Forex Major Currencies Outlook (Sep 20, 2017)
The dollar was one of the weaker currencies for the day even as data came in better than expected. Building permits came in at 1.30 million versus the 1.22 million consensus while housing starts fell from 1.19 million to 1.18 million, still higher than the estimate at 1.17 million. Import prices rose 0.6% versus the estimated 0.4% uptick. The dollar's dip was likely due to profit-taking ahead of the FOMC decision as many are anticipating to see downgrades in growth forecasts on account of the recent hurricanes.
The euro managed to stay in the green, except against the Aussie and Kiwi, as data turned out strong. The current account surplus grew from 22.8 billion EUR to 25.1 billion EUR while the German ZEW economic sentiment index rose from 10 to 17, outpacing the consensus at 12.3. The region's ZEW figure rose from 29.3 to 31.7, just short of the 32.4 consensus. Only the German PPMI is due today and a 0.1% uptick is eyed.
The pound had a mixed run as it seemed to get pushed around by its counterparts on the lack of top-tier UK data. Retail sales is due next and a 0.2% uptick is expected, slightly lower than the earlier 0.3% gain. Stronger than expected results could revive BOE rate hike hopes, although the rally could be subdued after Carney previously mentioned that they're hiking was mostly due to the rise in global interest rates.
The franc was in a weak spot as risk appetite was present in the markets and there were no major reports out of the Swiss economy. The SNB Quarterly Bulletin is up for release today but this doesn't normally lead to big moves for the Swiss currency, leaving it sensitive to market sentiment once more.
The yen also gave up some ground on risk-taking and the lack of top-tier reports to keep it supported. Traders are also likely adjusting their positions ahead of the BOJ decision this week. For today, the trade balance is due and a 0.41 trillion JPY surplus is eyed, up from the earlier 0.32 trillion JPY reading.
Commodity Currencies (AUD, NZD, CAD)
The Aussie and Kiwi were mostly in the lead as the RBA minutes didn't turn out too downbeat while the GDT auction yielded a 0.9% gain in dairy prices. New Zealand's current account balance is due next and a deficit of 0.82 billion NZD is eyed after the earlier surplus of 0.24 billion NZD. Canadian manufacturing sales sank 2.6% versus the projected 1.7% drop. New Zealand's quarterly GDP is due in the next Asian session and a 0.8% growth figure is eyed.
By Kate Curtis from Trader's Way