Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
969

Forex Major Currencies Outlook (July 04, 2017)

USD

The US dollar staged a strong rebound against its peers when the ISM manufacturing PMI beat expectations. The reading climbed from 54.9 to 57.8 versus the projected 55.0 figure, buoyed by stronger hiring, new orders, and production. The index for prices dropped while inventories slid also. US banks are closed for the Fourth of July holiday today so low liquidity is expected.

EUR

The euro returned some of its recent wins as final manufacturing PMI readings from its top economies saw some downgrades. In addition, the Spanish manufacturing PMI dipped from 55.4 to 54.7 instead of improving to 55.6. Only the Spanish unemployment change report is due from the euro zone today and analysts are expecting to see a 120.3K drop in joblessness.

GBP

The pound chalked up losses across the board after the UK manufacturing PMI turned out weaker than expected. The reading dropped from a downgraded 56.3 figure to 54.3 instead of improving to 56.4. UK construction PMI is due today and a fall from 56 to 55 is eyed, with a weaker than expected result likely to push the UK currency much lower.

CHF

The franc gave up ground to the dollar and the comdolls but managed to hold steady versus the pound. Swiss retail sales turned out better than expected with a 0.3% year-over-year decline versus the projected 0.8% drop and the earlier 0.9% slide. There are no reports due from the Swiss economy today.

JPY

The yen resumed its slide against its counterparts as rising US bond yields drew traders away from the lower-yielding Japanese currency. The Tankan manufacturing index is up from 17 to 12 versus the consensus at 15 while the non-manufacturing index rose from 20 to 23, just a notch short of the estimate at 24. Japanese consumer confidence took a hit as the index dipped from 43.6 to 43.3. The BOJ core CPI is due today and a rise from 0.2% to 0.3% is eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a good start after China’s Caixin manufacturing PMI returned to industry expansion with a rise from 49.6 to 50.4. Canadian banks were closed for the holiday but the Loonie managed to rake in gains on higher oil prices due to the dip in US rig counts. Australian retail sales and the RBA statement are lined up next. A slower rise in consumer spending is eyed and no rate changes are expected from the Australian central bank.

By Kate Curtis from Trader’s Way

970

Forex Major Currencies Outlook (July 05, 2017)

USD

The US dollar had a mixed performance as traders were out on a Fourth of July holiday. Markets reopen today and the factory orders report is due, with analysts expecting to see a larger 0.4% decline compared to the earlier 0.2% dip. The FOMC minutes are also lined up and this should provide clues on when the Fed might hike rates next or start unwinding their balance sheet.

EUR

The euro was mostly weaker for the day after the Spanish unemployment change report fell short of estimates. Unemployment fell by 98.3K versus the projected reduction of 120.3K and the earlier 111.9K drop. Final services PMI and retail sales data are lined up today.

GBP

The pound was in a weak spot as the UK construction PMI also reflected a slowdown in industry growth just like the manufacturing sector. The reading fell from 56.0 to 54.8 versus the projected dip to 55.0. The services PMI is due today and this might have a more pronounced impact on sterling since the industry accounts for a larger chunk of overall growth. Analysts are expecting to see a drop from 53.8 to 53.6.

CHF

The franc edged slightly lower as there were no reports from the Swiss economy to keep it supported. There are still no major reports lined up today so franc price action could depend on market sentiment or on currency-specific events.

JPY

The yen was one of the weakest performers for the day as jitters over the North Korean missile test launch weighed on the Asian currency. The BOJ core CPI rose from 0.2% to 0.3% as expected. There are no reports due from Japan today but bond yields could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie extended its gains once more even as crude oil dipped and the Canadian manufacturing PMI indicated a slowdown in industry growth. Australia reported an improvement in its AIG services index from 51.5 to 54.8 while New Zealand yielded a 0.4% drop in dairy prices during the latest GDT auction. ANZ commodity prices posted a 2.1% gain, slower than the previous 2.1% rise.

By Kate Curtis from Trader’s Way

971

Forex Major Currencies Outlook (July 06, 2017)

USD

The US dollar rallied ahead of the FOMC minutes release but retreated upon seeing that committee members are still divided when it comes to their tightening and unwinding time line. Some thought that balance sheet reinvestment should start in a couple of months while others preferred waiting until later in the year or early next year. US ADP non-farm employment change data and the ISM non-manufacturing PMI are lined up today and another batch of strong readings could boost NFP expectations.

EUR

The euro was still mostly treading sideways as final services PMI readings came in mixed. Retail sales for the region came in line with expectations of a 0.2% gain. German factory orders, which could show a 1.9% rebound, and ECB minutes are due today. Any indication that the central bank is shifting to a less dovish stance could spur more gains for the shared currency.

GBP

The pound is under a bit of pressure as its services PMI came in slightly weaker than expected. The reading slipped from 53.8 to 53.4 in June, lower than the projected dip to 53.6 to reflect a slower pace of industry growth in line with the manufacturing and construction sectors. There are no major reports due from the UK today.

CHF

The franc was able to regain a bit of ground even though there were no major reports out of the Swiss economy. Today has the CPI lined up and a flat reading is eyed, slower than the earlier 0.2% uptick in price levels, but an upside surprise could mean more gains for the Swiss currency.

JPY

The yen was able to benefit from risk-off vibes in the Asian region as traders turned their attention to North Korea’s nuclear missile launch test. Although the missile landed near Japanese territory, the safe-haven currency fared better than its US counterpart as the hermit nation aims to target US soil. There were no reports out of Japan then and none are due today so market sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie returned some of its recent wins when crude oil took a large hit on ongoing tensions between Saudi and Qatar. The former previously gave a list of demands and the deadline is approaching for Qatar to comply before any further sanctions are imposed. Australia’s trade balance is coming up and a wider surplus of 1.00 billion AUD versus the earlier 0.56 billion AUD figure is expected. US crude oil inventories are also due and a 2.4 million draw is eyed.

By Kate Curtis from Trader’s Way

972

Forex Major Currencies Outlook (July 07, 2017)

USD

The US dollar returned some of its recent wins when the ISM non-manufacturing PMI’s jobs component and the ADP non-farm employment change hinted at a weaker NFP read. Although the headline reading rose from 56.9 to 57.4 to reflect stronger industry growth, the jobs index fell from 57.8 to 55.8 to reflect a slowdown. The ADP figure came in at 158K versus 184K and the earlier reading was downgraded. Analysts are expecting to see a 175K increase in hiring for the NFP and a 0.3% uptick in average hourly earnings.

EUR

The euro enjoyed a strong surge after the ECB minutes revealed that policymakers are indeed looking into policy adjustments, reviving taper talks for the central bank. German and French industrial production numbers are lined up today, along with Italian retail sales and the French trade balance, and strong readings could keep traders bullish on the shared currency.

GBP

The pound managed to hold on to its recent gains and go for more as another round of hawkish hints boosted rate hike expectations. UK manufacturing production data is due today and a 0.5% gain is eyed, higher than the earlier 0.2% uptick. Industrial production is expected to be up by 0.4%. The Halifax HPI is also due and a 0.2% uptick is expected.

CHF

The franc also regained ground against its peers as sentiment improved in the European region. Swiss CPI was actually weaker than expected with a 0.1% dip in price levels instead of the projected flat reading. Swiss jobless rate and the SNB foreign currency reserves are lined up today, and a large pickup in the latter could signal central bank intervention.

JPY

The yen had a mixed performance as it reacted to country-specific flows, giving up ground to European currencies while advancing against comdolls. There were no reports out of the Japanese currency yesterday, although it did draw safe-haven support due to the North Korean ICBM test launch. Japanese average cash earnings and leading indicators are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent gains as risk appetite took a hit. Australia’s trade balance beat expectations with a higher 2.47B AUD surplus. Crude oil ticked higher on the larger than expected draw of 6.3 million barrels in the EIA report but the Loonie was unable to hold on to its gains when the Canadian trade balance missed estimates. Underlying data did show healthy gains in imports and exports, although energy shipments were still lower. Canada’s jobs report is also due today and a slower gain of 11.4K in hiring is eyed.

By Kate Curtis from Trader’s Way

973

Forex Major Currencies Outlook (July 10, 2017)

USD

The US dollar was able to rebound against most of its counterparts on Friday thanks to stronger than expected NFP results. The report showed a 222K increase in hiring versus the projected 175K gain while the May reading was upgraded from 138K to 152K. The Fed labor market conditions index and the consumer credit report are up for release today.

EUR

The euro held on to its recent gains, buoyed by a less dovish ECB minutes that hinted at the possibility of tapering. Economic reports turned out mostly stronger than expected on Friday, led by German and French industrial production figures. Italian retail sales missed the mark but the French trade balance came in line with consensus. German trade balance and the euro zone Sentix investor confidence index are due today.

GBP

The pound took a sharp tumble when another batch of reports indicated a potential slowdown. Manufacturing production dropped by 0.2% versus the projected 0.5% uptick while industrial production slid by 0.1% instead of posting the expected 0.4% gain. There are no reports due from the UK economy today but the attention seems to be returning to Brexit talks and the UK government’s weakening position.

CHF

The franc had a strong start but gave up its gains later on in the day as safe-haven flows returned to the dollar. SNB foreign currency reserves actually ticked lower from 694 billion CHF to 693 billion CHF to signal that the central bank isn’t intervening in the currency market. There are no reports due from the Swiss economy today so market sentiment and currency-specific events could push franc pairs around.

JPY

The yen continued to slide lower against its peers, especially after the strong US NFP report revived dollar demand. Earlier today, Japanese core machinery orders and current account balance missed expectations, setting the tone for a potentially downbeat BOJ statement next week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as they continued to advance versus the yen but dipped against the dollar. Canada also printed stronger than expected jobs data as employment rose by 45.3K versus 11.4K and the unemployment rate improved from 6.6% to 6.5%. Chinese CPI and PPI are due next.

By Kate Curtis from Trader’s Way

974

Forex Major Currencies Outlook (July 11, 2017)

USD

The US dollar was stuck in consolidation against most of its peers as traders took a break after the NFP rallies. The Fed labor market conditions index dipped from 3.3 to 1.5 versus the consensus at 2.5 but still chalked up its 13th consecutive positive reading. Consumer credit also ticked higher to reflect stronger financial confidence. The NFIB small business index and JOLTS job openings data are lined up today, along with final wholesale inventories and FOMC member Brainard’s speech.

EUR

The euro gave back some of its recent wins to the Aussie and Loonie but managed to hold steady against the rest of its peers. The German trade balance widened from a surplus of 19.7 billion EUR to 20.3 billion EUR and the Sentix investor confidence index dipped from 28.4 to 28.3. Only the Italian industrial production report is due today and a 0.5% rebound is eyed.

GBP

The pound had a mixed run as it was stuck in consolidation to the dollar, euro, and yen, weaker against the Aussie and Loonie, but stronger against the Kiwi. There were no reports out of the UK economy yesterday while today saw a 1.2% rebound in the BRC retail sales monitor. MPC members Haldane and Broadbent are set to give testimonies today and hawkish remarks could lift the UK currency.

CHF

The franc weakened against most of its major counterparts as risk-taking came into play. There were no major reports out of Switzerland yesterday and none are due today so market sentiment and currency-specific action could push franc pairs around.

JPY

The yen was off to a good start but later on returned its gains to its rivals. Economic data from Japan was weaker than expected as core machinery orders slumped by 3.6% instead of posting the estimated 1.7% gain while the current account surplus fell from 1.81 trillion JPY to 1.40 trillion JPY. There are no major reports lined up from Japan today so market sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdoll group had a mixed performance, with the Aussie and Loonie raking in gains and the Kiwi giving up ground. The Canadian currency is still enjoying its gains after the strong jobs report last Friday and traders are pricing in an upbeat BOC decision later this week. Meanwhile, the Aussie shrugged off weaker than expected Chinese CPI of 1.5% versus the consensus at 1.6%. Australia’s NAB business confidence and home loans data are due next.

By Kate Curtis from Trader’s Way

975

Forex Major Currencies Outlook (July 12, 2017)

USD

The dollar was mostly lower against its peers on mixed Fed rhetoric and downbeat medium-tier data. Both final wholesale inventories and JOLTS job openings data came in below expectations. Fed Chairperson Yellen has a testimony scheduled today and market watchers are eager to find out about her views on the latest NFP report and its impact on Fed policy.

EUR

The euro surged against its peers as it served as the safe-haven in the European region. Italian industrial production came in stronger than expected at 0.7% versus the projected 0.5% uptick. German WPI and the region’s industrial production numbers are lined up today, with the former expected to show a 0.2% rebound and the latter possibly showing a 1.0% jump.

GBP

The pound was off to a good start but it wound up giving up a lot of its recent gains when MPC member Broadbent was not as hawkish as many expected. He focused more on Brexit trade risks during his speech and how it could impact costs and business activity. UK jobs data is due today and the claimant count could come in at 10.5K versus the earlier 7.3K increase. The average earnings index might slip from 2.1% to 1.8% to put more downside pressure on consumer spending.

CHF

The franc was mostly weaker against its peers even though there were no major reports out of the Swiss economy. There are still no reports lined up today so the currency could move to the tune of market sentiment and currency-specific events.

JPY

The yen was also a big loser but it managed to regain some ground to the dollar. Japanese preliminary machine tool orders surged by 31.1% on a year-over-year basis but traders are still pricing in dovish BOJ remarks for next week. The tertiary industry activity index is due today and a 0.5% decline is eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a weak start but recovered later in the day. Australia’s NAB business confidence index improved from 8 to 9 while Canada’s housing starts beat expectations at 213K. The BOC is set to make its policy decision today and hawkish remarks are eyed, although profit-taking scenarios could also come into play. US crude oil inventories data will also be released and a draw of 3.2 million barrels in stockpiles is expected.

By Kate Curtis from Trader’s Way

976

Forex Major Currencies Outlook (July 13, 2017)

USD

The US dollar gave back some of its recent gains as Yellen downplayed the strong jobs figures while acknowledging that weak inflation remains a topic of discussion. She did mention that balance sheet unwinding could begin later this year. US PPI and initial jobless claims are due next, along with another speech by Fed head Yellen.

EUR

The euro gave up ground against most of its counterparts even after the region’s industrial production report printed a stronger than expected 1.3% gain. German WPI fell flat instead of posting the projected 0.2% rebound. German and French final CPI readings are due next.

GBP

The pound enjoyed a strong rally after the UK jobs figures came in mostly stronger than expected. Claimant count rose by only 6K versus the projected 10.3K increase in joblessness while the unemployment rate improved from 4.6% to 4.5%. The average earnings index dipped from 2.1% to 1.8% as expected, upping the pressure on the BOE to act to curb overall inflation so that consumer spending can keep up. Only the BOE credit conditions survey is due next.

CHF

The franc resumed its slide against most of its counterparts even though there were no reports out of the Swiss economy. The Swiss PPI is due today and a flat reading is eyed, which would still be an improvement over the previous 0.3% decline. A stronger than expected read could revive gains for the currency while a disappointing figure could renew talks of intervention.

JPY

The yen had a mixed run as it reacted mostly to country-specific events. Data from Japan was slightly better than expected at a 0.1% dip versus the projected 0.5% drop and there are no reports due today. Risk sentiment and global bond prices could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie enjoyed a strong boost from the hawkish BOC hike as the central bank increased rates by 0.25% while signaling scope for further hikes. Policymakers judged the slowdown in inflation as a result of temporary factors and upgraded their growth forecasts for the year. China’s trade balance came in stronger than expected at a surplus of 294 billion CNY, which is positive for the Aussie and Kiwi, as well as overall risk sentiment. EIA crude oil inventories also posted a larger than expected draw of 7.6 million barrels in stockpiles.

By Kate Curtis from Trader’s Way

977

Forex Major Currencies Outlook (July 14, 2017)

USD

The US dollar was unable to establish a clear direction in trading even with several top-tier reports released. Headline PPI came in better than expected with a 0.1% uptick versus the projected flat reading while the core version of the report also showed a 0.1% increase, short of the 0.2% consensus. Initial jobless claims declined from the other week’s 250K to 247K to show positive hiring momentum. Fed head Yellen had another testimony in which she shared that the balance sheet runoff could impact the yield curve and that this, in turn, could influence their future rate adjustments. CPI readings are due today and small gains are eyed, along with June retail sales data.

EUR

The euro tossed and turned as ECB chatter pushed the shared currency around. There have been rumors that Governor Draghi will join the Jackson Hole Symposium and that he might discuss the idea of tapering stimulus then. As for data, German and French final CPI readings were unchanged and trade balance readings from Italy and the euro zone are lined up today.

GBP

The pound was able to recoup its earlier losses to the dollar, yen, and euro but was still lower against the comdolls. There were no major reports out of the UK economy yesterday, which explains the currency-specific price action of pound pairs. There are still no reports lined up from the UK today so similar price action could be seen.

CHF

The franc was one of the biggest losers in recent sessions as traders showed stronger appetite for higher-yielding currencies, leaving the SNB’s negative deposit rate less appealing. Swiss PPI also turned out weaker than expected with a 0.1% dip versus the projected flat reading. There are no reports due from the Swiss economy today.

JPY

The yen also gave up ground to most of its counterparts as risk-taking was in play. There have been no major reports out of Japan yesterday while today has the revised industrial production figure due. Apart from that, global bond yields and USD demand could also push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to chalk up gains against the rest of their peers thanks to the pickup in risk appetite. Chinese trade balance also beat expectations, sending positive prospects for its trade partners Australia and New Zealand. There are no other reports lined up from the comdoll economies for the rest of the day so risk sentiment could be the main driver of price action.

By Kate Curtis from Trader’s Way

978

Forex Major Currencies Outlook (July 17, 2017)

USD

The US dollar tumbled across the board on Friday when economic reports came in mostly weaker than expected. Headline CPI posted a flat reading instead of the estimated 0.1% uptick while the core CPI had a meager 0.1% gain instead of the estimated 0.2% increase. Headline and core retail sales were down 0.2% while preliminary UoM consumer sentiment also fell short of estimates. Only the Empire State manufacturing index is due today and a fall from 19.8 to 15.2 is expected.

EUR

The euro had a mixed round as it regained ground to the dollar and yen but caved to the pound and commodity currencies. Economic data came in mixed as the Italian trade balance beat expectations but the region’s reading fell short. Euro zone final CPI readings are lined up today and traders are not expecting any revisions.

GBP

The pound was able to stay afloat on Friday even though there were no major reports out of the UK. Prior to this, UK jobs data beat expectations but wage inflation indicated weakness, possibly upping the pressure on the BOE to act. There are no major reports due today but traders might start pricing in expectations for the UK CPI report.

CHF

The franc weakened against its peers as risk appetite stayed in play. There were no reports out of the Swiss economy then and none are due today, so market sentiment could keep pushing franc pairs around.

JPY

The yen was able to regain some ground against the dollar but was in a weak spot to its peers leading up to this week’s BOJ decision. Japan’s industrial production figure was downgraded to show a larger 3.6% slide versus the initially reported 3.3% drop. Japanese banks are closed for the holiday today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar weakness once more as risk appetite stayed in play. Chinese reports are up for release today, with slight dips in GDP, retail sales, and fixed asset investment eyed. Industrial production is estimated to hold steady at 6.5%. New Zealand will be printing its Q2 CPI as well and analysts are expecting to see a 0.2% increase, much slower than the earlier 1.0% gain.

By Kate Curtis from Trader’s Way

979

Forex Major Currencies Outlook (July 18, 2017)

USD

The dollar managed to edge slightly higher even though data came in weaker than expected. The Empire State manufacturing index fell from 19.8 to 9.8 to indicate a slower pace of industry growth compared to the projected dip to 15.2. Only the US import prices report is due today and a 0.2% drop is eyed, smaller than the earlier 0.3% decline.

EUR

The euro was able to hold its ground as the return of Brexit concerns in the UK drove safe-haven demand for the shared currency. Final CPI readings were unchanged at 1.3% for the headline reading and 1.1% for the core figure. The German ZEW economic sentiment index is due next and a dip from 18.6 to 17.8 is expected. The region’s ZEW index is slated to fall from 37.7 to 37.2.

GBP

The pound was in a weak spot once more as Brexit negotiations took place. UK CPI is up for release today, with the headline figure projected to hold steady at 2.9% while the core reading could also stay unchanged at 2.6%. PPI input prices could chalk up a 0.8% decline while the output price could see a meager 0.1% uptick. BOE Governor Carney has a speech as well so it could bring more volatility for pound pairs.

CHF

The franc regained some ground against its peers as risk-off flows returned. There were no reports out of the Swiss economy yesterday and none are due today so risk sentiment could keep pushing franc pairs around.

JPY

The yen was able to get back on its feet when risk-taking paused in the latter trading sessions. Japanese banks were closed for the holiday yesterday and there are no reports due today so risk sentiment could still be in the driver’s seat.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a strong start when China printed upbeat data. GDP rose by 6.9% instead of showing the slower 6.8% consensus while retail sales and industrial production reflected strong domestic demand. However, the Kiwi returned its gains when New Zealand’s quarterly CPI posted a flat reading instead of the projected 0.2% gain. RBA minutes are due next and New Zealand will have its GDT auction in the next Asian session.

By Kate Curtis from Trader’s Way

980

Forex Major Currencies Outlook (July 19, 2017)

USD

The dollar was dragged lower by the healthcare bill setback in Senate. As it turns out, at least three Republicans are set to vote against the bill, along with Democrat lawmakers. This reminded market watchers of the lack of progress in terms of fiscal policy, which means that tax reform could be pushed back much later. As for data, import prices posted the 0.2% dip as expected and the NAHB housing market index dipped from 66 to 64 instead of improving to 67. US housing starts and building permits are lined up next.

EUR

The euro regained some ground against its counterparts as risk appetite took a hit on Tuesday. Economic data from the region was actually weaker than expected as the German ZEW index slipped from 18.6 to 17.5 versus the 17.8 forecast while the region’s ZEW is down from 37.7 to 35.6 to reflect weaker optimism. There are no major reports due from the euro zone today, leaving traders to price in expectations for the ECB statement tomorrow.

GBP

The pound was one of the weakest performers for the day as UK inflation readings fell short. Headline CPI is down from 2.9% to 2.6% while core CPI dropped from 2.6% to 2.4%, lessening pressure on the central bank to tighten monetary policy. There are no reports due from the UK today.

CHF

The franc was able to regain some ground as risk aversion popped back in the financial markets. There were no reports out of the Swiss economy then and none are due today so market sentiment could continue to push franc pairs around.

JPY

The yen regained some ground on risk appetite and dollar weakness. There were no reports out of Japan yesterday and none are due today so market sentiment could stay in play or traders might start pricing in expectations for the upcoming BOJ decision.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was on stronger footing after the release of the RBA minutes as policymakers didn’t sound as dovish as some expected. Instead, the central bank struck a neutral tone and signaled less preference for rate cuts than before. New Zealand reported a 0.2% uptick in dairy prices during the latest GDT auction while the API reported a surprise build in inventories. US crude oil stockpiles data from the EIA is due today and analysts are hoping to see a 3.6M reduction.

By Kate Curtis from Trader’s Way

981

Forex Major Currencies Outlook (July 20, 2017)

USD

The US dollar had a mixed run as it mostly functioned as a counter currency. Data was stronger than expected, with building permits up from 1.17M to 1.25M and housing starts up from 1.12M to 1.22M. Initial jobless claims and the Philly manufacturing index, which could dip from 27.6 to 23.4, are due next.

EUR

The euro returned some of its recent gains as traders are reducing their exposure to the ECB monetary policy statement. No actual rate changes are eyed but traders are hoping to hear more hints of tapering from Governor Draghi. He did drop some upbeat remarks during his previous testimonies but policymakers cautioned that markets may have misinterpreted these comments. German PPI and euro zone current account balance is also eyed.

GBP

The pound is in a weak spot due to Brexit concerns and weak CPI data, which has lowered BOE rate hike expectations. There have been no reports out of the UK economy yesterday while today has the retail sales report due. A 0.4% rebound over the previous 1.2% decline is eyed but another drop could remind traders that consumer spending is reeling from higher price levels.

CHF

The franc remained in a weak spot against its rivals on resurfacing jitters in the European region. There were no reports out of the Swiss economy yesterday while today has the trade balance on tap. A narrower surplus of 2.89 billion CHF is eyed compared to the previous 3.40 billion CHF figure.

JPY

The yen regained a bit of ground as traders liquidated some of their short holdings ahead of the BOJ decision. No actual policy changes are eyed but dovish remarks or jawboning could push the yen lower once more. However, a neutral stance could lead to some gains for the Japanese currency. Earlier today, the trade balance was printed and a lower surplus of 0.08T JPY was seen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold on to most of their recent gains as EIA crude oil stockpiles posted a larger than expected draw of 4.7 million barrels. This marks the third consecutive weekly drop in inventories so global oversupply concerns appear to be easing. Australia is set to report is jobs figure next and a 14.4K gain in hiring is eyed.

By Kate Curtis from Trader’s Way

982

Forex Major Currencies Outlook (July 21, 2017)

USD

The dollar is still being bogged down by issues surrounding the Trump administration, from the failure to pass the Obamacare repeal in Senate to the ongoing investigation into Trump’s dealings with Russia. Lead investigator Mueller said that they will be looking into the President’s business transactions with Russians in the past. Data from the US was mostly stronger than expected as initial jobless claims and the CB leading index beat forecasts, but the Philly Fed index chalked up a steeper fall from 27.6 to 19.5. There are no reports due from the US economy today.

EUR

The euro started edging lower ahead of the ECB decision as traders reduced their exposure to the event but the shared currency regained ground even after Governor Draghi dropped dovish remarks. The ECB Governor acknowledged that growth is picking up but that this has yet to translate to stronger inflation, which he also mentioned isn’t quite up to the level for them to start discussing tapering. There are no reports due from the euro zone today, so traders could keep pricing in their reaction that it’s only a matter of time before the ECB reduces asset purchases.

GBP

The pound was still in a weak spot even though the UK reported stronger than expected retail sales for June. Consumer spending rebounded by 0.6% while the previous figure enjoyed a small upgrade from an initially reported 1.2% slump to just 1.1%. Only the UK public sector net borrowing report is due today but the focus could remain on how shaky the economy is looking with Brexit discussions ongoing.

CHF

The franc gave up ground to most of its peers as traders flocked back to the euro instead. Also, Swiss trade balance turned out weaker than expected with a surplus of 2.81 billion CHF versus the projected 2.89 billion CHF figure and the earlier 3.39 billion CHF reading. There are no reports due from the Swiss economy today.

JPY

The yen got back on its feet against some of its peers as the BOJ refrained from dropping more dovish remarks in their statement. The central bank did scale back its CPI forecast but this barely drew bears back in. There are no reports due from the Japanese economy today so risk sentiment and reactions to USD movements could stay in play.

Commodity Currencies Outlook (AUD, NZD, CAD)

The comdolls had a mixed round as they returned some of their gains to the euro and yen while advancing to other counterparts. Australia’s jobs report was slightly weaker than expected with a 14K gain in June and a downgrade in the May figure. Canada has its CPI and retail sales figures up for release next and strong readings could reinforce BOC hike expectations. RBA policymakers Debelle and Bullock are set to give speeches as well.

By Kate Curtis from Trader’s Way

983

Forex Major Currencies Outlook (July 24, 2017)

USD

The US dollar remains in a weak spot leading up to this week’s FOMC statement. No actual rate changes are expected but traders are expecting a less upbeat outlook and some more details on when the balance sheet runoff might start. There were no reports out of the US on Friday while today has flash manufacturing and services PMIs on tap.

EUR

The euro held on to its gains versus the dollar but retreated to the yen on lack of BOJ dovishness. There were no major reports out of the euro zone on Friday while today has the flash manufacturing and services PMI readings from the top economies. Stronger than expected data could confirm that it’s only a matter of time before the ECB tapers asset purchases.

GBP

The pound was one of the weakest performers as downbeat CPI weighed on BOE rate hike prospects even as UK retail sales beat expectations. Public sector borrowing was also weaker than expected. There are no reports due from the UK economy today.

CHF

The franc had a mixed round as it mostly reacted to currency-specific factors. There were no reports out of the Swiss economy on Friday and none are due today so market sentiment could keep pushing franc pairs around.

JPY

The yen advanced on the lack of BOJ dovishness in their policy statement earlier in the week and on expectations of a more cautious FOMC statement this week. There were no reports out of Japan on Friday while today has the flash manufacturing PMI. A dip from 52.4 to 52.2 was reported for July, lower than the estimated drop to 52.3.

Commodity Currencies (AUD, NZD, CAD)

The comdolls broke higher to the US dollar but gave up some ground to the Japanese yen. Data from Canada turned out mixed as the core retail sales figure missed expectations while the headline figure printed a 0.6% gain, outpacing the 0.3% consensus. Headline CPI came in line with expectations of a 0.1% dip. Only the Canadian wholesale sales report is due today.

By Kate Curtis from Trader’s Way

984

Forex Major Currencies Outlook (July 25, 2017)

USD

The US dollar drew a bid in the latest New York session upon seeing slightly stronger than expected flash PMI readings. The flash manufacturing PMI is up from 52.0 to 53.2, higher than the forecast at 52.3, while the services PMI held steady from an upgraded 54.2 figure. Existing home sales printed a dip to 5.52M. The CB consumer confidence index is due today and a fall from 118.9 to 116.5 is expected.

EUR

The euro was unable to sustain its climb when euro zone PMI readings fell short of estimates, with the exception of the French flash manufacturing PMI. The German Ifo business climate index is lined up today and a dip from 115.1 to 114.9 is expected. Another weak result could continue to dampen ECB tapering expectations.

GBP

The pound managed to regain some ground, despite the lack of top-tier data from the UK. Today has the CBI industrial order expectations figure lined up, which could fall from 16 to 12, along with a speech by BOE MPC member Haldane who might reiterate his dovish views.

CHF

The franc had a mixed performance as it mostly reacted to its counterparts. There were no reports out of the Swiss economy yesterday to give the currency a strong direction anyway, and there are still no reports due today so market sentiment could push franc pairs around.

JPY

The yen gave up some ground when the dollar recovered upon seeing upbeat medium-tier data. Traders had been buying up the Japanese currency leading up to the FOMC statement in anticipation of less hawkish remarks, but the latest batch of PMI reports gave hope that the Fed could maintain its rate hike timeline. The BOJ minutes were released but failed to spur volatility for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was one of the biggest winners for the day as the pickup in crude oil boosted the Canadian currency. After the OPEC meeting with non-OPEC members like Russia, Saudi Arabia pledged that they will push for significant measures to boost the commodity price. Nigeria also made an informal pledge to keep their production levels limited. New Zealand’s trade balance is due next, along with a speech by RBNZ policymaker McDermott.

By Kate Curtis from Trader’s Way

985

Forex Major Currencies Outlook (July 26, 2017)

USD

The US dollar drew a strong boost from news that the Senate has voted to open the debate on healthcare reform. VP Mike Pence broke the tie and opened the floor for amendments on the current bill, reviving hope that the Trump administration could make progress in its fiscal agenda. Economic data also came in strong ahead of today’s FOMC decision, which might shed more light on the Fed’s balance sheet runoff timing and the odds of another rate hike in September or December.

EUR

The euro held steady against most of its counterparts as data came in mixed. The German Ifo business climate index rose from 115.2 to 116.0 to reflect improving conditions versus the projected dip to 114.9. However, German import prices chalked up a steeper than expected 1.1% slide instead of the estimated 0.7% dip to signal weaker price pressures. There are no major reports due from the euro zone today.

GBP

The pound enjoyed a bit of a boost ahead of BOE member Haldane’s speech as many expected him to shift to a less dovish stance. UK CBI industrial order expectations fell from 16 to 10 versus the projected reading at 12. The UK preliminary GDP reading is due next and a slightly stronger than expected growth figure of 0.3% is eyed versus the earlier 0.2% uptick.

CHF

The franc had a mixed performance as it reacted mostly to currency-specific factors on the lack of top-tier data from Switzerland. Today has the UBS consumption indicator and the Credit Suisse Economic Expectations index on tap, and improvements could shore up the franc while weak figures could lead to declines.

JPY

The yen gave up ground to most of its peers, owing to the strength in the US dollar. Traders continue to price in positive expectations for the FOMC statement, which is driving bond yields higher and leading to weaker demand for the lower-yielding yen.

Commodity Currencies (AUD, NZD, CAD)

The Loonie scored another round of gains after the API report revealed a much larger than expected draw in stockpiles, easing oversupply concerns and lifting expectations for the EIA report. This is expected to report a draw of 3.3 million barrels in stockpiles. New Zealand reported a larger than expected trade surplus of 242M NZD versus the projected 147M NZD figure and the earlier 74M NZD surplus. Australia’s headline CPI missed the mark with a 0.2% uptick versus the expected 0.4% increase but the core reading came in line with consensus at 0.5%.

By Kate Curtis from Trader’s Way

986

Forex Major Currencies Outlook (July 27, 2017)

USD

The US dollar advanced on positive expectations for the FOMC but soon gave up its gains and more when the statement disappointed. Instead of giving more details on their balance sheet reinvestment, the Fed simply said that the runoff would start “relatively soon.” Market participants also noted a slight downgrade in inflation assessment from “declined recently” to “declined” and “running below 2%”. US durable goods orders data is due next and weaker than expected reports could continue to dampen Fed rate hike hopes.

EUR

The euro took advantage of dollar weakness but was still in a weak spot against the commodity currencies. There were no major reports out of the euro zone yesterday, which explains the shared currency’s lack of direction. The Spanish unemployment rate and the German GfK consumer climate index are due today, with the latter expected to tick higher from 10.6 to 10.7.

GBP

The pound was able to hold its ground when the UK GDP reading came in line with estimates of 0.3% growth versus the previous 0.2% expansion for Q2. Components showed declines in industrial production and construction while the services sector posted 0.5% growth. CBI realized sales data is due today and a fall from 12 to 10 is expected.

CHF

The franc was mostly weaker against its peers, except against the dollar, even though data turned out stronger than expected. The UBS consumption indicator rose from 1.32 to 1.38 while the Credit Suisse Economic Expectations index surged from 20.7 to 34.7. There are no reports due from the Swiss economy today.

JPY

The yen was able to take advantage of dollar weakness but still chalked up losses to the commodity currencies. There were no major reports out of Japan but it looks like risk-taking had been in play and weighed on the lower-yielding currency. There are still no reports due from Japan today so market sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly stronger against their peers, led by the Loonie which drew a strong boost from crude oil. The EIA reported a draw of 7.2 million barrels in stockpiles versus the projected reduction of 3.3 million barrels, marking a full month in falling inventories. Australian import prices data are due next and a weaker 0.7% uptick is eyed compared to the earlier 1.2% gain.

By Kate Curtis from Trader’s Way

987

Forex Major Currencies Outlook (July 28, 2017)

USD

The US dollar bounced back from its FOMC tumble when some medium-tier reports beat expectations. Headline durable goods orders jumped 6.5% versus the projected 3.5% increase while core durable goods was slightly weaker at 0.2% versus 0.4%. The goods trade balance showed a narrower deficit to indicate stronger export activity and a positive contribution to GDP. The advance GDP reading is due later today and a 2.5% expansion is eyed, stronger than the previous 1.4% growth figure.

EUR

Economic data from the euro zone turned out slightly weaker than expected, keeping ECB tapering expectations in play. The German GfK consumer climate index climbed from 10.6 to 10.8, higher than the projected rise to 10.7, while the Spanish unemployment rate improved from 18.8% to 17.2%. French flash GDP, German preliminary CPI, Spanish flash CPI and GDP are all lined up today.

GBP

The UK printed mixed economic reports, with the CBI realized sales index climbing from 12 to 22 instead of dipping to 10 and the GfK consumer confidence index slipping from -10 to -12 instead of improving to -11. There are no reports due from the UK economy today so the pound could take its cue from market sentiment and Brexit updates.

CHF

The franc had a mixed run as it reacted mostly to currency-specific events but it was mostly lower on potential SNB intervention. The KOF economic barometer is up for release today and a rise from 105.5 to 105.9 is expected, possibly renewing some support for the Swiss currency.

JPY

The Japanese yen gave up some ground as dollar demand returned in anticipation of an upbeat advance GDP reading. Earlier today, data from Japan turned out mostly stronger than expected, renewing support for the currency. National core CPI posted a 0.4% gain as expected while the Tokyo core CPI rose by 0.2% versus the estimated 0.1% uptick. The unemployment rate improved from 3.1% to 2.8% and household spending rebounded by 2.3%. Retail sales, however, fell short at a 2.1% year-over-year gain.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to hold on to their recent gains as a bit of risk aversion and profit-taking materialized. Australian import prices dropped 0.1% instead of posting the projected 0.7% gain in Q2. The Loonie was also bogged down by talks of how the Canadian government wasn’t too pleased about the BOC hike. The Canadian monthly GDP is due next and another 0.2% uptick is eyed.

By Kate Curtis from Trader’s Way

988

Forex Major Currencies Outlook (July 31, 2017)

USD

The US dollar regained some ground to its peers on Friday when GDP data beat expectations. The advanced reading for Q2 showed a 2.6% growth figure versus the projected 2.5% expansion. However, the price index and employment cost index both came short of estimates. Chicago PMI and pending home sales are due today.

EUR

Euro zone data turned out mixed on Friday as German and French preliminary CPI beat expectations while French consumer spending fell short. Euro zone flash CPI readings are due today, with the headline figure projected to hold steady at 1.3% and the core reading projected to stay unchanged at 1.1%. German retail sales is also due and a meager 0.1% uptick is eyed.

GBP

There were no reports released out of the UK economy on Friday. Only the net lending to individuals and mortgage approvals data are lined up today so there might not be much volatility for pound pairs unless traders start pricing in expectations for the BOE decision later in the week.

CHF

Switzerland printed stronger than expected economic data on Friday, with the KOF economic barometer up from 105.8 to 106.8 versus the projected 105.9 reading. There are no major reports due from the Swiss economy today so the franc could move according to market sentiment or SNB intervention threats.

JPY

Japanese reports turned out mostly stronger than expected on Friday, except for the retail sales reading which came in at 2.1% versus 2.3%. Household spending jumped 2.3% year-over-year versus the estimated 0.6% uptick while the Tokyo core CPI showed a 0.2% gain versus the estimated 0.1% increase. Earlier today, the preliminary industrial production report showed a 1.6% rebound as expected.

Commodity Currencies (AUD, NZD, CAD)

Canada’s monthly GDP reading showed 0.6% growth, stronger than the projected 0.2% uptick. Over the weekend, New Zealand reported a 1.0% drop in building consents. China’s official manufacturing PMI dipped from 51.7 to 51.4 while the non-manufacturing component fell from 54.9 to 54.5. New Zealand reported a dip in ANZ business confidence from 24.8 to 19.4.

By Kate Curtis from Trader’s Way