Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
362

USD

Not even the lack of top-tier data or the lower liquidity during the Martin Luther King holiday was enough to stop the Greenback from moving around the charts, as traders started positioning ahead of the major events this week. There are still no major reports due from the US economy today, suggesting that risk sentiment could dominate price action in the next trading sessions.

EUR

The euro started to show a bit of weakness against some of its forex counterparts, as traders anticipate actual quantitative easing from the ECB this week. Data has been weaker than expected, with the current account balance falling short of expectations and indicating a smaller surplus. Apart from that, the previous month’s reading was downgraded. The German ZEW economic sentiment figure is up for release today and an improvement from 34.9 to 40.1 is eyed, which could support profit-taking scenarios for euro pairs for now.

GBP

The pound resumed its slide to the dollar in recent trading, despite the lack of top-tier data from the UK economy. Only the Rightmove HPI was released yesterday and it indicated a 1.4% increase in prices. There are no major reports lined up from the UK today, leaving traders to position themselves ahead of the UK jobs report and BOE minutes due tomorrow.

CHF

The franc tried to hold steady against its forex counterparts, even as the Swiss PPI showed a smaller than expected decline. The report showed a 0.4% drop, better than the estimated 0.6% decline in producer prices. For today, there are no major reports lined up from the Swiss economy.

JPY

The yen showed further weakness against its counterparts as risk appetite appeared to improve at the start of the week. Data from Japan has been in line with expectations as the revised industrial production report marked a 0.5% decline as expected while the consumer confidence reading improved from 37.7 to 38.8. There are no reports lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls got a small boost from Chinese data earlier today, as most of the figures beat expectations. The economy printed a 7.3% growth figure for Q4, slightly stronger than the anticipated 7.2% GDP reading, while retail sales picked up by an annualized 11.9%. Industrial production was stronger than expected at 7.9% versus the estimated 7.4% figure. The New Zealand dairy auction is scheduled today and another uptick in milk prices might lead to Kiwi gains. As for Canada, the manufacturing sales report is due and might show a 0.5% drop.

By Kate Curtis from Trader’s Way

363

USD

The US dollar moved mostly sideways in recent trading, although it managed to regain ground against the commodity currencies. There have been no major reports released from the US economy then, leaving the Greenback to act as a counter currency. For today, US building permits and housing starts data are up for release, with the former slated to climb from 1.05M to 1.06M and the latter likely to show an increase from 1.03M to 1.04M. Stronger than expected data could allow the dollar more upside.

EUR

The euro consolidated against most of its major counterparts, as traders hesitate to take large positions ahead of the ECB interest rate statement tomorrow. Data from the euro zone was stronger than expected yesterday, as the German ZEW economic sentiment index climbed from 34.9 to 48.4 and outpaced the consensus at 40.1. Meanwhile, the euro zone ZEW figure improved from 31.8 to 45.2, higher than the projected 37.6 figure. For today, there are no reports due from the euro zone.

GBP

The pound resumed its drop to the dollar in yesterday’s trading sessions, as the release of the BOE minutes and the UK jobs report drew nearer. There were no reports released from the UK economy then. For today, the claimant count change could indicate a 24.2K increase in hiring and a pickup from 1.4% to 1.7% in average earnings. The BOE minutes could still show a 2-7 vote in favor of keeping rates on hold and a unanimous decision to keep asset purchases unchanged.

CHF

The franc was able to recover some of its losses to the dollar while holding steady against the euro. There have been no major reports out of Switzerland yesterday while today has the ZEW economic expectations index due. An improvement from the previous -4.9 reading could allow the franc to regain a bit of ground, although traders might refrain from taking large positions ahead of the ECB decision.

JPY

The yen advanced to most of its forex counterparts, except for the Australian dollar. Today’s monetary policy statement could trigger a lot of volatility among yen pairs, although no actual changes are expected. Dovish remarks could lead to yen weakness if this leads traders to anticipate more easing moves from the central bank in the wake of lower inflationary pressures.

Commodity Currencies (AUD, NZD, CAD)

The New Zealand dairy auction showed another uptick in prices, although this wasn’t enough to support the Kiwi when the country reported a 0.2% decline in its quarterly CPI. Chinese data came in slightly stronger than expected, allowing the Australian dollar to stay afloat against some of its peers, while the Loonie continued to slide lower. The BOC will make its policy statement today and could cause large moves for Loonie pairs.

By Kate Curtis from Trader’s Way

364

USD

The US dollar had a mixed performance, as it gave up ground to the euro, franc and yen but rallied against the commodity currencies. Data from the US has also been mixed, with building permits showing a lower than expected 1.03M reading and housing starts indicating a higher than expected 1.09M figure. For today, there are no major reports due from the US, suggesting that the currency might react to risk sentiment or act as a counter currency once more.

EUR

The euro recovered slightly to most of its counterparts, with traders easing off their short positions ahead of the ECB interest rate decision today. The central bank is widely expected to announce a quantitative easing program, but the size of the bond-purchases might be crucial in determining euro price action. Any figure north of 1 trillion EUR might lead to more euro losses while a conservative amount of roughly 500 billion EUR could spark a relief rally.

GBP

The pound moved sideways in recent trading, even as the BOE minutes showed that members were more cautious this time around. There were no hawkish members voting for a rate hike since weakening inflation remained a huge concern. What kept the pound afloat was the better than expected jobs data, which revealed a 29.4K increase in hiring and a jobless rate improvement from 6.0% to 5.8%. Wage growth was also seen, with the average hourly earnings figure improving from 1.4% to 1.7%. There are no major events lined up from the UK today.

CHF

The franc recovered to the dollar and some of its counterparts in yesterday’s trading sessions, as traders booked profits off their long positions prior to today’s ECB statement. The Swiss ZEW economic expectations report indicated more weakness, as the figure fell from -4.9 to -10.8.

JPY

The yen advanced to most of its counterparts as risk aversion took hold of the financial markets and the BOJ decided to keep monetary policy unchanged. This triggered a relief rally for the Japanese currency, as some thought that the central bnak might move to counter deflation. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered a nasty selloff in recent trading, particularly for the Canadian dollar. The BOC announced a surprise interest rate cut of 0.25% as the impact of falling oil prices started to be felt in the Canadian economy, leading to lower company profits, layoffs, weak inflation, and a potential housing crash. There are no major reports lined up from the comdoll economies today, although risk aversion could keep currency gains in check.

By Kate Curtis from Trader’s Way

365

USD

The US dollar resumed its rally to most of its forex counterparts, as the EURUSD tumble carried on to other pairs. Data from the US was weaker than expected, with the initial jobless claims showing a larger than expected 307K reading versus the projected 301K figure. For today, US flash manufacturing PMI and existing home sales data are up for release.

EUR

The euro suffered a massive selloff against its counterparts when ECB Governor Draghi announced their quantitative easing program. The ECB would conduct 60 billion EUR in asset purchases each month, shouldering 20% of the risk and leaving the rest of the burden to the euro zone member nations’ central banks. For critics, this could be more damaging to the region’s solidarity while Draghi maintained that structural reforms are needed to ensure that the program would work. Euro zone PMIs are due today and weak data could worsen the shared currency’s drop.

GBP

The pound also suffered a selloff in yesterday’s trading sessions, despite the lack of major events on the UK’s schedule. The public sector net borrowing report showed a worse than expected reading of 12.5 billion GBP, higher than the projected 9.2 billion GBP deficit. UK retail sales data is due today and it might show a 0.6% drop, which might mean more pound weakness.

CHF

The franc followed in the euro’s footsteps and gave up ground to its major counterparts after the ECB announcement. There have been no releases from Switzerland then and none are due today, suggesting that the franc might take its cue from euro price action once more.

JPY

The yen packed in gains when risk aversion returned after the ECB rate statement yesterday, although the Japanese currency gave up ground to the US dollar. Earlier today, the flash manufacturing PMI report indicated a climb from 52.0 to 52.1, reflecting how the expansion in the industry picked up pace slightly. There are no other reports lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were once again in a weak spot yesterday, as risk aversion weighed on higher-yielding currencies. Weaker inflation expectations also weighed on the Australian dollar, as the MI inflation expectations reading fell from 3.4% to 3.2%. Earlier today, the HSBC flash manufacturing PMI indicated a climb from 49.6 to 49.8, reflecting a slower pace of contraction. Canadian CPI and retail sales figures are up for release today and weak data could drive the Loonie lower.

By Kate Curtis from Trader’s Way

366

USD

After the strong forex moves last week, profit-taking was seen on Friday as the US dollar gave back some of its recent gains. Data from the US was also weaker than expected, as the flash manufacturing PMI fell from 53.9 to 53.7 instead of improving to the 54.1 estimate. Existing home sales fell short of the 5.08M consensus and landed at 5.04M, which is still an improvement from the previous 4.98M reading. There are no reports due from the US today, leaving the dollar sensitive to risk flows.

EUR

The euro took a break from its slide last Friday when traders booked some profits off their short positions. Data from the euro zone then was also mixed, with a couple of bright spots in the French flash manufacturing PMI and the German services PMI. However, the Greek parliamentary election held over the weekend showed a victory for the opposition Syriza party, which means that anti-austerity efforts might make it more difficult for the country to secure its next set of aid. German Ifo business climate data is due today and a rise from 105.5 to 106.7 is eyed.

GBP

The pound consolidated against most of its major counterparts at the end of last week, as UK retail sales posted an upside surprise of a 0.4% gain versus the estimated 0.6% decline. Only the BBA mortgage approvals report is up for release today and it might not have such a lasting impact on pound price action.

CHF

The franc was still in a weak spot on Friday, even though there were no reports released from Switzerland. There are still no reports lined up for today, although the Swiss currency might draw stronger demand compared to the euro, which is facing more fundamental and political uncertainty in Greece.

JPY

The yen advanced to most of its major counterparts at the end of the week as risk-taking stayed in check. Earlier today, the BOJ released the minutes of its latest policy meeting, which revealed no surprises. No other reports are due from Japan, suggesting that the yen could move to the tune of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued its slide to most of its counterparts on Friday, as data from Canada came in mixed. Core CPI showed a 0.3% decline as expected while the headline CPI printed a worse than projected 0.7% drop. Core retail sales marked a strong 0.7% gain while the headline retail sales also impressed with a 0.4% uptick. There are no reports lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

367

USD

The US dollar regained a bit of ground against the yen but gave up some of its wins to the euro and the pound. There have been no top-tier releases from the US economy at the start of the week, which explains the Greenback’s mixed price action, although traders seem to be weighing in on the potential impact of the snowstorm in the northeast part of the country. For today, durable goods orders data are lined up, with an expected 0.6% uptick for both headline and core figures. Bear in mind that the previous readings have already been revised lower, which could mean downside risks for today’s releases. Also up for release are the CB consumer confidence and new home sales figures.

EUR

The euro recovered against most of its major counterparts, as traders booked profits off their short positions after the Greek elections. Data from the euro zone came in line with expectations, with the German Ifo business climate index improving from 105.5 to 106.7. There are no major reports up for release from the euro zone today as updates on the Greek political and debt situation might drive the shared currency.

GBP

The pound made a quick bounce to its forex rivals when a BOE official suggested that a rate hike is still possible if inflation picks up. There have been no actual reports released yesterday while today has the preliminary GDP reading due. This could show a 0.6% growth figure for Q4 2014, slightly weaker compared to the previous 0.7% expansion. Strong data could keep the pound afloat while weak figures could allow the selloff to resume.

CHF

The franc suffered a sharp selloff yesterday on rumored SNB intervention, as the Swiss currency has a lot of ground to recover after the central bank decided to scrap the currency peg the other week. There have been no reports released from Switzerland yesterday and none are due today.

JPY

The yen gave up ground to some of its counterparts, as market corrections were made and risk appetite improved slightly. Japan reported a smaller trade deficit and an upgrade in the previous period’s reading, adding support to Japanese equities. There are no major reports due from Japan today, leaving the yen sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still in a weak spot yesterday, as falling commodity prices weighed on price action. Earlier today, Australia reported a small improvement in its NAB business confidence index from 1 to 2. There are no other reports lined up from these economies for the rest of the day, leaving risk sentiment and commodity price action in the driver’s seat.

By Kate Curtis from Trader’s Way

368

USD

The US dollar gave up ground to its major counterparts in recent trading, as traders booked profits off their trades ahead of the FOMC statement today. Data from the US was mixed, with the CB consumer confidence figure improving from 93.1 to 102.9 and new home sales data showing an increase from 431K to 481K. Durable goods orders were weaker than expected. The Fed is likely to repeat its previous statement in saying that interest rates might stay low for a “considerable time” and that they “can be patient” in considering policy normalization. Hawkish remarks could drive the dollar higher while dovish comments could lead to a selloff.

EUR

The euro continued to recover against its forex rivals, as traders are waiting to see what’s next for the region. There were no reports released from the euro zone then while today has the German GfK consumer climate figure due. The reading could improve from 9.0 to 9.2, which could keep the shared currency supported.

GBP

Despite the lower than expected GDP reading for the last quarter of 2014, the pound was able to benefit from the report since it still marked the strongest annual pace of economic growth for the UK since 2007. The economy grew 0.5% during the quarter, enough to bring the annual GDP to 2.6%, the fastest among major economies. There are no reports due from the UK today.

CHF

The franc recovered against some of its forex counterparts in recent trading after traders digested the news that the SNB may have staged a small intervention in the forex market. There have been no reports released then and none are due today.

JPY

The yen moved to the tune of risk sentiment and advanced to the dollar while giving up ground to the rest of the major currencies. There have been no reports released from Japan then and none are due today, indicating that the currency could continue to take its cue from sentiment and possibly from the FOMC statement’s impact on USDJPY.

Commodity Currencies (AUD, CAD, NZD)

The comdolls stalled from their recent drop, with the Australian dollar seeing some gains after the quarterly CPI release. The report showed a 0.2% uptick, a bit lower than the estimated 0.3% increase and the previous 0.5% gain. The RBNZ is set to make its policy statement in the next Asian trading session and traders might position ahead of a dovish announcement.

By Kate Curtis from Trader’s Way

369

USD

The US dollar regained ground against its forex rivals when the FOMC sounded a little more upbeat than usual. The Fed decided to drop the “considerable time” wording completely and emphasized that they “can be patient” in looking at policy normalization. They also upgraded growth and labor forecasts, indicating that the domestic economy is doing well. For today, initial jobless claims and pending home sales data are up for release.

EUR

The euro had a mixed performance as it gained ground against the commodity currencies but weakened to the rest of its counterparts. Data from the euro zone was mixed, as the German GfK consumer climate index improved from 9.0 to 9.3 while import prices noted a worse than expected 1.7% decline. German preliminary CPI and unemployment change figures are up for release today, with weak figures likely to drive the euro lower.

GBP

The pound managed to advance against the Aussie and Kiwi but stayed in a weak spot compared to its other forex counterparts. There have been no major reports released from the UK yesterday while today only has the medium-tier CBI realized sales figure due. The reading is slated to drop from 61 to 31, which could mean more pound selling.

CHF

The franc took its cue from the euro and weakened slightly, albeit at a slower pace. The UBS consumption indicator marked an improvement from 1.29 to 1.42, which was positive for the franc. There are no reports lined up from Switzerland today, which suggests that euro behavior or risk sentiment could drive franc movements.

JPY

The yen advanced to most of its counterparts as risk aversion extended its stay in the forex market. Earlier today, the retail sales report indicated a weaker than expected 0.2% gain versus the projected 1.1% increase and the previous 0.5% uptick. There are no other reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi suffered a sharp selloff in the early Asian trading session when the RBNZ decided to drop its hawkish stance and indicate that their next move could either be a rate hike or a rate cut. Wheeler also emphasized that the currency exchange rate was unjustified and unsustainable, citing that he’d like to see further significant depreciation. New Zealand trade balance was also weaker than expected, as the deficit stood at 159 million NZD. In Australia, quarterly import prices saw a 0.9% gain versus the estimated 1.5% rebound.

By Kate Curtis from Trader’s Way

370

USD

The US dollar was able to advance against most of its forex counterparts when risk aversion extended its stay in the currency market. Traders are also increasing their long dollar bets after the FOMC retained its hawkish bias earlier this week. Data from the US economy was mixed, as the initial jobless claims showed a better than expected 265K reading versus the projected 301K figure while the pending home sales report marked a 3.7% decline. For today, the US advanced GDP reading is due and another strong figure might lead to more gains for the dollar. Analysts are expecting to see a 3.0% growth figure for Q4.

EUR

The euro recovered slightly in recent trading, despite weaker than expected data from Germany. The preliminary CPI showed a 1.0% decline instead of the projected 0.8% drop while the unemployment change report showed a mere 9K drop in joblessness. Apart from that, the previous month’s reading was downgraded to show a smaller decline in unemployment. German retail sales and French consumer spending figures are up for release today, with the former likely to show a 0.4% gain and the latter to print a 0.3% uptick. Also up for release are the Spanish flash GDP and CPI figures, along with the euro zone CPI flash estimates.

GBP

The pound suffered a selloff in recent trading even though the UK printed stronger than expected data. CBI realized sales fell from 61 to 39, stronger than the estimated 31 figure, while the Nationwide HPI showed a 0.3% uptick as expected. Earlier today, the UK GfK consumer confidence figure also surprised to the upside with an improvement from -4 to 1, higher than the projected -2 reading. UK net lending to individuals and mortgage approvals are up for release today.

CHF

The franc was still under selling pressure yesterday, as the rumored SNB intervention continued to weigh on the currency. There have been no reports released from Switzerland yesterday while today has the KOF economic barometer due. This could fall from 98.7 to 94.8, showing a weaker economic assessment and outlook.

JPY

The yen let go of its recent wins as inflation and spending reports from Japan fell short of expectations. The national core CPI fell from 2.7% to 2.5%, lower than the projected drop to 2.6%, while the Tokyo core CPI logged in its sixth consecutive monthly decline. Household spending slumped 3.4% instead of posting a mere 2.3% drop, as inflation-adjusted wages marked its 17th consecutive monthly decline. Data on housing starts is still up for release and a 14.6% decline is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had another round of selling in yesterday’s trading as risk aversion weighed on equities and higher-yielding currencies. Data from New Zealand showed further weakness, as visitor arrivals fell 1.3% and building permits showed a 2.3% drop. Later today, Canada will release its monthly GDP reading and possibly show a 0.1% decline.

By Kate Curtis from Trader’s Way

371

USD

The US dollar returned some of its recent gains last Friday when the US advanced GDP reading came in below expectations. The economy showed a 2.6% growth figure for Q4 2014, lower than the projected 3.0% expansion and the previous 5.0% GDP. Chicago PMI, however, surprised to the upside with a gain to 59.4 and allowed the dollar to regain ground. For today, the Fed’s preferred measure of inflation or the core PCE price index is up for release, along with the ISM manufacturing PMI. Personal spending and income reports are also due, with strong figures likely to renew support for the Greenback.

EUR

The euro managed a quick recovery on Friday, as data from the euro zone came in mixed. The headline CPI flash estimate came in at -0.6%, lower than the projected -0.5% figure and the previous -0.2% reading, while the unemployment rate improved from 11.5% to 11.4%. Spanish flash CPI and GDP also came in stronger than expected yet German retail sales fell short with a bleak 0.2% gain. Spanish unemployment change and manufacturing PMI could move euro pairs around today, along with the region’s final PMI reading.

GBP

The pound moved sideways on Friday, as the lack of top-tier data from the UK kept the currency’s gains in check. Net lending to individuals was weaker than expected at 2.2 billion GBP versus the projected 3.1 billion GBP figure. UK manufacturing PMI is up for release today and an improvement from 52.5 to 52.9 is eyed. Strong data could allow the pound to extend its gains while weak figures could lead to more losses.

CHF

The franc continued to edge lower to the dollar and the euro on Friday, as traders priced in the possibility of seeing more currency intervention from the SNB. Data from Switzerland was better than expected though, as the KOF economic barometer printed a 97.0 reading versus the projected 94.8 figure. However, this was lower compared to the previous 98.8 reading. The Swiss manufacturing PMI is up for release today and a climb from 54.0 to 54.5 is expected.

JPY

The yen continued to advance against most of its currency counterparts last week as risk aversion stayed in the financial markets. Data from Japan was weaker than expected, with household spending marking a large 3.4% decline and the national core CPI falling from 2.7% to 2.5%. There are no major reports due from Japan today, indicating that risk sentiment could continue to direct yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still weakening on Friday, after Canada posted a 0.2% economic contraction for December. Over the weekend, China’s official manufacturing PMI indicated a drop from 50.1 to 49.8, reflecting industry contraction and weaker demand for Australia’s raw material exports. The HSBC version of the report indicated a drop from 49.8 to 49.7. No other reports are lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

372

USD

The US dollar had a mixed performance in recent trading, as traders are hesitating to take huge positions ahead of the top-tier releases this week. Data from the US was mostly weaker than expected, as the ISM manufacturing PMI fell from 55.5 to 53.5 in January while personal spending showed a surprise 0.3% decline. The core PCE price index stayed flat as expected, confirming the Fed’s decision to sit on its hands for now until inflation picks up. Only the US factory orders report is up for release today.

EUR

The euro was stuck in consolidation against most of its counterparts in the absence of top-tier reports from the euro zone. Spanish and Italian manufacturing PMI came in stronger than expected while the region’s reading showed a 51.0 figure as expected. The Spanish unemployment change figure is up for release today and an increase of 83.4K in joblessness is expected.

GBP

The pound seemed to be in a weak spot in yesterday’s trading sessions, as it edged lower to the dollar and yen. UK manufacturing PMI came in slightly better than expected at 53.0 versus the projected 52.9 figure. The construction PMI is up for release today and it might show a drop from 57.6 to 56.9, reflecting a slower expansion in the industry.

CHF

The franc edged lower to its counterparts yesterday when the Swiss manufacturing PMI came in below expectations. The reading tumbled from 54.0 to 48.2 instead of improving to the estimated 54.2 figure, indicating that the industry contracted during the period. Swiss trade balance is up for release today and a smaller deficit is eyed.

JPY

The Japanese yen gave up some of its recent gains when traders booked profits in recent trading. There were no major reports released from Japan then and there are none due today, indicating that risk sentiment could drive yen price action moving forward.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a bit of recovery to the dollar and yen in recent trading as risk appetite appeared to improve. Data from China was weak though, as the official manufacturing and non-manufacturing PMI indicated a slowdown. Earlier today, Australia printed a stronger than expected building approvals report and a smaller than expected trade deficit. The New Zealand dairy auction is scheduled later today and might cause price swings for the Kiwi.

By Kate Curtis from Trader’s Way

373

USD

The US dollar was in for a selloff yesterday when risk appetite picked up and traders dumped the safe-haven currency. Data from the US economy was weaker than expected, as factory orders marked a 3.4% decline versus the projected 1.8% drop while the previous month’s reading was downgraded to show a 1.7% decline. The ADP non-farm employment change report is up for release today and it might provide a preview for Friday’s NFP release. The report is expected to show a 224K gain in hiring, slightly weaker compared to the previous 241K increase. Also lined up today is the ISM non-manufacturing PMI, which might improve from 56.2 to 56.6.

EUR

The euro recovered to the dollar and the yen in yesterday’s trading sessions, as risk sentiment improved. Data from the euro zone was better than expected, as Spain reported a smaller increase in joblessness of 78.0K versus the projected 83.4K. For today, the Spanish and Italian services PMI readings are due, along with the region’s services PMI. Euro zone retail sales data is also up for release and a 0.1% drop is eyed.

GBP

The pound bounced back in recent trading when the UK construction PMI beat expectations. The report showed a climb from 57.6 to 59.1, reflecting a faster pace of industry expansion. The services PMI is up for release today and it might have a stronger impact on pound movement, as the sector contributes a huge chunk to overall economic growth. The reading is slated to climb from 55.8 to 56.6 and a stronger than expected report might lead to more pound gains.

CHF

The franc consolidated to the dollar and was barely able to take advantage of the profit-taking that occurred among most dollar pairs when the Swiss trade balance fell short of estimates. The surplus narrowed from a downgraded 3.80 billion CHF to 1.52 billion CHF, smaller than the estimated 2.17 billion CHF figure. There are no reports due from Switzerland today.

JPY

The yen gave up a lot of ground to its forex rivals when risk appetite picked up. There have been no reports released from Japan yesterday and none are due today, indicating that risk sentiment might continue to drive forex price action among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to breathe a sigh of relief when risk appetite took over the markets and spurred strong gains. Data from New Zealand was better than expected, as the employment change figure indicated a 1.2% quarterly gain in hiring. The jobless rate climbed from 5.4% to 5.7% but this was spurred by an improvement in the participation rate. The dairy auction also printed strong results, as prices climbed by 9.4%. Canada’s Ivey PMI is up for release today and a drop from 55.4 to 53.8 is expected.

By Kate Curtis from Trader’s Way

374

USD

The US dollar had a mixed performance as it regained ground to the euro but consolidated to the yen and franc. Data from the US was mostly weaker than expected, as the ADP non-farm employment change showed a 213K increase, short of the estimated 224K gain and the previous 253K rise. This sets the tone for a potential disappointment during the NFP release on Friday, which could drive the dollar lower against its forex counterparts until then. Initial jobless claims and trade balance are up for release today.

EUR

The euro gave up ground to most of its forex counterparts, despite stronger than expected medium-tier data. The Spanish, Italian, and euro zone services PMI all exceeded expectations while the region’s retail sales report indicated an upside surprise of 0.3% versus the projected 0.1% decline. For today, German factory orders data is up for release and it is expected to show a 1.4% rebound from the previous 2.4% decline.

GBP

The pound was able to strengthen in recent trading, thanks to better than expected UK services PMI. The reading improved from 55.8 to 57.2, indicating a pickup in industry expansion. The BOE interest rate statement is scheduled for today and a dovish outlook is expected, although a more confident assessment might lead to more pound gains.

CHF

The franc moved mostly sideways in recent trading, as there were no major reports released from Switzerland yesterday. There are still no top-tier reports lined up for today, indicating that the Swissy might function more as a counter currency or react more to risk sentiment.

JPY

The yen advanced to its forex counterparts when risk aversion popped its head back in the financial markets. There have been no reports released from Japan yesterday and none are due today, indicating that risk sentiment might drive price action among yen pairs today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were once again in a weak spot, as Australia and Canada printed downbeat reports. Canada’s Ivey PMI slipped to contractionary territory, as the reading tumbled from 55.4 to 45.4. Earlier today, Australia printed a mere 0.2% uptick in retail sales, short of the projected 0.3% gain. Canada’s trade balance is up for release today and a larger deficit of 1.2 billion CAD is eyed.

By Kate Curtis from Trader’s Way

375

USD

The US dollar once again returned its recent gains as traders booked profits off their dollar longs prior to today’s NFP release. Data from the US was mixed, as the trade balance came in short of expectations while initial jobless claims posted better than expected results. Preliminary non-farm productivity and unit labor costs also came in better than expected. The NFP reading is slated to show a 236K gain in hiring, weaker compared to the previous 252K increase, while the jobless rate could hold steady at 5.6%.

EUR

The euro took the opportunity to regain ground against the dollar and the yen in recent trading, as data from Germany came in strong. Factory orders surged by 4.2% instead of showing a mere 1.4% rebound, indicating that business conditions are looking strong. German industrial production and French trade balance are up for release today, although EURUSD might stay in range ahead of the NFP.

GBP

The pound also recovered against most of its forex counterparts when the BOE decided to keep monetary policy unchanged. Traders were relieved to find out that the central bank didn’t adopt a more dovish tone like other central banks such as the RBA or BOC, but many are still waiting for the minutes of the meeting to be released later on. UK trade balance is up for release today and a wider deficit is eyed.

CHF

The franc gained a bit of ground recently when the Swiss SECO consumer climate reading indicated an improvement from -11 to -6 instead of falling to -13. For today, Swiss foreign currency reserves and retail sales data are due. Consumer spending could see a 0.4% annualized gain while a large increase foreign currency reserves could reflect central bank intervention in the forex market, which might drive the franc lower.

JPY

The yen lagged behind its counterparts in recent trading when risk appetite picked up once more. There have been no major reports released from Japan then and none are due today, suggesting that yen pairs could be driven by market sentiment and could take their cue from USDJPY price action.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies were able to take advantage of the pickup in risk sentiment, although data came in mixed. Australia reported a lower than expected uptick in retail sales of 0.2% versus the projected 0.3% gain while Canada showed a stronger than expected trade balance. For today, Canadian jobs data is due and a 4.7K increase in hiring is expected. Canadian building permits are also up for release.

By Kate Curtis from Trader’s Way

376

USD

The US dollar staged a strong rally on Friday, as the latest NFP report came in much stronger than expected. The economy added 257K jobs for January, higher than the projected 236K increase. On top of that, the previous reports were also upgraded, amounting to around 150K additional hiring gains. The jobless rate ticked up from 5.6% to 5.7%, spurred by a stronger participation rate. Wage growth was also seen, as average hourly earnings ticked up by 0.5% in January. There are no major reports up for release from the US economy today, suggesting that the upbeat jobs figures could continue to keep the dollar supported.

EUR

The euro was once again in a weak spot, as medium-tier data came in weaker than expected on Friday. German industrial production picked up by only 0.1% instead of showing the estimated 0.4% gain while the French trade balance showed a wider deficit. The German trade balance is up for release today, along with the euro zone Sentix investor confidence report.

GBP

The pound gave back some of its recent gains to the dollar when the UK trade balance came in weaker than expected. The report showed a deficit of 10.2 billion GBP versus the projected 9.0 billion GBP shortfall while the previous reading was downgraded. There are no reports due from the UK today, which means that risk sentiment might drive pound price action.

CHF

The franc managed to hold its ground last Friday, as the Swiss retail sales report surprised to the upside. The report printed a 2.2% annualized gain versus the projected 0.4% uptick while the previous figure was upgraded to show a smaller decline. There are no reports lined up from Switzerland today.

JPY

The yen gave back some of its recent wins, as yen pairs took their cue from the strong rally in USDJPY. Data from Japan was upbeat, as the leading indicators reading improved from 103.9% to 105.2%. Earlier today, the current account balance came in slightly above expectations and printed a 0.98 trillion JPY surplus. No other reports are due from Japan, which means that yen pairs might be driven by market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave back some of their recent gains to the dollar, as higher-yielding US equities also retreated. Canada’s headline jobs figures came in stronger than expected, as the employment change showed a 35.4K gain while the unemployment rate held steady at 6.6%. However, underlying figures show more weakness and significant downward revisions to previous releases. Earlier today, Australia reported a 1.3% gain in ANZ job advertisements, weaker compared to the previous 1.8% gain.

By Kate Curtis from Trader’s Way

377

USD

The US dollar was off to a shaky start on Monday’s trading but soon regained ground to its forex rivals during the latter sessions. There have been no top-tier reports released yesterday while today has only a few low-impact ones on tap. The JOLTS job openings, which is a leading indicator of hiring gains, is up for release and it might show an increase from 4.97M to 5.03M. Risk sentiment could be a key driver of price action in today’s trading sessions.

EUR

The euro continued to edge lower against its forex counterparts even though data from the region came in better than expected. The German trade balance showed a larger surplus of 21.8 billion EUR versus the projected 18.2 billion EUR while the euro zone Sentix investor confidence report marked a gain from 0.9 to 12.4, outpacing the consensus at 3.4. For today, French and Italian industrial production numbers are due.

GBP

The pound retreated to the dollar and yen after its recent rallies, as there were no reports to give the currency a boost yesterday. Today has the UK manufacturing production data on tap and this might indicate a 0.3% increase. The NIESR GDP estimate is also lined up and a strong reading could renew pound strength.

CHF

The franc consolidated mostly in the past few hours since there were no catalysts from Switzerland. The CPI reading is up for release today and another decline is expected. Analysts are projecting a 0.4% drop in consumer price levels, following the previous 0.5% decline. Weaker than expected data could lead to more losses for the franc.

JPY

The yen had a mixed performance as it gave up ground to the comdolls but strengthened against the European currencies. Current account balance and bank lending data came in line with expectations while the release of the tertiary industry activity index today showed weaker than expected results. The reading marked a 0.3% decline versus the projected 0.1% uptick, which could put selling pressure on the Japanese yen for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold on to their recent gains as commodity prices continued to climb in recent trading sessions. Earlier today, Australia’s NAB business confidence report showed a climb from 2 to 3, indicating stronger optimism. However, China just printed weaker than expected inflation figures, as the CPI showed a mere 0.8% increase compared to the previous 1.5% gain while the PPI printed a massive 4.7% loss. No other reports are lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

378

Yeah, defo watching the ‘Lippies’. Thanks Curts. G

379

USD

The US dollar had a mixed performance in recent trading, as the lack of top-tier reports from the economy kept it as a counter currency. There are still no major reports lined up from the US economy today, which suggests that risk aversion might be responsible for driving the dollar’s price action in the next trading sessions.

EUR

The euro managed to hold its ground against the dollar and yen in yesterday’s trading sessions but gave up some of its recent gains to the commodity currencies. Talks of a Greek exit from the euro zone have been dominating the headlines but it appears that traders have already priced in this possibility a long while back. Data from the euro zone turned out stronger than expected, as Italy and France both printed upbeat industrial production reports. For today, there are no major reports lined up from the euro zone.

GBP

The pound was mostly stuck in consolidation to the dollar but was able to advance against the Japanese yen, despite weaker than expected manufacturing production data from the UK. There are no reports lined up from the UK today, which means that the pound could be in for a bit of consolidation ahead of tomorrow’s BOE Inflation Report.

CHF

The franc continued its tight consolidation against its peers, as market watchers are waiting for stronger catalysts or directional signals from Switzerland. The Swiss jobless rate came in better than expected, as the reading improved to 3.1%, while its CPI reading came in line with expectations of a 0.4% drop. There are no reports due from Switzerland today.

JPY

The yen lost ground as risk appetite improved in yesterday’s trading sessions, spurred mostly by the ongoing rebound in commodity prices. Data from Japan was also weaker than expected, with the tertiary industry activity index marking a 0.3% decline versus the projected 0.1% uptick. Japanese banks are on holiday today, which suggests that yen pairs could be driven by market sentiment once more.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued their ascent as they benefitted from the rebound in commodity prices these days. Not even the weak inflation figures from China, which indicated a fall in the annual CPI from 1.5% to 0.8% and a sharp decline in PPI, were enough to keep the Aussie’s gains in check. Earlier today, Australia reported an 8.0% jump in Westpac consumer sentiment, giving the Aussie another boost. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way

380

USD

The US dollar regained ground against its major counterparts when risk aversion popped its head back in the financial markets. Talks of a Greek exit have somehow weighed on sentiment, favoring the lower-yielding dollar. There were no major reports released from the US economy yesterday while today has the retail sales figures on tap. The headline figure could show a 0.4% decline while the core figure might also indicate a 0.4% drop, although an upside surprise is possible since jobs data have been strong.

EUR

The euro remained weak against its forex rivals as the lack of progress on the Greek debt deal weighed on the currency. There have been no reports released from the euro zone yesterday while today has the German final CPI and euro zone industrial production data due. Stronger than expected figures could give the shared currency a chance to recover yet market watchers are likely to stay focused on the Greek debt situation.

GBP

The pound gave back some of its recent gains, as traders booked profits ahead of today’s BOE inflation report. There were no reports released from the UK yesterday. BOE Governor Carney is expected to stay upbeat despite the recent fall in inflation and reiterate that this could lead to stronger consumer spending. Hawkish remarks could lead to more gains for the pound while a more cautious outlook could lead to a selloff.

CHF

The franc continued to move sideways, waiting for a stronger catalyst to push it in a particular direction. There were no reports released from Switzerland yesterday and none are due today, suggesting that the consolidation could continue unless its counterparts have a strong catalyst.

JPY

The Japanese yen managed to regain ground despite the lack of liquidity in the markets yesterday. There were no reports released then since Japanese banks were closed for the holiday while today’s schedule is also empty, hinting that yen pairs could move in accordance with risk flows.

Commodity Currencies (AUD, NZD, CAD)

The comdolls once again weakened across the board, especially after Australia printed a weaker than expected employment report earlier today. The economy lost 12.2K jobs in January, worse than the projected 4.7K drop. This brought the jobless rate up from 6.1% to 6.4%, which is its highest level in a decade, and led to stronger expectations of a rate cut in their upcoming rate statements. There are no other major reports lined up from these economies today.

By Kate Curtis from Trader’s Way

381

USD

The US dollar gave up a lot of ground when the economy saw weaker than expected retail sales figures for January, casting doubts on the Fed’s projected rate hike for the year. Core retail sales fell by 0.9% versus the projected 0.4% drop while headline retail sales marked a 0.8% decline instead of the estimated 0.4% tumble. Initial jobless claims was also worse than expected at 304K, higher than the estimated 282K figure. US preliminary consumer sentiment data is up for release today.

EUR

The euro managed to take advantage of dollar weakness in recent trading even though data from the region missed expectations. The German final CPI reading was downgraded from -1.0% to -1.1% while euro zone industrial production stayed flat instead of posting the estimated 0.3% uptick.

GBP

The pound was one of the big winners in yesterday’s sessions as the BOE Inflation Report hearings contained hawkish remarks. Although the central bank admitted that the UK could see negative inflation in a few months and indicated that they’re open to cutting rates if needed, Carney also clarified that lower price levels have been supporting the already robust domestic growth. He added that their next likely move will still be a rate hike, as he also upgraded growth figures for the next two years.

CHF

The franc showed a bit of volatility but was still moving slowly against the dollar and the rest of its forex rivals in recent trading, thanks to the lack of top-tier data from Switzerland. Swiss PPI is due today and a 0.6% decline is eyed to follow the previous 0.4% drop in producer prices.

JPY

The yen was also hit by the wave of risk appetite in the financial markets, as the currency returned some of its recent gains to its counterparts. It managed to advance against the US dollar though, as Japan printed a few strong figures. Core machinery orders marked a higher than expected 8.3% increase versus the projected 2.4% gain while preliminary machine tool orders also saw a strong 20.4% increase. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie managed to recover from its selloff after the weak jobs report release, as the currency took advantage of the return in risk appetite. The economy actually lost 12.2K jobs in January versus the projected 4.7K drop, bringing the jobless rate to 6.4%. Canadian manufacturing sales data is due today and a 0.8% rebound is expected.

By Kate Curtis from Trader’s Way