Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
482

USD

The dollar had a mixed performance, as some traders already booked profits off their long USD positions. Data from the US economy came in mixed, with the initial jobless claims coming in line with expectations and the Philly Fed index falling short of consensus. The reading fell from 15.2 to 5.7, worse than the projected drop to 11.9. For today, US CPI figures are due and the headline figure could show a 0.3% increase while the core figure could print a 0.2% gain.

EUR

The euro resumed its slide to its forex rivals, despite the approval of Greece’s reform package from the parliament. There are still a few hurdles for the country to clear before securing the next set of bailout funds so the next days could still be mired in uncertainty. Data from the euro zone came in line with expectations, as the final CPI readings did not undergo revisions. There are no reports due from the euro zone today.

GBP

The pound managed to advance against most of its forex counterparts after BOE Governor Carney reiterated their hawkish bias. In the BOE Inflation Report earlier in the week, he mentioned that the point at which they will hike rates is moving closer. The UK CB leading index showed a 0.4% decline and a downward revision in their previous release. There are no reports due from the UK today.

CHF

The franc gave up ground in recent trading sessions since the Swiss retail sales report turned out to be a huge disappointment. The figure showed a 1.8% annualized decline, much worse than the projected 1.9% increase and the previous 1.6% gain. There are no reports due from the economy today.

JPY

The yen gave up some of its recent wins from the risk-off market environment, as sentiment appeared to improve in the latter trading sessions. There have been no reports released from Japan then and none are due today, suggesting that risk flows could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still on weak ground yesterday, as the BOC rate cut and speculations of an RBNZ rate cut for next week weighed on the Loonie and Kiwi. The Aussie enjoyed a bit more support, thanks to improved MI inflation expectations and a pickup in the CB leading index. Canadian CPI data are due today and the headline figure could show a 0.2% uptick while the core figure could print a 0.1% dip.

By Kate Curtis from Trader’s Way

483

USD

The US dollar ended the previous week on a strong note, thanks to upbeat data from the economy. Headline CPI came in line with expectations of a 0.3% gain while the core version of the report met the consensus of a 0.2% uptick. Building permits and housing starts both came in stronger than expected but the UoM consumer sentiment figure fell short at 93.3 versus the projected 96.0 figure. There are no reports due from the US economy today, leaving risk sentiment at the helm.

EUR

The euro continued to slide against most of its forex rivals even though the German parliament gave the green light for the Greek bailout program. Increased austerity could keep the country in the euro zone for the time being but this might not be enough to eliminate its debt troubles. There were no reports from the euro zone then while today has only the German PPI and euro zone current account balance on tap.

GBP

The pound had a mixed performance on Friday, although it was mostly supported against its forex rivals due to the BOE’s relatively upbeat stance. Recall that Carney said that the point at which rates begin to increase is moving closer. There have been no reports from the UK on Friday and today only had the Rightmove HPI, which showed a mere 0.1% uptick compared to the previous 3.0% gain.

CHF

The franc was also in a weak spot, as traders weren’t too keen to buy up the Swiss currency for fear of central bank intervention. There have been no reports from Switzerland on Friday and none are due today, leaving euro zone events and risk sentiment as the main drivers of price action.

JPY

The yen was able to take advantage of the risk-off environment and the commodities selloff earlier today, even though banks are closed in observance of Marine Day. There are no reports due from Japan, which means that yen pairs might continue to react to commodity prices and overall sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered a sharp selloff earlier today, as China’s gold reserves data indicated a smaller than expected share of the precious metal. This led to a sharp selloff for the commodity currencies, although the Kiwi managed to draw support from NZ Prime Minister John Key’s optimistic remarks on the economy. Last Friday, Canada printed a flat core CPI reading and a 0.2% increase in its headline CPI. Canadian wholesales sales data is due later today.

By Kate Curtis from Trader’s Way

484

USD

The US dollar had a mixed performance as it gave up some ground to the commodity currencies but advanced against the yen and franc. There have been no major reports released from the US at the start of the trading week and there are still no reports lined up today. Because of that, risk sentiment could push dollar pairs around, with the odds slightly in favor of the safe-haven dollar.

EUR

The euro continued to edge lower against most of its rivals, as traders didn’t seem to be too impressed by the latest developments in Greece. In addition, data from the euro zone came in weaker than expected, as Germany reported a 0.1% fall in producer prices versus the projected flat reading. Meanwhile, the euro zone current account balance showed a smaller than expected surplus of 18 billion EUR for May. There are no reports lined up from the region today.

GBP

The pound held on to its recent gains despite the lack of data from the UK yesterday. Today has the public sector net borrowing data on tap and this is expected to show a smaller deficit of 8.6 billion GBP compared to the previous 9.4 billion GBP figure, which would reflect a better financial picture for the economy.

CHF

The franc followed in the euro’s footsteps and sold off against most of its rivals since there were no reports to keep the currency afloat yesterday. Today has the Swiss trade balance on tap and it is expected to show a smaller surplus of 2.54 billion CHF compared to the previous 3.41 billion CHF figure.

JPY

The yen reacted mostly to its counter currencies, as Japanese banks were closed on a holiday yesterday. Today had the BOJ minutes on tap and the report showed that central bank officials are feeling upbeat about the increase in exports and the improvements in business activity. Risk flows could push yen pairs around for the rest of the day.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a bit of a recovery early on, as traders probably booked profits off their short positions ahead of this week’s key events. The RBA minutes indicated that further AUD declines are both likely and necessary since commodity prices are falling and trade volumes are also weak. In Canada, the wholesale sales report churned out a weaker than expected 1.0% decline versus the estimated 0.1% uptick, setting the stage for a disappointing retail sales report later on. New Zealand credit card spending showed a 6.5% gain, weaker compared to the previous 7.2% increase.

By Kate Curtis from Trader’s Way

485

USD

The US dollar gave back some of its recent gains to its forex rivals, as traders probably booked their profits off their long positions. There have been no reports released from the US economy then while today only has the existing home sales figure on tap. The report could show an increase from 5.35M to 5.40M, which might be enough to renew dollar demand.

EUR

The euro managed to pull up from its recent dive against the dollar and resume its recovery against some of its peers. There have been no major reports out of the euro zone yesterday and today only has the low-tier Italian retail sales report due. The Greek parliament is set to pass legislation on the concrete austerity measures to be implemented within the day.

GBP

The pound weakened to most of its currency counterparts in recent trading sessions, as traders reduced their holdings ahead of today’s event risk. BOE minutes are due and the officials are expected to have voted unanimously to keep monetary policy unchanged. However, some believe that hawkish members might’ve voted to hike rates once more, as upbeat remarks could allow the pound to regain ground.

CHF

The franc was also in a weak spot yesterday, as there were no reports to give the currency a boost. Today is also an empty slate in terms of Swiss economic data, which means that franc pairs could take their cue from the euro or overall market sentiment.

JPY

The yen returned some of its recent wins when risk appetite seemed to improve yesterday. There have been no reports out of Japan then and today has the all industries activity index on tap. A 0.5% decline is eyed, following the disappointing read from the tertiary industry activity index last week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to bounce back in recent sessions, as traders might’ve trimmed their short positions ahead of the event risks. Earlier today, Australia’s CPI came in line with expectations of a 0.7% increase. Later on, the RBNZ will announce its interest rate decision, with some analysts expecting to see a rate cut and more dovish remarks.

By Kate Curtis from Trader’s Way

486

USD

The US dollar regained ground against its forex rivals, thanks to a selloff in commodities and a downturn in risk appetite. Data from the US has been stronger than expected, with existing home sales picking up from 5.32M to 5.49M. Up ahead, the US is set to print its initial jobless claims and CB leading index. The initial jobless claims report could show a fall from 281K to 279K, which is good for hiring trends, while the CB leading index is expected to post a 0.1% uptick.

EUR

The euro gave up ground to some of its forex counterparts ahead of the Greek parliament’s meeting on austerity measures. The shared currency had a bit of a relief rally when the legislation was passed, putting Greece closer to securing more bailout funds. The Spanish jobless rate is up for release today and a fall from 23.8% to 22.8% is eyed for the second quarter, which might be positive for the euro.

GBP

The pound was able to advance against most of its peers when the BOE minutes showed that the central bank was feeling more optimistic about their economic prospects. However, policymakers still voted unanimously to keep asset purchases and interest rates unchanged for the time being. UK retail sales data is due today and a 0.4% gain is eyed, stronger than the previous 0.2% uptick in May.

CHF

The franc moved mostly sideways in recent trading sessions due to the lack of top-tier events in Switzerland. Today’s schedule is still empty, which suggests that the franc could take its cue from risk sentiment and euro price trends.

JPY

The yen was able to rake in some gains against its rivals when risk appetite turned sour in the financial markets. Earlier today, Japan printed a wider trade deficit of 0.25 trillion JPY compared to the previous 0.18 trillion JPY but this wasn’t enough to derail the yen’s rally. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The RBNZ cut interest rates from 3.25% to 3.00% in this week’s rate statement, citing that some further easing might be likely. However, the Kiwi wasn’t sold off so heavily since the central bank was notably less dovish than expected. In Australia, the quarterly NAB business confidence index climbed from 0 to 4, reflecting a pickup in optimism for Q2. Canada is set to print its retail sales report later today and a 0.4% uptick in headline consumer spending and a 0.7% increase in core retail sales is eyed.

By Kate Curtis from Trader’s Way

487

USD

The US dollar advanced against most of its forex rivals as risk aversion set in when commodity prices continued to tumble. Data from the US came in better than expected, with initial jobless claims falling to 255K and the CB leading index showing a strong 0.6% increase and an upgrade in the previous figure. US flash manufacturing PMI is due today, along with new home sales figures. The PMI could show a climb from 53.6 to 53.7 while new home sales could dip from 546K to 543K.

EUR

The euro managed to hold on to some of its recent gains to the dollar and yen while advancing against the commodity currencies and the pound. The Greek parliament signed the legislation that would allow harsher austerity measures to be put in place, enabling the country to secure more bailout funds and stay in the euro zone. The ECB also expanded its emergency lending fund to the nation. For today, euro zone PMI readings are up for release and strong figures could give the shared currency a boost.

GBP

The pound gave up ground in yesterday’s London trading session when the UK retail sales figure disappointed. The report showed a meager 0.2% uptick versus the projected 0.4% figure but the previous reading was upgraded from 0.2% to 0.3%. Still, the report was enough for some traders to start doubting that consumers are able to take advantage of higher wages and weaker inflation. BBA mortgage approvals are due today and a climb from 42.5K to 43.5K is eyed.

CHF

The franc was in a weak spot in recent trading even though there were no reports released from Switzerland. Speculations of further intervention from the SNB kept EURCHF climbing, as the central bank recently admitted to stepping in the forex market to actively weaken the franc. No reports are due from the Swiss economy today.

JPY

The yen strengthened in recent trading sessions, thanks to risk aversion and falling commodities. Earlier today, Japan reported an increase in its flash manufacturing PMI from 50.1 to 51.4, reflecting a stronger pace of expansion in the industry. No other reports are due from Japan today, leaving risk sentiment at the helm.

Commodity Currencies (AUD, NZD, CAD)

Thecomdolls were sold off in recent sessions, as oil and gold prices continued to tumble. Earlier today, China printed a fall in its Markit manufacturing PMI from 49.4 to 48.2 – its lowest level in 15 months. This triggered a sharp selloff for the Aussie, as traders anticipated even weaker trade levels from China’s largest trade partner. Yesterday, Canada printed stronger than expected retail sales figures, with the headline reading showing a 1.0% gain and the core figure showing a 0.9% increase.

By Kate Curtis from Trader’s Way

488

GBP/USD: Kiss of death from Carney? GBP/USD still trading heavy, EUR/GBP has managed to move about 0.70 which is keeping the pressure on cable. Wood**** expects the cross to dip towards 1.5250. Mir mentions how Carney’s comments might be the reason behind GBP/USD’s downside move. Wood**** explains how the Bank of England is not doing what it is supposed to do, the forward guidance remains in shambles.
GBP/JPY: Unable to break above 195 Has failed to break above 195, most sterling crosses look to have made a temporary top, notes Wood****. He believes that GBP crosses might pullback lower and GBP/JPY might see a dip towards 184 soon.
AUD/NZD: sees downside potential towards 1.09 Commodities have remained under pressure and the Kiwi has faced the pressure. Aussie has shifted back to weakness. The AUD/NZD might head lower towards 1.09 area, forecasts Wood****. Both AUD and NZD set to weaken but the Aussie might be in for some more weakness.
EUR/USD: Supported as Greek fears decline EUR/USD has been more resilient this week due to ease in Greek fears. EUR/GBP remains preferred for trading the Euro, according to Wood****. He further believes the single currency has been data-responsive this week.
See more at: Forex Strategy: USD/JPY bear trap? GBP/USD to struggle ahead after Carney “guidance" - Tip TV

489

USD

The US dollar was in for a weak start this week since traders seem to be reducing their exposure ahead of the top-tier events later on. For today, only the durable goods orders report is due and a rebound is eyed. The headline figure could show a 3.2% gain after the previous 2.2% slide while the core figure could show a 0.4% uptick after the previous flat reading.

EUR

The euro advanced to some of its forex rivals at the start of this week, as talks in Greece continued to see positive developments. Last Friday’s PMI readings from France and Germany were mostly disappointing but these were brushed off. In terms of data releases, the German Ifo business climate reading is due today and a climb from 107.4 to 107.6 is expected for July. Stronger than expected data could spur more euro gains while a weak reading could force the shared currency to return some of its wins.

GBP

The pound could be in for further consolidation after Friday’s lack of top-tier data. Only the CBI industrial order expectations report is due today and a climb from -7 to -4 is eyed, reflecting a smaller contraction in volumes. A positive reading could mean a rally for the pound while a lower than expected figure could spur more losses.

CHF

The franc sold off to its currency counterparts as traders seemed to favor the dollar among the safe-haven currencies these days. There have been no reports released from the Swiss economy then and none are due today, indicating that risk appetite might keep driving franc price action.

JPY

The yen advanced to its counterparts on Friday when commodity price slides kept risk aversion in play. There have been no reports released from Japan then and none are due today, suggesting that risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot last week due mostly to falling gold prices. Crude oil is also edging lower, triggering more declines for the Loonie. There are no reports lined up from Australia, Canada, or New Zealand today which means that commodity price trends could play a role in the price action of their respective currencies.

By Kate Curtis from Trader’s Way

490

USD

The US dollar was in a weak spot recently, despite stronger than expected data from the economy. Headline durable goods orders showed a 3.4% jump versus the projected 3.2% gain but the previous reading was downgraded to show a 2.2% decline. Core durable goods orders saw a 0.8% increase instead of the projected 0.4% uptick, following the previous flat reading. For today, US CB consumer confidence data is due and a drop from 101.4 to 100.1 is eyed.

EUR

The euro continued to advance against its forex rivals as Greek talks showed positive developments. Data from the euro zone was also better than expected, with the German Ifo business climate index improving from 107.5 to 108.0, higher than the projected 107.6 figure. For today, there are no reports lined up from the euro zone.

GBP

The pound was stuck in consolidation against most of its forex counterparts when traders sat on their hands ahead of the UK GDP release today. The economy is expected to show a 0.7% growth figure, stronger than the previous quarter’s 0.4% expansion. A higher than expected GDP figure could remind traders that the BOE is moving towards a more hawkish stance, which could spur more gains for the pound.

CHF

The franc sold off against its forex counterparts once more, even with the lack of data from Switzerland. There are still no reports lined up from the Swiss economy today, suggesting that the currency might keep selling off if the current market sentiment persists.

JPY

The yen regained a bit of ground, thanks to the risk-off market environment. There have been no reports released from Japan but it looks like the selloff in global equities is leading traders to flee to the safe-haven yen. There are still no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was off to a poor start since gold prices continued to tumble early on in the week. There have been no reports released from the comdoll economies recently, making the Loonie sensitive to oil price trends as well. Underlying inflation data from Canada is up for release today but risk sentiment could play a bigger role in price action.

By Kate Curtis from Trader’s Way

491

USD

The dollar was hit by profit-taking activity in yesterday’s US trading session, with traders closing off their long positions ahead of the FOMC statement today. Data from the US came in mixed yesterday, as the CB consumer confidence index fell from 99.8 to 90.9 versus the projected 100.1 figure while the Richmond manufacturing index beat expectations. The Fed could hesitate to commit to any tightening this year, as another set of commodity price declines are in the cards. However, if Yellen gives upbeat remarks, the US dollar could regain a lot of ground.

EUR

The euro gave back some of its recent wins since there were no reports released from the euro zone yesterday. Today has the German GfK consumer sentiment figure on tap and an unchanged reading from the previous 10.1 figure is expected. Stronger than expected results could give the shared currency a boost while a drop could lead to further losses.

GBP

The pound drew a bit of support from the UK preliminary GDP release, which came in line with expectations of 0.7% growth for Q2. On a more upbeat note, the previous reading was upgraded to show a 0.4% expansion. Medium-tier data from the UK are lined up today, namely net lending to individuals, mortgage approvals, and CBI realized sales.

CHF

The franc regained a bit of ground in recent trading sessions, mostly because traders booked profits off their dollar trades and possibly pursued other safe-havens like the Swissy. The Swiss UBS consumption indicator is due today and an improvement from the previous 1.73 reading might lead to more franc gains.

JPY

The yen gave back its recent wins as risk sentiment improved in recent trading sessions. Earlier today, Japan printed a stronger than expected retail sales figure of 0.9% versus the projected 0.8% increase but weaker compared to the previous 3.0% gain. No other reports are lined up from Japan today, indicating that risk sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to score some gains in recent sessions, despite the selloff in Chinese equities and commodities. The Chinese government and central bank doled out another round of stimulus efforts to stem the selloff in the stock market, leading to a bounce among comdolls as well. Earlier today, RBNZ Governor Wheeler said that the New Zealand economy isn’t weak enough to warrant a large rate cut, and these words spurred gains for the Kiwi. No reports are due from the comdolls today.

By Kate Curtis from Trader’s Way

492

USD

The US dollar had a volatile time during the FOMC statement but generally ended higher against its currency counterparts. The Fed didn’t give any explicit remarks on potential rate hikes but upgraded its wording to show a more optimistic assessment of the labor market. They added that they will continue to wait for some improvements in the jobs market to see if they can afford to tighten soon. The US is set to print its advanced GDP reading today and a 2.6% growth figure is eyed for the second quarter of the year.

EUR

The euro gave up a bit of ground in recent trading, even though data came in line with expectations. Germany’s GfK consumer climate reading stayed unchanged at 10.1 as expected. Today has the German preliminary CPI and unemployment change data on tap, along with Spain’s flash CPI and GDP figures. Strong data could allow the euro to regain traction against its forex rivals.

GBP

The pound gave up ground to the dollar but managed to stay strong against its other peers, despite mixed reports from the UK. Net lending to individuals was better than expected at 3.8 billion GBP while the previous month’s reading saw an upgrade to 3.5 billion GBP. CBI realized sales data came in weaker than expected as the reading fell from 29 to 21 instead of improving to 30. For today, there are no reports due from the UK.

CHF

The franc weakened against the dollar but advanced to the euro, as the UBS consumption indicator landed at 1.68. The previous reading was downgraded from 1.73 to 1.62 though, indicating that conditions were worse than initially reported. The KOF economic barometer is due today and a climb from 89.7 to 90.1 is expected.

JPY

The yen was a big loser in recent trading, perhaps driven mostly by the strong rally in USDJPY after the FOMC statement. Risk appetite also had a bit of improvement when Chinese equities stabilized after the government’s and central bank’s intervention efforts. Earlier today, Japan reported a better than expected preliminary industrial production increase of 0.8% versus the projected 0.4% rise.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up their recent wins to the dollar but remained afloat against some of their currency counterparts, thanks to a strong pickup in oil prices. Earlier today, Australia reported a worse than expected 8.6% slide in building approvals versus the projected 0.8% fall while import prices logged in a 1.4% gain as expected. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way

493

USD

The US dollar gave up some of its gains when the US advanced GDP reading missed expectations. The economy expanded by only 2.3% in the second quarter versus expectations of 2.6% growth. Revisions to previous data also suggested that the economy didn’t perform as strongly as initially reported. Later today, the Chicago PMI and revised UoM consumer sentiment data are up for release and these could still spur strong dollar moves before the end of the week.

EUR

The euro sold off sharply against most of its peers when the IMF expressed doubts about the third bailout program for Greece. As it turns out, the institution would like to see debt relief from the country’s creditors to ensure that the country can eventually make it out of the debt cycle. However, this idea has been strongly opposed by Germany and most of the other European governments. Data from the euro zone was mostly weaker than expected, with Germany indicating a 9K increase in joblessness and Spain’s CPI and GDP falling short of expectations. German and French consumer spending reports are due today, along with euro zone flash CPI readings.

GBP

The pound managed to hold on to some of its recent gains, except against the dollar and the yen. The GfK consumer confidence index slipped from 7 to 4 instead of landing at 5, reflecting weaker optimism in the UK. There are no reports due from the UK today.

CHF

The franc carried on with its selloff to the dollar, despite stronger than expected KOF economic barometer readings. The figure climbed to 99.8, outpacing the consensus at 90.3, while the previous reading was upgraded to 89.8. There are no reports due from Switzerland today.

JPY

The yen seemed unnerved from the latest set of disappointing figures from Japan, as household spending slumped by 2.0% instead of showing the projected 2.0% gain while the unemployment rate climbed from 3.3% to 3.4% in June. The Tokyo core CPI showed a 0.1% decline instead of staying flat but the national core CPI managed to post a small 0.1% uptick. Japanese housing starts are still on the docket for today.

Commodity Currencies (AUD, NZD, CAD)

The Loonie suffered a fresh round of selling after oil prices resumed their tumble. In Australia, yesterday’s building approvals report showed a 8.2% drop but the currency was able to draw support from today’s stronger-than-expected PPI release. The report showed a 0.3% gain in producer prices for the second quarter, higher than the projected 0.2% uptick. In New Zealand, the ANZ business confidence index slumped from -2.3 to -15.3 in July. Canada’s monthly GDP report is on tap for today.

By Kate Curtis from Trader’s Way

494

USD
The US dollar had a volatile trading day on Friday, as profit-taking took place at the end of the month. Economic data from the US came in mixed, with the employment cost index falling short of expectations with a mere 0.2% uptick instead of the projected 0.6% increase and the Chicago PMI beating forecasts. The UoM consumer sentiment index was downgraded from 93.3 to 93.1 instead of being upgraded to the projected 94.2 figure. For today, the US core PCE price index is due, along with personal spending and income reports. The ISM manufacturing PMI is also up for release and the employment sub-index could draw close attention.

EUR
The euro is still on a weak spot, thanks to news that the IMF is no longer on board with the third bailout for Greece. Negotiations are still ongoing, which means more uncertainty for the shared currency. Final manufacturing PMI readings from the euro zone’s top three economies are due today and upgrades could mean gains for the euro while downgrades could spur more losses.

GBP
The pound advanced against most of its rivals, particularly the commodity currencies, in recent trading. There have been no economic reports out of the UK last Friday but traders seem to be bracing themselves for this week’s set of reports. For today, the manufacturing PMI is due and a climb from 51.4 to 51.6 is expected.

CHF
The franc was still edging lower to the dollar on Friday, as there were no reports out of Switzerland. Today has the Swiss manufacturing PMI on tap and a climb from 50.0 to 50.6 might be seen. A weaker than expected reading could mean more franc weakness while strong figures could spur gains.

JPY
The yen regained ground to its forex rivals on Friday, as risk aversion remained in play. Data from Japan was mostly weaker than expected, as household spending fell by 2.0% while the inflation readings showed a standstill. Earlier today, the final manufacturing PMI for July was downgraded from 51.4 to 51.2. No other reports are lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)
The comdolls resumed their selloff on Friday, thanks to weak data from Canada. The monthly GDP reading showed a 0.2% contraction for May, following the previous 0.1% contraction and signaling that the economy is in recession since the GDP figures have been negative in six out of the last seven months. Over the weekend, Chinese official PMI readings came in mostly in line with expectations, allowing the Aussie to regain a bit of ground.

By Kate Curtis from Trader’s Way

497

USD

The US dollar continued to advance against its forex peers at the start of the week, despite weaker than expected data from the US economy. The ISM manufacturing PMI slid from 53.5 to 52.7 in July, reflecting a slower pace of expansion in the industry and showing a decline in the employment component. The core PCE price index held steady at 0.1% while personal spending and income also came in line with expectations. Today has the factory orders report on tap and a 1.8% rebound is eyed.

EUR

The euro gave up ground to some of its counterparts, even though some of the euro zone PMI readings enjoyed slight upward revisions. The lack of progress in Greece’s third bailout appears to be weighing on the shared currency again, even though data has been stable. The Spanish unemployment change report is lined up today and it might show a 45.6K drop in joblessness, a slower pace of decline compared to the previous release.

GBP

The pound was able to extend its rallies, thanks to UK manufacturing PMI coming in better than expected. The figure climbed from 51.4 to 51.9, outpacing the consensus at 51.6 and reflecting a faster pace of growth in the industry. The construction PMI is up for release today and even though this doesn’t usually spur a strong reaction among pound pairs, another upside surprise could mean sustained gains for the pound. Analysts are expecting the reading to climb from 58.1 to 58.6.

CHF

The franc continued to sell off against the dollar and some of its other forex rivals, as Swiss data came in weaker than expected. The manufacturing PMI fell from 50.0 to 48.7, indicating industry contraction, instead of improving to the projected 50.6 figure. There are no reports lined up from Switzerland today.

JPY

The yen advanced against most of its counterparts, as risk aversion kept the lower-yielding currency supported. There have been no major reports out of Japan, although the final manufacturing PMI for July was downgraded from 51.4 to 51.2. There are still no reports due from Japan today, which suggests that risk sentiment could play a role in price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide in recent trading sessions, weighed down again by weaker commodity prices and a fall in Markit’s Chinese manufacturing PMI. Earlier today, the Aussie got a boost from better than expected retail sales figures, which showed a 0.7% gain versus the projected 0.5% uptick and a positive revision in the previous report. Australia’s trade balance was also better than expected, although it marked a wider deficit compared to the previous month. The RBA is set to announce its monetary policy decision later on and no changes to the 2.00% rate is expected. New Zealand will have its global dairy trade auction and release its quarterly jobs data in the early Asian trading session tomorrow.

By Kate Curtis from Trader’s Way

498

USD

The US dollar regained a bit of ground in recent trading, as economic data came in line with expectations. Factory orders picked up by 1.8%, a rebound from the earlier 1.1% decline. For today, the ADP non-farm employment change report is due and a 216K increase is eyed, weaker compared to the previous 237K gain. A lower than expected figure could set the tone for a disappointing NFP report, which might lead to a sharp dollar selloff, while a strong figure could spur rallies. Also lined up today is the US ISM non-manufacturing PMI, which is expected to climb from 56.0 to 56.3.

EUR

The euro returned its recent wins to the dollar and most of its forex rivals, despite better than expected jobs data from Spain. The country showed a 74K drop in unemployment, larger than the projected 45K reduction but smaller than the previous 94.7K drop. The selloff in Greek equities when the country’s stock market reopened was mostly to blame for the drop in the shared currency’s value. For today, euro zone retail sales and final PMI readings from some of its top economies are lined up.

GBP

The pound was stuck in consolidation to most of its forex peers since traders are waiting to see how the Super Thursday turns out. UK construction PMI was weaker than expected at 57.1, down from the previous 58.1 figure and lower than the projected 58.6 reading. For today, the services PMI is due and it could still spur pound volatility since the sector accounts for majority of overall economic activity. Analysts are expecting to see a dip from 58.5 to 58.1, which might lead to a bit of pound weakness.

CHF

The franc sustained its losses to most of its counterparts because there were no reports from Switzerland to keep the currency afloat. Swiss CPI is due today and a 0.4% drop in price levels is expected to follow the previous 0.1% uptick. Weaker than expected data could mean more losses for the franc while a strong figure could spur gains.

JPY

The yen had a mixed performance since it functioned mostly as a counter currency in recent trading sessions. Data from Japan was weaker than expected, with average hourly earnings showing a 2.4% drop instead of the projected 0.9% increase. There are no reports lined up from Japan today, leaving risk sentiment in control.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi resumed its selloff after the GDT auction showed a 9.3% drop in dairy prices and the New Zealand jobs report fell short of expectations. The economy showed a mere 0.3% increase in hiring for the second quarter, short of the 0.5% expected gain, while the jobless rate climbed from 5.8% to 5.9%. The Aussie managed to hold on to most of its gains after seeing upbeat retail sales and trade balance figures, followed by a less dovish than expected RBA statement.

By Kate Curtis from Trader’s Way

499

USD

Despite mixed economic reports from the US, the dollar managed to advance against most of its forex counterparts in recent trading. The ISM non-manufacturing PMI posted a huge upside surprise, as the reading climbed from 56.0 to 60.3 in July. However, the ADP non-farm employment change report turned out to be a disappointed as it printed a mere 185K increase in hiring, short of the projected 216K gain. Aside from that, the previous month’s figure was downgraded. This could set the tone for a weak NFP release on Friday, which might mean lower odds of a Fed rate hike in September.

EUR

Economic data from the euro zone came in mostly weaker than expected, except for the Spanish services PMI which climbed from 56.1 to 59.7. Euro zone retail sales showed a sharper than expected 0.6% drop instead of the projected 0.1% decline while Italian industrial production showed a large 1.1% tumble. Only the German factory orders report is up for release today and a 0.4% rebound is eyed.

GBP

Pound pairs were mostly in consolidation yesterday, despite weaker than expected UK services PMI which fell from 58.5 to 57.4. Traders are waiting for upbeat remarks in today’s set of top-tier central bank catalysts, namely the BOE decision, MPC minutes, and Inflation Report hearings. In the previous hearing, Carney said that the point at which they could hike rates is moving closer. If he reiterates this view, the pound could be in for more gains, but a cautious statement could force the currency to retreat.

CHF

The franc continued to sell off against its counterparts when Swiss CPI came in weaker than expected. The report showed a 0.6% monthly decline in price levels, worse than the projected 0.4% drop. Swiss SECO consumer climate data is due today and a drop from -6 to -7 is expected, with a lower than expected reading likely to spur more losses for the franc.

JPY

The yen was able to rack up more gains against most of its rivals, even though there were no reports released from Japan. Later today, the leading indicators is due and a climb from 106.2% to 106.9% is expected, which might allow the yen to go for more wins. Other than that, risk sentiment might continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Aussie got another boost from stronger than expected employment data, with a 38.5K increase in hiring versus the projected 10.2K gain. Stronger than expected trade balance from Canada also allowed the Loonie to regain a bit of ground, along with declining crude oil inventories in the US. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader’s Way

500

USD

The US dollar had a mixed performance as it reacted to currency-specific events from its forex rivals. Aside from that, traders are probably positioning ahead of the NFP release later today, as this could serve as a sign of whether or not the Fed can be able to hike interest rates by September. Analysts are expecting to see a 215K increase in hiring, slightly slower compared to the previous month’s gain, but an upside surprise could be enough to get dollar bulls charging. Keep in mind that Challenger job cuts showed a worse than expected increase in layoffs while the ADP report showed a weaker than expected reading, suggesting the possibility of a downside surprise.

EUR

The euro struggled to hold on to its recent gains even though data from the region was stronger than expected. German factory orders picked up by 2.0% versus the projected 0.4% uptick while euro zone retail PMI climbed from 50.4 to 54.2. German and French industrial production and trade balance numbers are lined up for today but traders might be paying closer attention to data from the US.

GBP

Super Thursday turned out to be a disappointment for the pound, as the MPC minutes and the Inflation Report indicated that the BOE isn’t ready to tighten monetary policy just yet. This was in contrast to Governor Carney’s hints that they’re moving closer to hiking interest rates. The central bank upgraded forecasts for growth, wage inflation, and business investment while downgrading projections for employment and CPI. Aside from that, only one MPC member voted to hike rates as opposed to market expectations of seeing two to three policymakers voting to tighten. UK trade balance is lined up today but this might not have such a huge impact on pound movement.

CHF

The franc carried on with its descent, thanks to weaker than expected data from Switzerland. The SECO consumer climate index showed a drop from -6 to -19 instead of the projected -7 figure, indicating an increase in pessimism. For today, the unemployment rate is due and no change to the previous 3.3% figure is eyed.

JPY

The yen had a mixed performance as it also reacted to currency-specific events, just like the US dollar. There have been no major reports out of Japan recently but the BOJ statement today could play a key role in yen price action. Apart from that, the NFP release might have a significant impact on USDJPY movement that might carry on to other yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Aussie enjoyed a bit of support from upbeat employment data, as the economy added 38.5K jobs in July versus the projected 10.2K increase. Earlier today, the RBA monetary policy statement showed a less dovish than usual outlook, allowing the Aussie to gain further ground. Meanwhile, Loonie traders are waiting for the release of Canada’s jobs data and Ivey PMI later today. Both reports are slated to show improvements but disappointing readings could spur more Loonie losses.

By Kate Curtis from Trader’s Way

501

USD

The US dollar had a volatile trading run on Friday, as the NFP report came in slightly weaker than expected. The economy added 215K jobs in July, lower than the projected 225K gain. However, the previous figures enjoyed upgrades amounting to an additional 14K positions. Meanwhile, the jobless rate held steady at 5.3% while the participation rate was unchanged at 62.6%. A few Fed officials are set to give testimonies today and their rhetoric could be interpreted as signals for when the central bank might hike rates.

EUR

The euro was mostly weaker last week, thanks to downbeat reports from most of the top economies in the region. German industrial production and trade balance missed expectations while French industrial production came up short as well. Only the euro zone Sentix investor confidence report is due today and a climb from 18.5 to 20.2 is expected.

GBP

The pound was in a weak spot last Friday when the UK trade balance missed expectations. The report showed that the deficit widened from a downgraded 8.4 billion GBP to 9.2 billion GBP instead of the projected 9.1 billion GBP shortfall. This cast doubts on the BOE’s hawkishness, especially since the Super Thursday events revealed that most of the policymakers are not too eager to hike rates just yet. There are no reports due from the UK today.

CHF

The franc continued to sell off against the US dollar without any major catalysts from Switzerland. The unemployment rate was unchanged at 3.3% as expected while the foreign currency reserves report showed an increase from 516 billion CHF to 531.8 billion CHF, suggesting potential intervention. No reports are due from Switzerland today.

JPY

The yen had a mixed trading day on Friday as it reacted to currency specific data. The BOJ statement didn’t contain any changes to monetary policy as expected and central bank officials barely provided clues on what they might do next. For today, Japanese current account balance, consumer confidence, and Economy Watchers sentiment data are lined up.

Commodity Currencies (AUD, NZD, CAD)

The Canadian dollar gave up ground after the release of Canada’s jobs report, even though the actual reading came in slightly better than expected at 6.6K versus 5.3K while the jobless rate was unchanged at 6.8%. The Ivey PMI was also better than expected at 52.9 versus the projected 51.8 figure but was down from the previous 55.9. Over the weekend, China reported a better than expected annual CPI of 1.6% versus the projected 1.5% figure but the PPI fell short of consensus.

By Kate Curtis from Trader’s Way

502

USD

The US dollar gave up ground in yesterday’s trading sessions when the labor market index fell from 1.4 to 1.1, leading some traders to pare expectations on a Fed rate hike this September. Testimonies from Fed officials have also been mixed, which suggests that policymakers aren’t quite sure if they should vote for tightening soon. Preliminary labor costs and non-farm productivity numbers are up for release today and improvements should allow the dollar to regain ground while weak figures could push it lower.

EUR

The euro regained traction on hopes that a Greek deal will be passed soon. Data from the euro zone was weaker than expected, with the Sentix investor confidence reading falling from 18.5 to 18.4 instead of improving to 20.2. The German ZEW economic sentiment reading is lined up today and analysts are expecting to see a climb from 29.7 to 31.7. The euro zone’s ZEW figure is slated to improve from 42.7 to 43.9 as well, but disappointing results could force the euro to return its recent wins.

GBP

The pound was still in a weak spot against most of its forex rivals, except for the US dollar. There have been no reports out of the UK yesterday while today had the BRC retail sales monitor on tap. The report indicated a 1.2% year-over-year gain, down from the previous 1.8% increase.

CHF

The franc erased some of its losses in yesterday’s sessions, as some traders booked profits off their short positions. The SNB is seen to have intervened in the markets again, as the foreign currency reserves data showed a large increase last week. There were no reports released from Switzerland yesterday and none are due today.

JPY

The yen got sold off when data from Japan came in mostly weaker than expected yesterday. The current account surplus shrank from 1.64 trillion JPY to 1.30 trillion JPY, lower than the projected 1.41 trillion JPY surplus. Consumer confidence was also weaker than expected as the index fell from 41.7 to 40.3 but the Economy Watchers sentiment index improved from 51.0 to 51.6, short of the projected 53.1 figure. Preliminary machine tool orders data is due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their selloff in recent trading sessions, as trade data from China reflected weaker imports and exports. This suggests a slowdown in Chinese demand, as well as a downturn in global trade. Earlier today, Australia showed a drop in NAB business confidence from 8 to 4, reflecting weaker optimism. Oil prices saw a sharp rebound yesterday but the downtrend remains intact, suggesting weaker Loonie performance.

By Kate Curtis from Trader’s Way

503

USD

The US dollar took advantage of the run in risk aversion in recent trading sessions, after the Chinese central bank announced a devaluation of its currency. Aside from that, data from the US economy came in stronger than expected, with the preliminary unit labor costs showing a 0.5% uptick for the previous quarter and preliminary non-farm productivity rising by 1.3%. JOLTS job openings data is lined up today, along with a speech by FOMC member Lockhart.

EUR

The euro staged a strong rally in yesterday’s trading sessions when the Greek government finally struck a deal for the third bailout. This can give the debt-ridden nation enough funds to avert a default on its next loan obligation to the ECB by August 20. Data from the euro zone was mixed, as the German ZEW economic sentiment figure showed a drop from 29.7 to 25.0 while the region’s index jumped from 42.7 to 47.6. There are no major reports lined up from the euro zone today.

GBP

The pound was unable to make any headway against the dollar but it managed to chalk up some gains against the commodity currencies. Medium-tier data from the UK showed a bit of a slowdown, particularly in the BRC retail sales monitor and the CB leading index. The jobs report is lined up for today and the claimant count change could show a 1.4K increase in joblessness while the unemployment rate could hold steady at 5.6%. The average earnings index is slated to fall back to 2.8% after rising to 3.2% in June.

CHF

The franc continued to tread lower against the euro and the dollar but managed to score wins against the comdolls. There have been no major reports out of Switzerland yesterday and none are due today, leaving euro zone events and risk sentiment as main drivers of franc price action.

JPY

The yen gave up more ground to the dollar as USDJPY is closing in on its previous year highs at 125.80. Only medium-tier reports have been released from Japan recently and these didn’t show any surprises. With that, the eyen could continue to react to risk sentiment and currency-specific data in the coming sessions.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of ground when the PBOC announced that it is devaluing the yuan. While the central bank said that it’s just a one-time move, market watchers believe that more depreciation efforts could be in store since the PBOC seems to be worried about the weak export activity in China. In Australia, the NAB business confidence index slumped from 8 to 4 while the Westpac consumer sentiment reading showed a 7.8% gain. Chinese industrial production and retail sales figures are still up for release later today.

By Kate Curtis from Trader’s Way