Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
382

USD

The US dollar lost a lot of ground on Friday when risk appetite surged on the heels of improving geopolitical situations. Data from the US economy was weaker than expected, as the preliminary consumer sentiment index from the University of Michigan fell from 98.1 to 93.6. US banks are on holiday today, which suggests lower liquidity during the New York trading session.

EUR

The euro managed to chalk up a few gains against the dollar but was still in a weak spot overall, as Greek debt negotiations failed to bear fruit. Officials are set to meet again this week and the lack of progress might mean more euro weakness. Data from the euro zone was mostly stronger than expected last Friday, with the region’s preliminary GDP reading showing 0.3% growth. There are no reports lined up from the euro zone today, leaving the Greek debt talks as the major catalyst for euro movements.

GBP

The pound continued its ascent last week, buoyed by the upbeat sentiment during the BOE Inflation Report. Data from the UK was actually weaker than expected, as construction output posted a mere 0.4% monthly uptick instead of the estimated 2.6% gain. Earlier today, the Rightmove HPI indicated a 2.1% increase in house prices, stronger than the previous 1.4% increase.

CHF

Traders still seem to be refraining from trading the franc, afraid that sudden announcements from the SNB might lead to unprecedented moves once more. It appears that the margin restrictions among franc pairs has also translated to lower volatility and volumes for the currency. There are no reports due from Switzerland today.

JPY

The yen advanced to the dollar but consolidated against most of its other counterparts as risk appetite persisted towards the end of the week. The currency gapped down over the weekend as traders probably booked profits ahead of this week’s key events. Earlier today, the Japanese GDP report showed a weaker than expected 0.6% expansion versus the projected 0.9% growth figure. No other reports are due from Japan but traders might be pricing in expectations for the BOJ statement on Wednesday.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to stay strong and supported by the pickup in risk appetite recently. Over the weekend, New Zealand reported stronger than expected quarterly retail sales data, adding to the Kiwi’s strength. Headline retail sales saw 1.7% growth versus the projected 1.3% increase while core retail sales advanced by 1.5%, higher than the estimated 1.1% gain. No other reports are due from the comdolls today.

By Kate Curtis from Trader’s Way

383

USD

The US dollar regained ground when risk aversion returned to the financial markets after the Greek debt talks failed to produce a deal. There have been no reports released from the US then, as banks were on a President’s Day holiday. There are still no major reports lined up from the US economy today, leaving traders to price in their expectations for the FOMC minutes later this week.

EUR

The euro suffered another round of losses to its forex counterparts when the Greek debt negotiations led to an ultimatum from the EU. Greek Finance Minister Varoufakis and his men have until Friday to agree to extend the current bailout program, which would mean more austerity measures for the country, or to risk defaulting on its debt. Talks of a “Grexit” have popped up once more, leading some to speculate that other debt-ridden nations might suffer the same fate. Data due from the euro zone today include the German ZEW economic sentiment figures but updates on the Greek debt situation might play a bigger role in euro movements.

GBP

The pound managed to hold its ground despite the downturn in risk-taking yesterday, as traders seem to be expecting more upbeat remarks in the upcoming release of the BOE minutes. UK CPI figures are due today and the headline figure might indicate another drop from 0.5% to 0.3%, which might lead to a bit of currency weakness. The core figure is slated to hold steady at 1.3%.

CHF

The franc continued to move in its tight ranges, as traders have been refraining from trading the currency in the aftermath of the SNB shocker more than a month ago. There have been no reports released from Switzerland yesterday while today has SNB head Thomas Jordan’s testimony on tap. Any significant announcements might lead to more volatility among franc pairs.

JPY

The yen regained ground on risk aversion, even as Japan printed a weaker than expected GDP reading on Monday. Traders might brace themselves for a downbeat BOJ statement tomorrow, which could mean a bit of profit-taking for yen pairs later on today. There are no reports lined up from Japan, suggesting that risk sentiment might also drive the yen around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to hold on to some of their gains even as risk appetite weakened on Monday. The New Zealand dollar chalked up a strong advance, as the country’s retail sales readings came in stronger than expected for Q4 2014. The dairy auction is set to take place within the day and another strong increase in prices could allow the Kiwi to extend its gains.

By Kate Curtis from Trader’s Way

384

USD

The US dollar returned some of its recent gains as traders booked profits ahead of the Chinese New Year holidays. Data from the US came in weaker than expected yesterday, with the Empire State manufacturing index falling from 10.0 to 7.8, worse than the estimated drop to 8.9. The NAHB housing market index also saw a decline from 57 to 55 instead of improving to the projected 58 reading. Up ahead, US building permits and PPI figures are due, along with the industrial production and capacity utilization data. The bigger mover for the dollar, however, might be the FOMC minutes release much later on. The Fed statement was more hawkish than usual, which suggests that officials might have a positive assessment and outlook for the economy.

EUR

The euro struggled to hold its ground in recent trading as the new Greek government appear to be showing no signs of backing down from their refusal to extend their bailout. They have been given an ultimatum by the EU to carry on with the bailout by Friday or risk defaulting on its debt and possibly exiting the euro zone. There are no major reports lined up from the euro zone today, leaving traders to focus on the developments in Greece.

GBP

The pound suffered a bit of weakness after its recent rallies as traders saw mixed inflation readings. As expected, the headline CPI fell from 0.5% to 0.3% but the core CPI managed to show a gain from 1.3% to 1.4%. Underlying inflation figures such as the PPI and RPI came in short of expectations, hinting that further weakness in price pressures are likely. Up ahead, the BOE minutes and the UK claimant count change are up for release, which could mean more pound volatility. Hawkish remarks and an upbeat jobs report could mean more gains for the UK currency, as the claimant count could indicate a 25.2K drop in joblessness.

CHF

The franc showed a bit more action in the past few hours after SNB head Thomas Jordan reiterated that they might take action if a Grexit takes place and results to massive euro declines. Swiss ZEW economic expectations is up for release today and an improved reading might support the franc.

JPY

The yen gave up ground in recent trading, as traders priced in the possibility of seeing further easing from the BOJ or at least hearing dovish remarks. Data from Japan has been weakening, which might mean that the central bank needs to do more to shore up inflation and growth.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to advance against most of their counterparts, thanks to a pickup in commodity prices. In New Zealand, the dairy auction marked another strong increase of 10.1% and led to more Kiwi gains. Canada’s wholesale sales report is up for release later on while New Zealand will report its quarterly PPI figures in the next Asian session.

By Kate Curtis from Trader’s Way

385

USD

The US dollar had a sharp selloff after the minutes of the latest FOMC meeting were released. As it turns out, the report was less hawkish than expected, as some policymakers expressed concerns about hiking rates too soon. The minutes also indicated that the Fed is worried about external risks stemming from the downturn in China, the financial uncertainty in Greece, and the tensions in the Middle East and Ukraine. Data from the US was also mostly weaker than expected, as PPI figures and data on building permits missed expectations. The US Philly Fed index is up for release today and an improvement from 6.3 to 8.8 is expected.

EUR

The euro managed to advance against the dollar but it was still in a weak spot compared to its other currency counterparts. Rumors that the Greek government would pursue a 6-month loan extension lifted the shared currency for a while but the EU said that no proposal has been passed. Only medium-tier reports are due from the euro zone today, leaving market participants to focus on the ECB meeting minutes and any developments on the Greek debt situation.

GBP

The pound managed to extend its recent gains when the UK posted another set of stronger than expected jobs data. Claimant count dropped by 38.6K in January, better than the estimated 25.2K drop in joblessness. This pushed the jobless rate down from 5.8% to 5.7% while average earnings improved from 1.8% to 2.1%. Meanwhile, the BOE minutes revealed a unanimous vote to keep interest rates and asset purchases unchanged. Only the CBI industrial orders expectations report is up for release today.

CHF

The franc saw a bit of action against the dollar while continuing to move gradually lower against the euro and the pound. Swiss ZEW economic expectations tumbled from -10.8 to -73.0, indicating that pessimism has worsened. The Swiss trade balance is up for release today and a smaller surplus is eyed.

JPY

The Japanese yen advanced against most of its major counterparts when the BOJ refrained from announcing any monetary policy changes. Governor Kuroda even upgraded their assessment and outlook for exports and output, reminding market participants that the Japanese economy continues to recover. Earlier today, Japan’s trade balance marked a smaller than expected deficit.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up small gains to the dollar in recent trading but the Kiwi erased some of its wins when the PPI figures came in mixed. Producer input prices showed a worse than expected 0.4% drop while output prices marked a smaller than expected 0.1% decline. There are no reports lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

386

USD

The US dollar regained a bit of ground in yesterday’s trading sessions, as risk aversion extended its stay in the markets. Data from the US economy was mixed, as initial jobless claims came in better than expected while the Philly Fed index showed a decline from 6.3 to 5.2 instead of improving to the estimated 8.8 reading. Only the US flash manufacturing PMI is up for release today and the figure is slated to fall from 53.9 to 53.7.

EUR

The euro continued to consolidate against most of its major counterparts, with a slight bias to the downside as rumors that Germany rejected Greece’s latest proposal hit the airwaves. The ECB meeting minutes barely contained any surprises, as it simply showed that most officials favored an increase in stimulus. Euro zone PMIs are up for release and a few improvements are expected, but any updates on the Greek debt talks might have a bigger role in euro price action.

GBP

The pound returned some of its recent wins, after traders booked profits on their long trades after the UK jobs report release earlier in the week. CBI industrial orders expectations data came in stronger than expected, as the index improved from 4 to 10, higher than the projected reading at 7. UK retail sales and public sector net borrowing data are up for release today and it will be interesting to see if the downturn in inflation is actually translating to stronger spending as Carney suggested.

CHF

The franc edged lower to its forex counterparts despite stronger than expected trade balance figures from Switzerland. SNB head Thomas Jordan’s remarks on stepping up their intervention efforts in case the euro tumbles on a Greek exit seem to have weighed on the Swiss currency lately. There are no reports due from Switzerland today.

JPY

The yen had a mixed performance, as it advanced to the euro and the dollar but weakened against the commodity currencies. Japan’s trade balance came in stronger than expected and showed a smaller shortfall, with exports marking a record 17% gain. Earlier today, Japan’s flash manufacturing PMI came in weaker than expected, as it fell from 52.2 to 51.5 instead of improving to 52.6.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and the Kiwi posted a few gains in recent trading while the Loonie slid lower to the US dollar. Canada is set to print its retail sales data later on and possibly show a 0.3% decline in core consumer spending and a 0.7% drop in headline retail sales. No other reports are lined up from the comdoll economies for the rest of the day.

By Kate Curtis from Trader’s Way

387

USD

The US dollar gave up a bit of ground on Friday when risk sentiment picked up on the heels of a last-minute compromise between Greek officials and its EU creditors. Data from the US economy was better than expected, as the flash manufacturing PMI climbed from 53.9 to 54.3 in February, higher than the estimated 53.7 reading. Only the existing home sales report is up for release today and a drop from 5.04M to 5.03M is eyed.

EUR

The euro had a volatile Friday when traders sat tight ahead of the outcome of the Greek debt talks. Fortunately for the shared currency, a last-minute agreement was made, allowing the country to stay in the euro zone and propose economic reforms. Euro zone PMI readings came in mixed, as manufacturing indices from both France and Germany missed forecasts while services PMI readings came in strong. Only the German Ifo business climate is due today and an improvement from 106.7 to 107.4 is expected, although traders might keep closer tabs on further Greek debt talks.

GBP

The pound managed to regain ground as risk appetite improved at the end of the trading week. Data from the UK was weaker than expected, as retail sales marked a 0.3% decline, worse than the projected 0.1% drop. To top it off, the previous report was downgraded to show a mere 0.2% uptick. Only the CBI realized sales report is scheduled for today and a climb fro 39 to 42 is expected.

CHF

The franc managed to show a bit more volatility on Friday, as the Swiss currency took its cue from euro movements. There have been no reports released from Switzerland then and none are due today, indicating that the franc might continue to move to the tune of risk aversion or euro zone updates.

JPY

The yen gave up some of its recent wins when risk appetite picked up at the end of the trading week. Japan’s flash manufacturing PMI came in weaker than expected, with the reading dropping from 49.2 to 47.7 instead of improving to 49.7 in February. There are no reports lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to draw support from the pickup in risk-taking last Friday, although the Loonie gave up its gains when the Canadian retail sales report was released. This indicated a worse than expected 2.3% drop in core consumer spending and a larger than expected 2.0% decline in headline retail sales. There are no reports lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

388

USD

The US dollar regained ground on risk aversion in yesterday’s trading sessions, as there have been no positive updates on the Greek debt negotiations so far. Although a four-month extension has been granted, EU officials have yet to approve the latest list of reforms passed by the Greek government and these are due today. Data from the US was weaker than expected yesterday, as the existing home sales figure fell from 5.07M to 4.82M. Today, the CB consumer confidence index is due and a drop from 102.9 to 99.6 is eyed. Also lined up for today is Fed head Yellen’s testimony, which should shed more light on the central bank’s policy bias.

EUR

The euro gave up its gains from last Friday, as the anti-austerity Greek government didn’t pass its list of reforms to the EU yet. Greece is set to submit its proposals today and these are still up for approval by their creditors, keeping euro gains in check for the time being. Data from Germany was weaker than expected yesterday, as the Ifo business climate index climbed from 106.7 to 106.8, short of the consensus at 107.4. Euro zone final CPI readings are also due today, along with ECB Governor Draghi’s speech.

GBP

The pound managed to stay strong in recent trading, despite weaker than expected UK data. The CBI realized sales index slipped from 39 to 1 instead of improving to 42, indicating a drop in consumer spending. Inflation report hearings are scheduled today and more optimistic remarks on the UK economic recovery could keep the pound afloat.

CHF

The franc had a bit more action in recent trading, although it lost ground to most of its counterparts. There have been no reports released from Switzerland but it seems that franc traders are anticipating euro declines and a potential intervention move from the SNB. The Swiss employment level reading is due today and a drop from 4.23M to 4.22M is expected.

JPY

The yen was stuck in consolidation for the most part, as traders are sitting on the edge of their seats and awaiting more data from Japan later this week. Risk sentiment has been uneasy as well, with market watchers still figuring out what might happen if Greece defaults on its debt.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi got a boost in yesterday’s Asian trading session when financial institutions started projecting Fonterra milk price upgrades later this week. Quarterly inflation expectations in New Zealand fell from 2.1% to 1.8% though, forcing the Kiwi to return its recent wins. News that the OPEC might call for an emergency meeting to cut oil production soon also supported the Loonie for a while. No other reports are lined up from the comdoll economies today, but BOC Governor Poloz is set to give a speech and might lead to Loonie volatility.

By Kate Curtis from Trader’s Way

389

USD

The US dollar suffered a sudden selloff in yesterday’s New York trading session, as Fed head Janet Yellen’s testimony forced market participants to push back rate hike expectations. She pointed out that the Fed would change its forward guidance to reflect any inclination towards hiking rates and clarified that this isn’t likely to happen in the next couple of policy meetings. She mentioned that they would proceed on a meeting-by-meeting basis and would take their time before tightening. Yellen is set to give another testimony today and would likely renew dollar weakness. US CB consumer confidence also came in weaker than expected while the upcoming release of the new home sales report might show a decline from 481K to 471K.

EUR

The euro managed to recover against the dollar but still lost ground to its other forex counterparts, even as EU officials seemed to give the thumbs up to Greece’s list of economic reforms. ECB Governor Draghi didn’t drop any surprises during his latest testimony, although he is set to give another speech today and market participants might pay more attention to his remarks.

GBP

The pound took advantage of the dollar selloff when the UK Inflation Report hearings echoed the same upbeat sentiment as it had earlier. Officials expressed confidence that the downturn in price pressures would boost consumers’ purchasing power and lead to stronger spending and growth eventually. BBA mortgage approvals data is up for release today and BOE Governor Carney is set to give a speech which might lead to more pound gains.

JPY

The yen had a mixed performance as it advanced to the European currencies but gave up ground to the comdolls. There have been no major reports released from Japan so far, leaving the yen at the mercy of risk sentiment while traders await top-tier data later on this week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls surged against the dollar in anticipation of a longer period of low Fed rates, which might keep inflation and global growth supported. Speculations of a milk forecast upgrade from Fonterra and an OPEC oil production cut lifted commodity prices as well. Earlier today, Australia reported a smaller than expected 0.2% quarterly decline in construction work done and a 0.6% increase in its wage price index. Later on, New Zealand visitor arrivals and trade balance figures are due.

By Kate Curtis from Trader’s Way

390

USD

The US dollar struggled to hold its ground in recent trading, as data came in stronger than expected. New home sales picked up by 481K versus the projected 471K gain. In her semi-annual testimony in front of Congress, Fed Chairperson Yellen reiterated her cautious comments in saying that the Fed isn’t in a rush to hike interest rates just yet. US CPI figures are up for release today, with the headline reading slated to show a 0.6% decline in price levels and the core reading expected to print a 0.1% uptick. US durable goods orders data is also due. Weaker than expected data could lead traders to push rate hike expectations back further, which might lead to more dollar weakness.

EUR

The euro was still in a weak spot to its forex counterparts even though there were no major reports released from the region. In his speech yesterday, ECB Governor Draghimentioned that he is seeing a few positive signs in the economy. He refrained from focusing on Greece’s finances and instead chose to highlight the role of capital markets in boosting growth. German unemployment change and GfK consumer climate data are up for release today, both of which are expected to show better figures.

GBP

The pound extended its gains in recent trading sessions, as BOE Governor Carney reiterated his optimistic comments on the economy. He said that the UK could reach its 2% inflation target in two years and that real wages are starting to pick up, which should be good for spending and overall growth. The UK’s second GDP estimate is up for release today and no changes are expected for the 0.5% growth figure.

CHF

The franc edged lower to its counterparts once more, as euro weakness increased the odds of another SNB intervention. Data from Switzerland has also been weaker than expected, as the UBS consumption indicator fell from 1.42 to 1.24. There are no reports lined up from the Swiss economy today.

JPY

The yen had a mixed performance, as it consolidated to most of its major counterparts but gave up ground to the pound. There have been no reports released from Japan yesterday and none are due today, leaving traders to price in their expectations for Japan’s data set due tomorrow. For now, risk sentiment might continue to drive yen movements.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent wins when Fonterra refrained from upgrading its milk forecasts in their latest board meeting. Australia also reported a worse than expected 2.2% decline in private capital expenditure for Q4 2014, indicating weaker business conditions. Later today, Canadian CPI figures are up for release and its headline figure is eyeing a 0.4% decline.

By Kate Curtis from Trader’s Way

391

USD

The US dollar staged a strong rally against its forex counterparts when a couple of Fed officials gave a hawkish bias in their recent testimonies. Market watchers are back to pricing in the possibility of a Fed rate hike in June, although Fed head Yellen previously clarified that they would adjust their forward guidance when they are ready to tighten. Data from the US was mixed, as the core CPI marked a worse than expected 0.7% decline while the headline CPI showed a stronger than expected 0.2% uptick. Durable goods orders data was also mixed, with the headline figure marking a 2.8% gain and the core figure showing a mere 0.3% uptick. US preliminary GDP is due today and a downgrade from 2.6% to 2.1% is eyed.

EUR

The euro suffered massive losses once more, despite stronger than expected data from Germany. The GfK consumer climate report marked a gain from 9.3 to 9.7, outpacing the consensus at 9.6. Meanwhile, the unemployment change reading showed a 20K drop in joblessness, twice as much as the projected 10K decline. German preliminary CPI and French consumer spending data are lined up for today, but it seems that not even strong data could stop the euro’s slide.

GBP

The pound gave up its recent wins when data from the UK came in mostly weaker than expected. Although the GDP reading was unchanged at 0.5% as expected, the preliminary business investment report showed a worse than expected 1.4% drop for Q4 while the previous reading was downgraded. There are no reports lined up from the UK today.

CHF

The franc resumed its slide to the dollar in recent trading, as euro weakness also dragged the Swiss currency along. There have been no reports from Switzerland then and none are due today, which means that the franc might continue to follow the euro’s footsteps or be driven by market sentiment.

JPY

The Japanese yen seemed to ignore the weaker than expected data released earlier today, as the currency continued to advance against most of its counterparts. Household spending and retail sales were both significantly weaker than expected, while the national core inflation figure slumped from 2.5% to 2.2% in January. Industrial production showed an impressive 4.0% monthly gain though, spurred mostly by the pickup in exports of electronic components and automobiles. No other reports are lined up from Japan today but the prospect of further BOJ stimulus might weigh on the currency later on.

Commodity Currencies (AUD, NZD, CAD)

The comdolls erased their recent gains after the dollar surged strongly in recent trading. Data from Canada was stronger than expected, as both headline and core inflation printed 0.2% gains. In New Zealand, ANZ business confidence improved from 30.4 to 34.4. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way

392

thnaks for sharing

393

USD

The US dollar is off to a strong start this week after ending higher against most of its forex counterparts last week. Risk aversion is still present in the financial markets, supporting the US dollar along with the renewal of the Fed’s hawkish bias. US core PCE price index, the Fed’s rumored preferred measure of inflation, is up for release today and a pickup in price levels might lead to more dollar gains. Also lined up for today are data on personal spending and income, along with the ISM manufacturing PMI. Traders are likely to pay close attention to the ISM labor component, which might contain clues for the upcoming NFP release.

EUR

The euro is back on a weak spot once more, as traders are starting to price in expectations for the ECB statement this week. For today, flash CPI readings from the region are due and the headline figure might indicate a 0.5% decline while the core version of the report could show a 0.6% increase. Euro zone unemployment rate is also up for release today and an 11.4% figure is eyed.

GBP

The pound managed to stay resilient at the end of the trading week, even as risk aversion popped its head back in the markets. UK manufacturing PMI is up for release today and analysts are expecting to see an increase from 53.0 to 53.5, which would reflect stronger industry expansion. Stronger than expected data could lead to a bigger bounce for the pound, as this would support the BOE’s claims that lower inflation is leading to better growth prospects.

CHF

The franc was sold off on Friday when SNB officials reiterated that they’d like to see more currency weakness. So far, the central bank has refrained from introducing large intervention moves in the currency market, but their jawboning is preventing the currency from rallying. Swiss manufacturing PMI is due today and a drop from 48.2 to 47.4 is expected, which might lead to more franc selling.

JPY

The yen gave up a lot of ground to the dollar and some gains to its other counterparts, as traders speculated about further BOJ easing after Japan printed weak reports. Its national core inflation fell from 2.5% to 2.2% while the Tokyo core CPI managed to hold steady at 2.2%. Household spending and retail sales both disappointed but preliminary industrial production was promising. Earlier today, Japanese capital spending showed a smaller than expected quarterly gain.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide on Friday, as traders booked profits off the recent rallies. Over the weekend, China’s official PMI readings were less impressive than expected, as the manufacturing PMI landed at 49.9, short of indicating industry expansion. On the upside, the HSBC final manufacturing PMI was revised up from 50.1 to 50.7 for February. No other major reports are lined up from the comdoll economies today.

By Kate Curtis from Trader’s Way

394

USD

The US dollar continued its advance against most of its major counterparts, as risk aversion stayed in the market at the start of the week. Data from the US economy was actually weaker than expected, with the ISM manufacturing PMI falling from 53.5 to 52.9, reflecting a slower expansion in the industry. Construction spending marked a 1.1% tumble versus the projected 0.4% uptick while manufacturing prices stayed flat. No major reports are due from the US economy today, as risk sentiment might drive dollar price action.

EUR

The euro consolidated to the dollar but made a small recovery to its other counterparts as the region’s flash headline CPI came in better than expected with a 0.3% decline versus the projected 0.6% drop. The core CPI came in line with expectations of a 0.6% gain. Meanwhile, the euro zone jobless rate improved to 11.2% from a positively revised 11.3% reading. German retail sales and Spanish unemployment change are lined up from the euro zone today, with strong data likely to support the shared currency.

GBP

The pound was barely able to rally against the dollar but posted a few gains to its other rivals yesterday, as UK manufacturing PMI beat expectations. The figure climbed from 53.1 to 54.1, indicating a pickup in industry expansion. Construction PMI and a speech from BOE Governor Carney are lined up for today, adding to potential volatility among pound pairs later on.

CHF

The franc carried on with its steady decline, as the Swiss manufacturing PMI fell from 48.2 to 47.3, reflecting a larger contraction in the industry. Swiss GDP is up for release today and a weaker growth figure of 0.3% compared to the previous 0.6% expansion is expected. Lower than expected GDP figures could mean more losses for the franc.

JPY

The yen struggled to stay afloat in recent trading, as traders refrained from buying up the lower-yielding currency even in a risk off environment. Data from Japan was weaker than expected, with capital spending falling from 5.5% to 2.8% in Q4 2014. Earlier today though, Japan reported a higher than expected average cash earnings figure of 1.3% versus the projected 0.6% reading.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot recently, as traders digested the recent PBOC rate cut’s effect on global growth and risk appetite. In Australia, company operating profits marked a 0.2% decline for the previous quarter versus the projected 0.7% increase. Earlier today though, building approvals and the current account showed stronger than expected results. Later on, the New Zealand dairy auction will take place and show if prices posted another increase while the Canadian GDP is also up for release.

By Kate Curtis from Trader’s Way

395

USD

The US dollar consolidated against most of its counterparts, as traders hesitated to take huge positions ahead of the upcoming NFP release. There have been no major reports released from the US economy yesterday while today has the ISM non-manufacturing PMI and ADP non-farm employment change reports on tap. The non-manufacturing survey could show weaker industry expansion, as the index is slated to dip from 56.7 to 56.5. Meanwhile, the ADP report could show a stronger increase in hiring of 219K from the previous 213K rise. Stronger than expected data could mean more gains for the dollar, as this could lead to pricing in of positive expectations for the NFP.

EUR

The euro was in for more declines yesterday even though data from the euro zone came in stronger than expected. German retail sales jumped by 2.9% versus the projected 0.5% uptick while Spain reported an increase in hiring of 13.5K instead of the estimated 10.5K drop. Surveys indicating that most traders still believe that Greece’s debt problems could worsen appear to have weighed on the shared currency. For today, Spanish and Italian services PMIs are up for release, along with euro zone retail sales data.

GBP

The pound was still in a weak spot against its forex rivals, despite stronger than expected construction PMI. The reading improved from 50.1 to 60.1, indicating a faster pace of industry expansion. For today, the services PMI is up for release and might have a stronger impact on pound movement, as this sector contributes more to overall economic growth. The reading is slated to climb from 57.2 to 57.6 and possibly lead to a bounce for the British currency.

CHF

The franc barely drew support from stronger than expected Swiss GDP data, as risk aversion stayed in play yesterday. The economy grew 0.6% in Q4 versus the projected 0.3% GDP reading while the previous quarter’s figure was upgraded. There are no reports lined up from the Swiss economy today.

JPY

The Japanese yen enjoyed a few gains in recent trading, as risk aversion extended its stay in the currency market. There have been no reports released from the US economy so far and none are due today, which suggests that sentiment could continue to drive yen movements.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to regain ground in recent trading, although the Loonie drew a bit of support from stronger than expected monthly GDP data from Canada. The economy showed a 0.3% growth figure for December, leading to a higher than expected quarterly GDP reading of 2.4% for Q4. Earlier today, Australia reported a lower than expected GDP figure of 0.5% versus the projected 0.7% expansion. In New Zealand, the dairy auction marked a feeble 1.1% increase in prices. Later today, the BOC will make its rate statement and possibly keep policy unchanged for now.

By Kate Curtis from Trader’s Way

396

USD

The US dollar continued to advance against most of its currency counterparts, despite mixed data from the US economy. The ADP non-farm employment change report showed a smaller than expected 212K increase versus the projected 219K gain, although the previous reading was upgraded. Meanwhile, the ISM non-manufacturing PMI improved from 56.7 to 56.9 instead of falling to the projected 56.5 figure. Initial jobless claims and US factory orders data are up for release later today.

EUR

The euro continued its slide against most of its forex rivals, as weak fundamentals weighed on the shared currency. Services PMI from Spain and Italy came in weaker than expected, causing the region’s final services PMI to fall from 53.9 to 53.7. Retail sales actually beat expectations with a 1.1% gain versus the projected 0.2% uptick. German factory orders data is up for release today but the bigger market mover for euro pairs would be the ECB rate statement.

GBP

The pound gave up most of its recent gains to the dollar and the yen when the UK services PMI fell short of estimates. The reading dropped from 57.2 to 56.7, reflecting a slower industry expansion and potentially lower contribution to overall economic growth. Later today, the BOE will announce its interest rate decision and most likely keep monetary policy unchanged.

CHF

The franc continued to edge lower against the dollar but managed to recover a bit against the euro and the pound. There have been no reports released from the Swiss economy yesterday and none are due today, suggesting that the franc could be sensitive to risk flows.

JPY

The yen had a mixed performance, as it took advantage of the weakness among European currencies but failed to hold on to its gains against the comdolls. There have been no reports released from Japan yesterday, indicating that the yen was acting more as a counter currency. There are still no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Loonie drew strong support from a relatively upbeat BOC statement, as the Canadian central bank refrained from cutting interest rates and indicated that they might no longer need to ease again. Meanwhile, the Australian dollar was still in a weak spot since its GDP reading fell short of expectations with a mere 0.5% growth reading. Earlier today, Australian retail sales data came in line with consensus as it showed a 0.4% uptick. Canadian Ivey PMI is up for release later today and an improvement from 45.4 to 49.4 is eyed.

By Kate Curtis from Trader’s Way

397

USD

The US dollar advanced against most of its counterparts as risk aversion stayed in the markets yesterday. Data from the US was mostly weaker than expected, as the initial jobless claims showed a 320K reading versus the projected 293K figure, while factory orders marked a 0.2% slide. For today, the upcoming NFP release could be a strong catalyst for dollar price action, as this could indicate whether or not the Fed could afford to start tightening policy within the next few months. The economy could show a 241K increase in hiring for February, lower than the previous month’s 257K gain, but the jobless rate could improve from 5.7% to 5.6%.

EUR

The euro continued its slide to its forex rivals, as the ECB rate statement did little to support the shared currency. Although Draghi tried to maintain a hopeful tone and kept monetary policy unchanged, market participants focused on the risks to growth and financial stability. The ECB officially announced the beginning of QE on March 9, which might mean more losses for the euro starting then until the next 18 months. Only medium-tier reports such as trade balance and revised GDP readings are due from the euro zone today.

GBP

The pound got a bit of a boost from the BOE statement, although this event barely indicated policymakers’ biases. Traders are likely to wait for the BOE meeting minutes to be released before taking larger positions on pound pairs. For today, only the UK consumer inflation expectations report is up for release and a decline from the previous 2.5% reading is eyed.

CHF

The franc continued to fall against its major counterparts recently, even though there were no reports released from Switzerland. The start of the ECB’s QE program could mean more selling pressure on EURCHF, which means that traders are on their toes for any intervention moves by the SNB. The Swiss foreign currency reserves report is up for release today and traders would be interested to see if the central bank did intervene recently.

JPY

The Japanese yen once again advanced to its forex counterparts when risk taking weakened in recent trading. There have been no reports released from Japan then and none are due today, indicating that sentiment could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot in recent trading, as traders continued to weigh in on the recent rate cuts by central banks in emerging economies. Canada’s Ivey PMI came in slightly better than expected at 49.7 but still short of indicating industry expansion. Canadian building permits and trade balance figures are up for release later today.

By Kate Curtis from Trader’s Way

398

USD

The US dollar staged a strong rally against its currency counterparts after the US NFP report came in stronger than expected. The economy added 295K jobs in February, bringing the jobless rate down from 5.7% to 5.5% for the month. Wage growth was weaker than expected at 0.1% versus the projected 0.2% increase and the previous 0.5% uptick. However, it seems that June rate hike speculations are back on the table now that the economy has reached full employment. For today, only the labor conditions index is up for release and another strong reading could mean more gains for the dollar.

EUR

The euro continued its tumble to the dollar and yen as risk aversion weighed on most currencies, except for the safe-havens. Medium-tier data from the euro zone came in mostly in line with expectations, although the French trade balance missed the mark. German trade balance and euro zone Sentix investor confidence are lined up for today, with another round of weaker than expected readings likely to weigh on the shared currency. Eurogroup meetings are also set to start today, as markets could tune in to updates on the Greek debt situation.

GBP

The pound was in a weak spot in Friday’s trading sessions, as there were no major reports to keep the currency afloat. There are still no reports lined up from the UK economy today, which suggests that the current trends might carry on and that the pound could be sensitive to risk flows.

CHF

The franc gapped down to the US dollar over the weekend, as Swiss CPI came in weaker than expected on Friday. Analysts expected a flat reading but saw a 0.3% decline instead. There are no reports lined up from the Swiss economy today, which means that the franc might be driven by risk sentiment.

JPY

The yen advanced against most of currency rivals as risk aversion stayed in the markets. Speculations of Fed tightening led to risk-off flows, favoring the lower-yielding yen. Earlier today, Japanese reports came in weaker than expected, as the current account surplus showed a 1.06 trillion JPY reading versus the projected 1.16 trillion JPY figure. The final GDP reading was also downgraded from 0.6% to 0.4%, lower than the projected 0.5% growth figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered huge losses to the dollar as risk aversion kicked in last Friday, driven mostly by speculations of a Fed rate hike in June. Over the weekend, China printed a stronger than expected trade balance, helping keep further losses for the commodity currencies in check. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way

399

Love it.

Kate, do you offer any training? Cheers, G.

400

USD

The US dollar continued to climb against its counterparts, as traders piled on their long positions after seeing the strong NFP report. There have been no major reports released from the US economy yesterday while today has only the JOLTS job openings report on tap. Risk aversion has also been supporting the US dollar recently, as the prospect of a Fed rate cut weighed on higher-yielding currencies.

EUR

The euro carried on with its tumble to its forex rivals, as a combination of weak fundamentals and risk aversion dragged the shared currency lower. Data from the euro zone was mixed, as the German trade balance came in weaker than expected while the region’s Sentix investor confidence report surprised to the upside. French and Italian industrial production numbers are up for release today and weak figures could lead to a sharper drop for the euro.

GBP

The pound was unable to recover against the dollar but it managed to bounce against the yen in recent trading. There have been no reports released from the UK then and none are lined up today, although BOE Governor Carney and hawkish member McCafferty are set to give testimonies. Upbeat comments could allow the pound to recoup more of its recent losses.

CHF

The franc slid lower to most of its forex counterparts, despite the lack of data from Switzerland yesterday. Today has the unemployment rate on tap and an increase from 3.1% to 3.2% is expected, which might lead to more franc weakness. On the other hand, strong data could allow the Swiss currency to get back on its feet.

JPY

The Japanese yen gave up more ground to the dollar but managed to advance against most of the higher-yielding currencies, particularly the comdolls. Data from Japan was mostly weaker than expected, as the GDP was downgraded from 0.6% to 0.4% in Q4 while the current account balance missed expectations. There are no major reports lined up from Japan today, leaving risk sentiment in charge of price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest among the bunch in recent trading, as these higher-yielders got wiped out by risk aversion. Falling commodity prices also weighed on the comdoll group, as oil seemed ready for another leg lower. Earlier today, China printed a stronger than expected CPI reading of 1.4% but its PPI showed a sharper than expected decline, indicating that further weakness in inflation is possible.

By Kate Curtis from Trader’s Way

401

USD

The US dollar continued with its climb to its major counterparts during the Asian session but gave back some of its recent days at the end of the day, as traders booked profits off key levels. There have been no major reports released from the US economy so far, although medium-tier data have surprised to the downside. There are still no top-tier reports lined up from the US today, leaving the dollar to move to the tune of risk sentiment.

EUR

The euro was unstoppable in its decline to the dollar and some of its other forex counterparts, as weak fundamentals and the ongoing ECB quantitative easing weighed on the shared currency. Medium-tier data from the euro zone was mixed, with French industrial production showing a stronger than expected 0.4% uptick and Italian industrial production indicating a worse than expected 0.7% slide. ECB Governor Draghi is set to give a testimony today and his remarks could be crucial in determining euro price action.

GBP

The pound struggled to hold on to its current levels against the dollar, with GBPUSD hovering around the 1.5000 major psychological support. BOE Governor Carney mentioned in his testimony that inflation is likely to hit zero in the coming months, although he still assured that this might support consumer and business spending. UK manufacturing production data is up for release today and a 0.2% uptick is eyed.

CHF

The franc topped out at the .9900 major psychological resistance to the dollar and is still deciding whether to go further or not. Swiss jobless rate held steady at 3.2% as expected. Today has no reports due from Switzerland, which means that the franc could take its cue from euro zone reports or risk sentiment.

JPY

The yen advanced to the dollar and its forex rivals in the latter trading sessions as risk aversion favored the lower-yielding currency. Earlier today, Japan reported a 1.7% decline in core machinery orders, better than the estimated 3.9% drop. PPI came in at 0.5% as expected. There are no other reports lined up from Japan today, leaving yen pairs still sensitive to risk flows.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still in a weak spot yesterday, although their latest losses weren’t so bad. Australia’s NAB business confidence index fell from 3 to 0 while the Westpac consumer confidence report showed a 1.2% decline. Later on, the RBNZ statement is set to spark volatility among Kiwi pairs, depending on whether the officials sound hawkish or dovish. Chinese industrial production and retail sales figures are also lined up.

By Kate Curtis from Trader’s Way