dissented in expanding the monetary base by an annual pace of 80 trillion JPY. Policymakers still retained their upbeat outlook for the economy and mentioned that there might be no need to delay the tax hike as the government needs revenue.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground recently, as Australia’s MI inflation expectations index stayed flat while New Zealand released weaker than expected PPI figures. Input producer prices marked a 1.5% decline instead of the projected 0.3% uptick while output producer prices saw a 1.1% drop instead of the expected 0.2% increase. Canadian wholesale sales data is due today and a stronger 0.7% increase is expected.

By Kate Curtis from Trader’s Way

330

USD

The US dollar edged cautiously higher against most of its major counterparts, as data from the economy came in mixed. The headline CPI reading came in better than expectations of a flat figure instead of the projected 0.1% decline while the core CPI marked a 0.2% uptick as expected. The Philly Fed index also impressed as it surged from 20.7 to 40.8, reflecting a considerable pickup in manufacturing expansion. However, the flash manufacturing PMI fell from 55.9 to 54.7, suggesting that the industry wasn’t as strong as expected.

EUR

The euro seemed unfazed by the latest round of weak PMI figures from Germany and France, as the shared currency managed to hold steady against the US dollar. All the figures came in weaker than expected and reflected weaker expansion or a sharper contraction, with the exception of the French services PMI which was as expected at 48.8. This was enough to convince traders that a euro zone recession is still likely, although this scenario has long been priced in. ECB President Draghi is set to give a testimony today.

GBP

The pound had another quick bounce, thanks to stronger than expected UK retail sales data. Consumer spending picked up by 0.8% instead of the projected 0.4% increase, enough to make up for the 0.3% decline in the previous month. Only the UK public sector borrowing report is expected today and it might not have much of an impact on pound movement.

CHF

The franc gave up some of its recent wins to the euro as traders continued to speculate about SNB intervention. Swiss trade balance was actually better than expected at a surplus of 3.26 billion CHF versus the estimated 2.57 billion CHF while the previous reading was upgraded. There are no reports up for release from Switzerland today.

JPY

The yen continued its descent to its counterparts, although there was a bit of recovery seen at the start of today’s Asian trading session. Japan’s flash manufacturing PMI came in weaker than expected, leading many to agree that the economy is in for more weakness in the coming months. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls staged a decent recovery in recent trading sessions, as traders probably booked profits off key levels. New Zealand credit card spending picked up 6.7% recently, stronger than the previous 4.5% gain. For today, Canadian CPI figures are due and the headline figure could show a 0.3% decline while the core figure might print a 0.2% uptick.

By Kate Curtis from Trader’s Way

331

USD

The US dollar had a mixed performance as it returned some of its gains to the yen and comdolls while gaining more ground to the European currencies. There have been no reports released from the US economy then, leaving risk sentiment as a major mover of price action. The surprise rate cut by the Chinese central bank did revive risk appetite for a bit as it spelled better global growth prospects. There are no major reports due from the US economy today.

EUR

The euro suffered a sharp selloff to its forex counterparts on Friday when Draghi spoke of being ready to do whatever it takes to boost inflation. While this is not much of a surprise, knowing that the euro zone is facing potential deflation and a recession, these remarks triggered a huge reaction since the ECB is set to have another policy statement in a couple of weeks. Traders are starting to price in actual quantitative easing or possibly another round of rate cuts from the central bank. Only the German Ifo business climate report is due today and the index is expected to fall from 103.2 to 103.0, with a weaker than expected reading likely to spark another euro selloff.

GBP

The pound also gave up some of its recent gains, as the public sector net borrowing report came in slightly worse than expected. The deficit came in at 7.1 billion GBP versus the estimated 6.9 billion GBP borrowing figure, although the previous month’s reading was upgraded. There are no reports due from the UK today.

CHF

The franc gave up its recent wins to the dollar as traders priced in the potential effect of further ECB easing on the SNB’s policy bias. EURCHF has moved slightly above its tight range as some expected the SNB to announce easing measures or currency intervention in reaction to Draghi’s statement, but so far there has been none. The Swiss employment level report is due today and an improvement from 4.20 million to 4.22 million is eyed.

JPY

The yen recovered on Friday, as traders booked profits off key levels and ahead of today’s Japanese holiday. There were no reports released from Japan then and none are due today, leaving risk sentiment as the main driver of yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gained ground on the PBOC’s surprise rate cut announcement, as many speculated that this could lead to stronger global growth prospects. Data from China has been disappointing recently and economists think that the world’s second largest economy would miss its 7.5% GDP target. Canadian CPI figures have surprised to the upside, lending more support for the Loonie.

By Kate Curtis from Trader’s Way

332

USD

The US dollar had another mixed performance as it lost ground to the euro and franc, consolidated to the pound, and advanced against the yen and commodity currencies. The US currency appears to be acting as a counter currency for the time being, as risk sentiment also seems to be dictating price action. Data from the US was weaker than expected, as the flash services PMI fell from 57.1 to 56.3 instead of improving to the estimated 57.3 reading. For today, the US preliminary GDP and CB consumer confidence data are due. The GDP reading could be revised down from the initially reported 3.5% to 3.3% while the consumer confidence report might show an improvement from 94.5 to 95.9.

EUR

The euro recovered from its recent selloff, as traders probably booked profits off recent lows. Apart from that, the German Ifo business climate reading was stronger than expected, as it improved from 103.2 to 104.7 instead of falling to the estimated 103.0 reading. German final GDP and Italian retail sales data are up for release today, both of which aren’t expected to have a huge impact on euro price action.

GBP

The pound spent most of the trading day in consolidation, as traders are waiting for more clues from the UK economy. The BOE inflation report hearings are scheduled today and Carney might be set to explain why price pressures are weak and how he thinks it might fare moving forward. UK BBA mortgage approvals are also up for release and a decline from 39.3K to 38.5K is eyed.

CHF

The franc advanced to the dollar but stayed stuck in consolidation to the euro in recent trading sessions, as there have been no major reports out of Switzerland. There are still no reports lined up from the country today, leaving the franc at the mercy of risk sentiment.

JPY

The yen resumed its selloff mode today as Japanese traders returned from a holiday. The BOJ just released the minutes of their latest policy meeting, which indicated that some members are worried that the latest round of easing might not have such a strong effect on the economy as it did in the past. BOJ Governor Kuroda also gave a testimony in the early Asian session but his speech didn’t contain any surprises.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi suffered another round of selling in recent trading as China’s CB leading index showed a slight decline from 1.0% to 0.9% while New Zealand’s inflation expectations figure dipped from 2.2% to 2.1%. The Canadian dollar is still strong though, as the country is set to print its retail sales reports later on. Analysts expect to see strong figures, with the headline figure likely to rebound by 0.6% and the core figure to show a 0.4% uptick.

By Kate Curtis from Trader’s Way

333

USD

The US dollar barely benefitted from the upgraded Q3 GDP reading from 3.5% to 3.9%, as forex pairs seemed to react to risk appetite. Components of the report showed that the upgrade was a result of strong consumer spending data and a pickup in business investment. Weaker CB consumer confidence also prevented the dollar from extending its gains, as the reading fell from 94.1 to 88.7 instead of improving to the estimated 95.9 figure. For today, US durable goods orders data is up for release, along with the core PCE price index.

EUR

The euro advanced to most of its forex counterparts, as there were no bleak reports from the euro zone. Germany’s final GDP reading was unchanged at 0.1% while Italian retail sales came in slightly weaker than expected at a 0.1% decline versus the projected 0.2% increase. Data on German import prices is up for release today and a 0.3% decline is expected.

GBP

The pound struggled to hold on to its recent wins yesterday, despite weaker than expected BBA mortgage approvals data and downbeat U.K. inflation hearings. BOE Governor Carney mentioned that the U.K.’s economic prospects might be weighed down by global economic weakness and geopolitical tensions. For today, the second estimate of the U.K. GDP is due and no change is expected from the previous 0.7% figure.

CHF

The franc continued its advance to the dollar and consolidation to the euro since there were no major reports released from Switzerland recently. For today, the UBS consumption indicator is due and an improvement from the previous 1.41 reading might lead to an extended franc rally.

JPY

The yen put up a strong fight in recent trading, as it advanced to most of its forex counterparts. BOJ minutes indicated that policymakers are worried that the impact of the latest round of easing might not be as strong as it was before. There are no reports up for release from Japan today, leaving yen pairs at the mercy of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, with the Australian dollar falling sharply and the Kiwi and Loonie raking in a few gains. Canada’s retail sales report came in mixed, with the core figure staying flat instead of showing the projected 0.4% uptick and the headline figure marking a 0.8% increase. Earlier today, Australia’s construction work done for the third quarter saw a 2.2% decline versus the projected 1.7% drop and the previous 1.2% decrease. There are no reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way

334

USD

The US dollar didn’t fare so well in recent trading, as data from the economy came in mostly weaker than expected. Headline durable goods orders was the only report that showed strong results, with a 0.4% gain versus the estimated 0.4% decline. Core durable goods orders showed a 0.9% decline instead of the projected 0.5% uptick while initial jobless claims was worse than expected at 313K versus 287K. Personal spending and income both posted 0.2% gains, lower than the projected 0.4% increases. New home sales and pending home sales also missed their respective marks, along with the Chicago PMI and revised consumer sentiment figures. There are no reports due from the US economy today as traders are on Thanksgiving Day holiday.

EUR

The euro managed to recover against the dollar, as there were no reports released from the euro zone. For today, German preliminary CPI is due and is expected to show a flat reading after declining 0.3% in the previous month. Spanish flash CPI is also due, along with the German unemployment change report. Hiring is expected to pick up by only 1K in the euro zone’s largest economy and a weaker than expected increase might lead to euro losses.

GBP

The pound climbed steadily in recent trading, as data from the UK was mixed. There were no revisions to the second GDP estimate at 0.7% as expected while the CBI realized sales also came in close to expectations, marking a drop from 31 to 27. Preliminary business investment fell 0.7% in Q3 instead of showing the estimated 2.3% gain. There are no major reports due from the UK today.

CHF

The franc advanced to the dollar in recent trading, as there were no major reports from Switzerland while the US saw bleak readings. There are still no reports lined up from Swizterland today, although the franc might take its cue from euro zone data. Weak figures might also drive the Swiss currency lower while strong data could keep it afloat.

JPY

The Japanese yen held on to most of its recent gains since Japan didn’t print any new reports recently. Traders are still waiting for more clues from the economy and the BOJ before pricing in more easing expectations. For now, risk sentiment appears to be driving yen price action and the weak appetite for higher-yielders is benefitting the Japanese currency.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to recover to the dollar while weakening to the yen recently. Earlier today, Australia reported a stronger than expected 0.2% pickup in quarterly private capital expenditure instead of the estimated 1.7% drop. Only the Canadian current account balance is up for release from the comdoll economies today and this might not have such a huge impact on price action as most traders are off on a Thanksgiving holiday.

By Kate Curtis from Trader’s Way

335

USD

The US dollar regained ground to most of its major counterparts even as there were no reports out of the US economy during the Thanksgiving day holiday. For today, there are still no top-tier reports lined up, which could leave dollar pairs sensitive to risk sentiment.

EUR

The euro gave up ground to the dollar in recent trading but managed to advance against the Japanese yen. Data from the euro zone wasn’t so bad, as the German preliminary CPI came in flat as expected while the unemployment change report indicated a 14K increase in hiring. For today, German retail sales and euro zone flash CPI figures are due, with weak figures likely to weigh on the shared currency.

GBP

The pound was in a weak spot recently, even though there were no reports released from the UK yesterday. Earlier today, the GfK consumer confidence reading came in weaker than expected as it refused to budge from the -2 figure instead of improving to the projected -1 reading. UK Nationwide HPI is up for release later and it might show a 0.4% increase in house prices.

CHF

The franc gave up ground to the dollar, as it was no match to the lower-yielder in recent trading. There have been no reports released from Switzerland yesterday and none are due today, leaving the Swiss currency sensitive to euro movements and risk appetite.

JPY

The yen suffered a sharp selloff in the Asian trading session, as data from Japan still reflected persistent weaknesses. Household spending marked a better than expected 4.0% decline versus the projected 4.8% drop and the previous 5.6% decline while retail sales showed a 1.4% increase, slightly below the estimated 1.5% growth. National core CPI fell from 3.0% to 2.9% while the Tokyo core CPI declined from 2.5% to 2.4%. Preliminary industrial production marked a 0.2% gain instead of the estimated 0.4% drop.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up their recent wins to the dollar when risk aversion and profit-taking took hold. Australia reported a stronger than expected private capital expenditure figure while Canada also impressed with a better than expected current account balance. Building consents in New Zealand picked up by 8.8% versus the previous 11.9% drop. Canadian monthly GDP is up for release later on.

By Kate Curtis from Trader’s Way

336

USD

The US dollar regained ground to most of its forex counterparts on Friday, as traders booked profits ahead of the weekend. The currency was also given a boost by the results of the Swiss referendum, as the rejection of the gold initiative led to a drop in precious metal prices and a rally for the negatively correlated dollar. There were no reports released from the US economy on Friday while today has the ISM manufacturing PMI on tap. A drop from 59.0 to 57.9 is expected, which would reflect a weaker expansion in the industry.

EUR

The euro gave up ground to the dollar but rallied to the yen on Friday, as data from the euro zone came in line with expectations. Headline CPI fell from 0.4% to 0.3% while the core CPI held steady at 0.7%. The unemployment rate in the region also held steady at 11.5% as expected. Only the Spanish and Italian manufacturing PMIs are up for release today and these might not have such a large impact on euro movement, unless the results come in way off expectations.

GBP

The pound suffered another round of selling on Friday, as there were no reports to provide the currency any support then. The Nationwide HPI came in as expected at a gain of 0.3%. The manufacturing PMI is up for release today and a decline from 53.2 to 53.0 is expected, which would reflect a weaker industry expansion. Stronger than expected results could lead to a bounce for the pound while a weak reading could lead to a sharper decline. Net lending to individuals and mortgage approvals data are also due.

CHF

The franc sold off to its forex counterparts as traders priced in the results of the gold referendum on Sunday. The currency also suffered a sharp selloff at the start of this trading week since the results indicated a rejection of the proposal to keep 20% of gold in SNB holdings. SVME PMI is up for release today and a drop from 55.3 to 52.9 is eyed, which might lead to more franc weakness.

JPY

The yen resumed its slide to its counterparts towards the end of the week and gained more momentum this week. Quarterly capital spending came in stronger than anticipated at 5.5% versus 2.1% while the final manufacturing PMI stood at 52.0, a notch down from the initially reported 52.1 figure. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The fall in gold prices and oil led to a sharp decline for the commodity currencies on Friday and onto the start of this trading week. The results of the Swiss gold referendum triggered a sharp drop for gold, which led to a corresponding decline for AUD, while the OPEC decision also sparked CAD weakness. In Australia, company operating profits saw a stronger than expected 0.5% gain, which did little to support the Aussie. China reported a drop from 50.8 to 50.3 in its official manufacturing PMI, indicating a weaker expansion. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way

337

USD

The US dollar returned some of its recent gains, mostly to the pound and the Japanese yen, even as the ISM manufacturing PMI showed stronger than expected results. The figure fell from 59.0 to 58.7, higher than the estimated drop to 57.9. Remarks from FOMC officials Dudley and Fischer were crucial for dollar movement, as their cautious remarks led to a bit of weakness. For today, there are no top-tier reports lined up, but Yellen and Brainard are set to give testimonies that might once again rock the dollar.

EUR

The euro made a bit of a recovery in recent trading, as recent PMI figures came in mixed. Spain’s manufacturing PMI climbed from 52.6 to 54.7, outpacing the consensus at 52.9. Italy’s manufacturing PMI held steady at 49.0 instead of improving to the estimated 49.5 reading. The Spanish unemployment change report is up for release today and it could show a smaller increase in joblessness of 21.3K versus the previous 79.2K, which might lead to a bit of euro strength.

GBP

The pound made a decent bounce to the dollar, despite mixed data from the United Kingdom. The manufacturing PMI climbed from 53.3 to 53.5 instead of falling to the projected 53.1 figure, indicating a stronger expansion in the industry. Net lending to individuals and M4 money supply were below expectations though, while the mortgage approvals reading came in line with expectations at 59K. Construction PMI is up for release today and it could show a dip from 61.4 to 61.1.

CHF

The franc made a slight recovery to the euro and the dollar after its aggressive selloff after the Swiss referendum over the weekend. Data from Switzerland was weaker than expected, as the SVME PMI fell from 55.3 to 52.1, worse than the projected fall to 52.9. There are no major reports due from Switzerland today.

JPY

The yen was a big loser at the earlier trading sessions but managed to recover to the dollar during the New York trading hours. There were no major reports out of Japan yesterday while today had the average cash earnings report due. This showed a weaker than expected 0.5% gain versus the projected 0.8% increase while the previous reading was downgraded from 0.8% to 0.7%. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a bit of a relief in the latter trading sessions, as oil and gold prices made a bit of a rebound. Earlier today, Australia reported an 11.4% gain in building approvals, more than twice as much as the estimated 5.2% increase. The RBA decision is scheduled today and might cause a ruckus among Aussie pairs if the central bank announces major changes. The New Zealand dairy auction is also scheduled today and might have a significant effect on Kiwi movement.

By Kate Curtis from Trader’s Way

338

USD

The US dollar asserted its dominance to most of its forex counterparts, as it resumed its strong climb to the yen and franc while comdolls traded lower. There were no major reports released from the US economy, as FOMC officials were also vague with their clues on what the Fed has up its sleeve. Fed head Yellen gave a speech but didn’t comment on the Fed’s policy bias. The US ADP non-farm employment change report is up for release today and it might show a dip from 230K to 223K, although stronger than expected data could spur positive expectations for Friday’s NFP. Non-farm productivity and unit labor costs figures are also up for release.

EUR

The euro was in a weak spot once more as traders started pricing in expectations for the upcoming ECB rate statement. Euro zone PPI came in weaker than expected at a 0.4% decline instead of the projected 0.3% uptick, reminding traders that deflation is a possibility in the region. Spanish and Italian services PMI are up for release today and strong figures might lead to a quick euro bounce. Also lined up for today is the release of euro zone retail sales data, which could indicate a 0.6% rebound.

GBP

The pound resumed its selloff to the dollar when the UK construction PMI came in weaker than expected. The index slipped from 61.4 to 59.4, weaker than the projected 61.1 reading and reflective of a slower expansion in the industry. Services PMI is up for release today and this usually has a larger impact on pound movement, as the industry comprises a huge chunk of overall economic performance. The UK government is also set to publish its Autumn Forecast Statement, although this might zoom in on budget projections.

CHF

The franc weakened in recent trading, as the continued slide in gold prices weighed on the Swiss currency. There have been no reports due from Switzerland yesterday, leaving the franc as a counter currency. Today, the Swiss GDP report is due and it might show a 0.3% growth figure after staying flat in the previous quarter. Weaker than expected data might lead to more franc weakness.

JPY

The yen fell to new record lows to the dollar, as USDJPY resumed its ascent past the 119.00 mark recently. There have been no major reports released from Japan yesterday and none are due today, leaving the yen at the mercy of risk sentiment. Against other majors, it didn’t fare so terribly though, as the yen consolidated to the commodity currencies.

Commodity Currencies (AUD, NZD, CAD)

Thecomdolls resumed their weak trading in yesterday’s sessions, as the New Zealand dairy auction showed another decline in prices. This led to talks of another milk payout cut from Fonterra, which might later on take its toll on consumer spending and economic performance. The RBA decided to keep rates on hold at 2.50% as expected, leading to a bit of relief rally for the Aussie but this wasn’t sustained in the later sessions. The BOC is set to make its interest rate decision today and isn’t likely to announce major policy changes as well.

By Kate Curtis from Trader’s Way

339

USD

The US dollar regained ground to its counterparts, thanks to stronger than expected data from the US. The ISM non-manufacturing PMI climbed from 57.1 to 59.3, outpacing the consensus at 57.5. However, the ADP non-farm employment change reading showed a mere 208K increase versus the projected 223K gain and the previous 233K rise, hinting that the NFP might disappoint. Only the initial jobless claims and a speech from FOMC member Brainard are due today and these might have minimal effect on the dollar prior to NFP Friday.

EUR

The euro dropped to new lows against the dollar, as euro zone data came in mixed. Spain reported a drop in its services PMI from 55.9 to 52.7 instead of improving to the projected 56.2 figure. Italy showed a climb from 50.8 to 51.8 in its services PMI, higher than the projected 50.9 reading. The euro zone services PMI dipped from 51.3 to 51.1 instead of holding steady while retail sales marked a 0.4% increase instead of the estimated 0.6% gain. The ECB statement is scheduled today and more dovish remarks from Governor Draghi and his men might drive the shared currency lower.

GBP

The pound managed to put up a good fight in recent trading, as the UK services PMI came in stronger than expected. The report showed a climb from 56.2 to 58.6, higher than the projected improvement to 56.6. The BOE interest rate decision is scheduled today and no major announcements are expected, although any change in tone is likely to have a strong impact on pound movement.

CHF

The franc weakened to the dollar but continued to consolidate to the euro, as Swiss GDP came in stronger than expected at 0.6% versus 0.3%. No other reports are lined up from Switzerland today, leaving the franc sensitive to euro movements. Do watch out for any changes in risk sentiment which might impact the Swiss currency as well.

JPY

The yen weakened to the dollar once more, as USDJPY is closing in on the 120.00 mark. There have been no reports released from Japan yesterday and none are due today, suggesting that the move was mostly a result of dollar strength. Nevertheless, the yen remains in a weak spot compared to its forex counterparts, as traders continue to entertain the possibility of further BOJ easing.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to show weakeness to their counterparts, although the Loonie was able to show a bit of recovery. BOC Governor Poloz hinted that they might hike rates earlier than expected, as strong inflationary pressures might warrant tightening. Earlier today, Australia saw stronger than expected retail sales gains of 0.4% versus the projected 0.1% uptick while the trade balance indicated a smaller shortfall. Canadian Ivey PMI is up for release later and a climb from 51.2 to 52.7 is eyed, which might lead to more Loonie gains.

By Kate Curtis from Trader’s Way

340

USD

The US dollar extended its rallies in recent trading, pushing USDJPY to the 120.00 levels. Data from the US economy came in line with expectations, as the initial jobless claims saw a 297K increase. Traders are pricing in expectations ahead of today’s NFP release, which might indicate a faster pace of hiring growth at 231K in November versus 214K in the previous month. This could be enough to keep the jobless rate steady at 5.8% and the dollar rally intact. Weak data, on the other hand, could cast doubts on the Fed’s rate hike expectations and lead to dollar selling.

EUR

The euro enjoyed a relief rally during the ECB press conference, during which Draghi remained vague on future easing. While many expected him to deliver his usual set of dovish remarks and let the markets in on what kind of stimulus measures they plan to implement next, he said that there is a lot of data to look at and that policymakers will have to reassess next year. This was considered less dovish by many, as Draghi didn’t guarantee actual quantitative easing. German factory orders and euro zone revised GDP data are due today.

GBP

The pound continued its consolidation to most of its major counterparts, as the BOE decision barely offered any clues on monetary policy biases. Pound pairs experienced an additional dose of volatility then but stayed stuck at their current levels, as traders would rather wait for the minutes of the meeting to be released before taking any directional plays. Only the consumer inflation expectations are up for release from the UK today and this might not have a strong impact on currency movement.

CHF

The franc followed in the euro’s footsteps and rallied after ECB Governor Draghi didn’t commit to further easing. There have been no reports released from Switzerland then while today has foreign currency reserves data due. After the gold initiative referendum, it will be interesting to see whether the SNB has enough to afford an intervention in the currency market in order to keep the franc weak.

JPY

The yen resumed its tumble to the dollar but was able to hold steady against some of its forex counterparts. There have been no major reports out of Japan yesterday and today has only the leading indicators due. A dip from 105.6% to 104.2% is expected and might lead to a bit of yen weakness if the actual figure disappoints.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance to the dollar, as the Australian dollar crawled lower while the Loonie consolidated. The Kiwi was able to enjoy a strong rebound, despite the lack of data from New Zealand. The Aussie was barely able to benefit from strong retail sales and trade balance figures, as traders were still reeling over the weak GDP reading and talks of a potential RBA rate cut. Canada’s Ivey PMI was stronger than expected at 56.9 versus 52.7, reflecting a strong pickup in manufacturing expansion. For today, the Canadian jobs report might be the big mover for the Loonie pairs, as a weaker pace of hiring growth is expected. Canadian trade balance is also up for release later on.

By Kate Curtis from Trader’s Way

341

USD

The US dollar had a good run on Friday, as the non-farm payrolls report came in much stronger than expected. The economy added 321K jobs in November versus the projected 231K gain while the jobless rate held steady at 5.8%. Other labor components also showed improvements, as the average hourly earnings rate picked up by 0.4% while the participation rate held steady. There are no reports due from the US economy today as the dollar could stay supported in stronger ate hike expectations.

EUR

The euro gave up gains to the dollar but rallied against the Japanese yen last Friday, with medium-tier data from the region coming in strong. German factory orders showed a strong 2.5% gain versus the projected 0.6% uptick while the euro zone GDP was unchanged at 0.2%. Only the German industrial production report is due today and it might show a 0.2% gain.

GBP

The pound was in a weak spot on Friday as UK consumer inflation expectations sank from 2.8% to 2.5%, indicating that price pressures might slow down in the coming months. There are no major reports due from the UK today, which could leave pound pairs sensitive to risk sentiment.

CHF

The franc gave up its gains to the dollar last week, as SNB foreign currency reserves picked up from 460.6 billion CHF to 462.4 billion CHF, reviving talks of potential intervention in the currency market. So far, the data hasn’t shown any drastic franc selling but traders are sitting on the edge of their seats awaiting SNB action. Swiss CPI and retail sales figures are due today and weak data could force the central bank to act.

JPY

The yen gave up more ground to its counterparts as the revised GDP reading indicated a deeper contraction of 0.5% versus the initially reported 0.1% drop in growth. Japan’s current account was better than expected but this wasn’t enough to quash talks of further easing from the BOJ and downward pressure on the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls edged lower as the dollar exerted its dominance in the forex market last Friday. Data from Canada was weaker than expected, with the economy chalking up a 10.7K drop in hiring for November and a weaker than expected trade balance. Earlier today, Australia reported a small uptick in ANZ job advertisements, which could mean more hiring gains for the country. Canadian building permits data is up for release later today.

By Kate Curtis from Trader’s Way