Daily Market Outlook by Kate Curtis from Trader's Way

Commercial Content Analysts
1009

Forex Major Currencies Outlook (Sep 05, 2017)

USD

US banks were closed on Labor Day Monday so markets were off to a slow start. The US currency did stay supported even with rising tensions with North Korea as the White House issued a statement reiterating that the government has plenty of options on the table. Headlines of another hurricane about to hit the US could keep a lid on equity and dollar gains but today’s set of FOMC speaker could push the currency around.

EUR

The euro struggled to stay afloat as data came in mixed. Spain’s unemployment change turned out weaker than expected with a 46.4K increase in joblessness versus the projected 16.3K rise. Meanwhile, the Sentix investor confidence index rose from 27.7 to 28.2 versus the consensus at 27.4. Final services PMI and euro zone retail sales are due today.

GBP

The pound staged a sharp selloff around the end of the US session likely due to reports that Norway is investing more in the UK economy, something that investors thought might be the wrong move. UK construction PMI was weaker than expected at 51.1 versus the consensus at 52.1 and the earlier 51.9 figure. Services PMI is due today and a dip from 53.8 to 53.5 is eyed.

CHF

The franc was able to chalk up more gains across the board on risk-off flows. There were no reports out of the Swiss economy yesterday while today has GDP and CPI on tap. Analysts expect the economy to have expanded by 0.5% in Q2, stronger than the earlier 0.3% growth figure. CPI is expected to stay flat after previously recording a 0.3% dip.

JPY

The yen also raked in gains on risk aversion stemming from renewed tensions with North Korea. There were no major reports out of Japan yesterday while today also has an empty economic calendar, leaving market sentiment to be the main driver of price action.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies had a mixed run as they were pushed and pulled by market sentiment. Data from Australia was mixed, with company operating profits down 4.5% in Q2 and job advertisements up 2.0% versus the earlier 1.6% gain. Australia also reported a drop in its AIG services index from 51.9 to 51.1. The RBA decision is coming up next but no actual rate changes are expected. New Zealand will have its GDT auction in the next Asian session.

By Kate Curtis from Trader’s Way

1010

Forex Major Currencies Outlook (Sep 11, 2017)

USD

The dollar pulled off Friday with some gains on profit-taking while medium-tier reports came in mixed. Final wholesale inventories rose 0.6% versus the projected 0.4% uptick while consumer credit rose from 11.8B USD to 18.5B USD versus the consensus at 15.1B USD. There are no reports due from the US today so traders would likely keep close tabs on the impact of Hurricane Irma on US markets and other political updates.

EUR

The euro had a mixed run at the end of the week as traders booked profits off the post-ECB rallies while medium-tier data came in mostly in line with expectations. Only the German trade balance was a disappointment as the surplus narrowed from 21.2B EUR to 19.5B EUR. French industrial production rose 0.5% as expected. Italian industrial production data is due today and a 0.5% dip is eyed.

GBP

The pound ended Friday on a positive note as data came in mostly stronger than expected. Manufacturing production rose 0.5% versus the 0.3% forecast while industrial production posted the estimated 0.2% uptick. The goods trade deficit came in at 11.6 billion GBP versus the projected 11.9 billion GBP shortfall. There are no reports due from the UK economy today.

CHF

The franc was in consolidation mode at the end of the week as the Swiss jobless rate came in line with expectations at 3.2%. There wasn’t much in the way of catalysts for risk sentiment either, so traders likely held off any large positions in anticipation of potential weekend risk. There are no reports due from Switzerland today.

JPY

The yen scored some gains on Friday but gapped down against its peers over the weekend on the lack of any negative updates from North Korea. The situation is still fluid, though, and traders are awaiting another round of sanctions and Pyongyang’s reaction. Japan’s final GDP reading was downgraded from 1.0% to 0.6%. Core machinery orders, preliminary machine tool orders, and tertiary industry activity index are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent gains on profit-taking at the end of the previous week since traders likely lightened their risk-on holdings to avoid weekend risk. Canada’s headline jobs figures came in better than expected at 22.2K in hiring gains but this was mostly due to part-time positions. Over the weekend, China printed stronger than expected CPI and PPI. Canada’s housing starts is due next.

By Kate Curtis from Trader’s Way

1011

Forex Major Currencies Outlook (Sep 12, 2017)

USD

The US dollar was able to start the week on a good note on easing geopolitical tensions and the weakening Hurricane Irma. Officials have reportedly scaled down their sanctions on the hermit nation in order to get the vote from China and Russia, but this could still be met with actual strikes from North Korea based on their foreign ministry’s statements. There have been no reports out of the US economy but the upbeat stock market performance has lifted the dollar. Only the NFIB Small Business Index and JOLTS job openings are due from the US today.

EUR

The euro retreated against some of its peers as traders appear hesitant to take the shared currency any higher without fresh catalysts. Italy’s industrial production report was stronger than expected with a 0.1% uptick instead of the estimated 0.5% decline. French final non-farm payrolls for Q2 and the Italian quarterly unemployment rate are lined up next.

GBP

The pound had a quiet start to the trading week as traders are positioning ahead of the top-tier events. UK CPI is up for release next and both headline and core CPI could post stronger price pressures, which might then revive expectations of an upbeat BOE statement later in the week. Headline CPI could advance from 2.6% to 2.8% while the core reading could tick up from 2.4% to 2.5%.

CHF

The franc returned some of its recent gains as risk appetite improved and traders lightened up on their lower-yielding holdings. There were no reports out of the Swiss economy on Monday and none are due today so market sentiment could be the primary driver of franc price action.

JPY

The yen was one of the biggest losers so far in the week as improving risk appetite led traders to dump the lower-yielding currency. Data from Japan was mixed, with core machinery orders up 8.0% versus the 4.2% forecast and tertiary industry activity up 0.1% as expected. Preliminary machine tool orders rose 36.3% on a year-over-year basis. There are no reports due from Japan today so risk sentiment could be key.

Commodity Currencies (AUD, NZD, CAD)

The Loonie had another big win as rumors of another OPEC extension were floated after Saudi Arabia’s energy minister met with his counterparts in Venezuela, UAE, and Kazakhstan. Canadian housing starts also turned out better than expected, rising from 222K to 223K instead of declining to the estimated 216K figure. Australia’s NAB business confidence index is due next.

By Kate Curtis from Trader’s Way

1012

Forex Major Currencies Outlook (Sep 13, 2017)

USD

The US dollar scored another day in the green as upbeat stock market performance on tax reform remarks and easing concerns about North Korea was the main driver. Medium-tier reports also turned out stronger than expected, with the NFIB Small Business index posting a surprise uptick and the JOLTS job openings figure for July hinting at more hiring growth down the line. US PPI numbers are due today and the headline figure could show a 0.3% rebound while the core reading could see a 0.2% uptick.

EUR

The euro had a mixed run as it mostly reacted to its counterparts. Data was mixed, with French private payrolls falling short of the estimated 0.5% gain and printing a 0.4% increase while the Italian quarterly jobless rate improved to 11.2% versus the 11.3% consensus. German final CPI and WPI are up for release next.

GBP

The pound enjoyed a strong kick higher when the UK printed higher than expected inflation reports. Headline CPI jumped from 2.6% to 2.9% versus the 2.8% consensus while core CPI rose from 2.4% to 2.7%. Underlying inflation figures also beat expectations, reviving hopes that the BOE could consider hiking interest rates in their upcoming statement. But before that, the UK jobs report is up for release next and a 0.8K increase in claimants is eyed. The average earnings index could recover from 2.1% to 2.3%.

CHF

The franc gave up more ground to most of its peers as risk-taking was in play. There were no reports to keep the franc supported in earlier sessions while today has the PPI lined up. Analysts are expecting to see a 0.2% increase after the previous flat reading, but downbeat data could keep traders wary of SNB jawboning in their statement later this week.

JPY

The yen was also in the red as risk appetite led traders to dump lower-yielding currencies. There were no reports from Japan then and today has the BSI manufacturing index and PPI on the docket. The former could show an improvement from -2.9 to +4.8 while the latter could rise from 2.6% to 3.2%.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to put up a fight against the dollar on risk-taking, with the Kiwi leading the pack on easing political uncertainty ahead of the elections. A poll revealed that the Green Party might not end up with enough votes to secure a seat in parliament, which might leave the National Party to run off with a majority. In Australia, the NAB business confidence index fell from 12 to 5 and the Westpac consumer sentiment index is due next. Both the EIA and OPEC downgraded oil demand forecasts for this year, with the latter reporting weaker compliance in its output deal for August.

By Kate Curtis from Trader’s Way

1013

Forex Major Currencies Outlook (Sep 14, 2017)

USD

The US dollar gained more momentum on its recent rally, closing out another day in the green. PPI readings actually came in slightly weaker than expected at a 0.2% gain for the headline reading and a 0.1% uptick for the core figure, but this still kept bulls hopeful for an upbeat CPI result later this week. Apart from that, sustained focus on tax reform and small steps in the right direction in the absence of North Korean provocations have also allowed the US currency to edge higher. Headline CPI could show a 0.3% gain while the core reading could show a 0.2% uptick today.

EUR

The euro was also able to hold on to some of its gains thanks to mostly upbeat medium-tier data from the region. German final CPI was unchanged at 0.1% as expected but the WPI printed a higher 0.3% rebound versus the projected 0.1% uptick and the earlier 0.1% dip. The euro zone quarterly employment change report printed a 0.4% gain versus the projected 0.3% increase. Euro zone industrial production was up 0.1% as expected and the only report due today is the French final CPI reading.

GBP

The pound struggled to establish a clear direction as it was bogged down by some misses in the UK jobs report. Although the claimant count fell by 2.8K instead of increasing by 0.8K, the earlier figure was revised to show a larger 2.9K drop while the average earnings index didn’t budge from 2.1% instead of advancing to the estimated 2.3% figure. Still, the unemployment rate improved from 4.4% to 4.3%. The BOE decision is due today and a hawkish tilt is expected after seeing the upbeat CPI figures earlier in the week.

CHF

The franc resumed its slide to its peers as risk appetite extended its stay in the financial markets. Swiss PPI was actually better than expected at 0.3% versus the projected 0.2% uptick, but traders seem to be wary of additional SNB jawboning in their upcoming monetary policy announcement.

JPY

The yen continued to give up ground on improving market sentiment and dollar strength. Data from Japan was better than expected as the BSI manufacturing index jumped from -2.9 to +9.4, outpacing the consensus at +4.8. Only the revised industrial production report is due from Japan today and no changes from the initial -0.8% reading is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Loonie had another positive day as the oil-related currency managed to shrug off the buildup in stockpiles as reported by the EIA and API. OPEC reported weaker compliance in its output deal for the month of August but saw production fall by 79K barrels per day in the same month. Australia’s jobs report is due next and a 17.5K increase in hiring is eyed, lower than the earlier 27.9K figure. Chinese data could also push comdolls around as industrial production and retail sales are expecting gains.

By Kate Curtis from Trader’s Way

1014

Forex Major Currencies Outlook (Sep 15, 2017)

USD

The US dollar carried on with its rally, supported by stronger December Fed rate hike odds after seeing the upbeat headline CPI figure. The reading climbed from 0.1% to 0.4% versus the 0.3% consensus while the core version of the report came in line with expectations of a 0.2% uptick. Retail sales data is due next and the headline figure could show a 0.1% uptick while the core reading could come in at 0.5%.

EUR

The euro gave up some ground to its counterparts as traders flocked to the dollar, pound, and Swiss franc. There were no major reports out of the euro zone but its usual rivals drew more investor attention and led to some unwinding in long positions. Only the region’s trade balance is due today and a narrower surplus of 20.3 billion EUR is eyed.

GBP

The pound got a strong boost from a hawkish BOE statement, even though the central bank refrained from hiking in a 2-7 vote. Majority of members saw scope for reducing stimulus in the coming months, fueling expectations that a rate increase would happen before the end of the year. The central bank also projected that inflation could overshoot their 2% target and come in at 3% next month, supporting the case for tightening. Only the BOE Quarterly Bulletin and CB leading index are lined up today.

CHF

The franc enjoyed a bit of support after the SNB signaled that the franc was no longer as overvalued as it used to be. SNB head Jordan did reiterate that currency intervention remains an option but traders judged that it wasn’t such an urgent matter now that the euro is strengthening against the Swiss currency on taper expectations.

JPY

The yen regained some lost ground on rumors that North Korea is gearing up for another test of a missile, which might be an ICBM this time. Japan’s industrial production was kept unchanged at -0.8% as expected and there are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly lower for the day as risk-off vibes appeared to be creeping in. The Kiwi was the weakest of the bunch as it reacted the most to downbeat data from China. Australia printed stronger than expected jobs figures while the Loonie drew some support from oil price gains. New Zealand is set to print its Business NZ manufacturing index next.

By Kate Curtis from Trader’s Way

1015

Forex Major Currencies Outlook (Sep 18, 2017)

USD

The dollar was mostly weaker against its peers on Friday as economic reports disappointed. Headline retail sales slipped 0.2% instead of posting the estimated 0.1% uptick while the core version of the report indicated a smaller than expected 0.2% gain versus the 0.5% consensus. Industrial production and capacity utilization also disappointed while the preliminary UoM consumer sentiment index dipped to 95.3. Only a couple of medium-tier reports are lined up today, keeping traders’ attention on the North Korea situation and more updates on tax reform.

EUR

The euro had a mixed run as it reacted mostly to currency-specific events. The region’s trade surplus was below consensus at 18.6 billion EUR versus 20.1 billion EUR while the previous reading was downgraded to 21.7 billion EUR. Final CPI readings and the Italian trade balance are up for release today.

GBP

The pound got another boost on Friday and carried on with its post-BOE rally when MPC member Vlieghe refrained from jawboning the currency. He signaled a shift from his usual dovish tone to a more hawkish bias, leading many to speculate that it’s only a matter of time before the central bank hikes rates. Earlier today, the Rightmove HPI showed a 1.2% drop in house prices.

CHF

The Swiss franc also had a mixed performance as the lower-yielding currency mostly reacted to its counterparts and was also hit by some profit-taking at the end of the week. There were no major reports out of the Swiss economy on Friday and none are due today so the week could be off to a slow start for franc pairs.

JPY

The yen lost ground to most of its peers as bulls now seem to be worried about the potential repercussions of a North Korean missile strike on the Japanese economy. Traders also lightened up on their holdings ahead of the BOJ statement this week. Japanese banks are closed for the holiday today, though

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a bit of ground on Friday as risk aversion peeped back in the financial markets on renewed threats from North Korea. There were no major reports out of Australia, New Zealand and Canada today so comdolls could be off to a slow start or sensitive to market sentiment ahead of top-tier events later on.

By Kate Curtis from Trader’s Way

1016

Forex Major Currencies Outlook (Sep 19, 2017)

USD

The dollar is off to a strong start against its peers as traders must be adjusting their positions ahead of the FOMC decision later in the week. Data printed on Friday came in weaker than expected as headline consumer spending fell 0.2% instead of rising by the estimated 0.1% uptick. US building permits and housing starts, as well as the current account balance and import prices, are up for release.

EUR

The euro was also off to a good start this week as it bounced against most of its counterparts when final CPI readings were unchanged. Keep in mind that both the headline and core reading have indicated a pickup in price levels over the past month, supporting ECB tapering expectations next month or in December. Canadian manufacturing sales data is due today and a 1.4% drop is eyed.

GBP

The pound made a bit of a retreat from its strong surge on Friday as traders probably booked profits ahead of the UK retail sales release later this week. The Rightmove HPI showed a 1.2% decline in house prices, following the earlier 0.9% slide. There are no major reports due from the UK for now so bulls might take a bit of a pause.

CHF

The franc weakened to the dollar but made a bit of a rebound against some of its peers as the SNB dialed down its intervention threats. There were no reports out from the franc so far this week and none are due today so market sentiment or currency-specific action could push franc pairs around.

JPY

The yen was off to a weak start as risk appetite extended its stay on the lack of moves from North Korea so far. At the same time, traders are also likely adjusting their positions ahead of the BOJ decision later this week. Japanese banks were closed for the holiday on Monday and there are no major reports due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were on the back foot as the gang corrected from their strong rallies last week. Canada’s foreign securities purchase came in stronger than expected while BOC member Lane reiterated that rates are still relatively low. New Zealand’s Westpac consumer sentiment index is due next and the RBA will be printing its meeting minutes next.

By Kate Curtis from Trader’s Way

1017

Forex Major Currencies Outlook (Sep 20, 2017)

USD

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.

EUR

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.

GBP

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.

CHF

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.

JPY

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

1018

Forex Major Currencies Outlook (Sep 21, 2017)

USD

The US dollar was in tight trading mode ahead of the FOMC decision, which saw the central bank keep rates unchanged as expected. During the presser, Yellen sounded optimistic about growth despite the likely transitory dip coming from the impact of the hurricanes. She also confirmed that they will be starting the balance sheet runoff in October, which would also put upward pressure on rates. The dot plot and CME FedWatch tool have indicated stronger expectations for another rate hike in December as well.

EUR

The euro gave back some of its recent gains even though the region’s medium-tier data beat expectations. German PPI rose 0.2% versus the projected 0.1% uptick but traders might be booking profits ahead of Draghi’s speech and on account of recent jawboning by other ECB officials.

GBP

The pound got another boost from upbeat UK retail sales, which reflected 1.0% growth in consumer spending versus the projected 0.2% uptick and the previous reading, which was upgraded from 0.3% to 0.6%. Only lending data is up for release today as traders might hold tight until UK PM May’s Brexit speech next week.

CHF

The franc had a mixed run as it reacted mostly to its counterparts. There were no major reports from Switzerland after all, so the currency likely reacted to market sentiment as well. SECO economic forecasts and the Swiss trade balance are up for release today, with the latter projected to show a smaller surplus of 2.41 billion CHF compared to the earlier 3.51 billion CHF figure.

JPY

The yen has regained some ground against most of its peers as traders may be lightening up positions ahead of the BOJ decision. The currency has lost to the dollar, though, as the FOMC set the date for its balance sheet runoff in October and maintained December hike expectations. No actual changes in rates are expected from the Japanese central bank but any downbeat remarks could keep weighing on the yen.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi continued to sustain their lead against most of their peers as a widening lead for New Zealand’s National Party in the polls is seen as a bullish scenario. New Zealand’s GDP is due next and a 0.8% growth figure is eyed, stronger than the earlier 0.5% expansion.

By Kate Curtis from Trader’s Way

1019

Forex Major Currencies Outlook (Sep 22, 2017)

USD

The US dollar enjoyed a strong rally against its peers as economic reports turned out stronger than expected and underscored the Fed’s tightening bias. Initial jobless claims fell from 282K to 259K versus the projected 302K figure while the Philly Fed index rose from 18.9 to 23.8. US flash manufacturing and services PMI are due next.

EUR

The euro was able to regain ground as European equities closed in the green as Draghi sounded more upbeat about the fiscal recovery in the region. In his testimony, he mentioned that the financial system poses a lower risk to the economy. Euro zone PMI readings are due next and strong figures from Germany and France could allow the shared currency to keep climbing.

GBP

The pound broke higher to most of its counterparts on anticipation for PM May’s speech as she reportedly might offer 20 billion EUR in a transitional deal with the EU in hopes of speeding up negotiations. It also could convince the bloc to concede to maintaining access to the single market and other conditions that could favor the UK.

CHF

The franc regained some ground as risk appetite took a hit after the Fed decision. The Swiss trade balance, however, turned out weaker than expected at 2.17 billion CHF versus the projected 2.41 billion CHF reading. There are no reports due from the Swiss economy today so the franc could be more sensitive to market sentiment.

JPY

The yen edged slightly lower after the BOJ decision as the central bank maintained interest rates at current levels and kept the pace of JGB purchases unchanged. The central bank also kept a slight easing bias as hinted by Governor Kuroda during the presser. There are no reports due from Japan today so risk sentiment could be the main driver for the yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took huge hits in previous trading sessions as the impact of Fed tightening dawned on commodities. Canadian wholesale sales posted a stronger than expected 1.5% gain versus the estimated 0.7% drop, sending positive vibes ahead of the retail sales and CPI releases today. Analysts are expecting to see a 0.2% increase in headline retail sales and a 0.4% uptick for the core figure. New Zealand will be having its parliamentary elections next.

By Kate Curtis from Trader’s Way

1020

Forex Major Currencies Outlook (Sep 25, 2017)

USD

The dollar finished the week on a strong note after the FOMC decision earlier on turned out more upbeat than expected. Data on Friday turned out mixed as the flash manufacturing PMI rose from 52.8 to 53.0 versus the projected 53.0 figure while the flash services PMI fell from 56.0 to 55.1 versus the projected 55.8 figure. There are no major reports due from the US today but FOMC members Kashkari and Evans have testimonies lined up.

EUR

The shared currency was able to make a rebound against its higher-yielding peers as risk aversion peeked back in the markets. PMI readings all turned out stronger than expected, which means positive prospects for the overall economy and supports the idea of ECB tapering before the end of the year. ECB head Draghi has another testimony scheduled today and upbeat remarks could push the euro higher.

GBP

The pound paused from its recent rallies as UK PM May’s speech failed to impress the bulls. UK CBI industrial order expectations also turned out weaker than expected as the reading fell from 13 to 7 to reflect slower growth instead of holding steady. There are no major reports due from the UK economy today.

CHF

The Swiss franc carried on with its mixed run as it mostly reacted to market sentiment and currency-specific factors. There were no major reports out of the Swiss economy on Friday and none are due today so the same market behavior could be seen.

JPY

The yen finished the week on a downbeat note as the BOJ’s easing bias weighed on the currency. Earlier today, the flash manufacturing PMI turned out weaker than expected as it rose from 52.2 to 52.6 versus the projected rise to 53.4. BOJ Governor Kuroda has a speech lined up so additional volatility could be in the cards.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi is off to a shaky start as the weekend elections in New Zealand failed to generate a majority government for the National Party. This could mean the political limbo could last a bit longer as parties try to negotiate a coalition. New Zealand’s trade balance is also due next while RBA Assistant Governor Bullock has a speech coming up. Meanwhile, oil drew a bit of support on stronger expectations of an output deal extension after the latest OPEC meeting.

By Kate Curtis from Trader’s Way

1021

Forex Major Currencies Outlook (Sep 26, 2017)

USD

The dollar paused from its climb as fresh updates from North Korea hit the newswires. Officials said that the latest provocations from the US are tantamount to declaring war on Pyongyang and that they will shoot down US bombers even if they’re not in the North Korean airspace. There are no major reports today but speeches from Evans and Kashkari haven’t been all that hawkish.

EUR

The euro also took a breather from its rallies after the German elections generated a victory for Merkel but this was short of a majority. This means that a coalition could be struck among the parties but that negotiations could leave political uncertainty in play for a while. The German Ifo business climate index fell from 115.9 to 115.2 instead of rising to the estimated 116.00 figure. German import prices data is due next.

GBP

The pound moved mostly sideways at the start of the week as traders are trying to assess how the meeting between Tusk and May might go. The UK PM’s speech didn’t do enough to rally the bulls last week so traders are doubtful that the transition deal could pass. There are no major reports due from the UK today so Brexit could be the main driver of price action.

CHF

The franc got a bid in the latter half of the day as several market uncertainties came into play. For one, there’s the political uncertainty in the euro zone and New Zealand, then there’s the resurfacing geopolitical tensions between the US and North Korea. There were no reports out of Swizterland on Monday and none are due today so market sentiment and currency-specific action could stay in play.

JPY

The yen got a boost from a pickup in risk aversion in the Asian region and reacted somewhat positively to news of a snap election in Japan. PM Abe is seeking fresh mandate to address the concerns regarding North Korea, so while this could mean a bit of uncertainty in the near term, it could also lead to affirmation for the government’s stance. BOJ minutes are due next.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies appear to be on shaky footing again now that North Korean jitters are returning. However, CAD has been able to hold steady on speculations that the OPEC might extend its output deal beyond March 2018 to keep crude oil prices stable. New Zealand has its trade balance and ANZ business confidence index due next but traders seem to be more focused on political developments.

By Kate Curtis from Trader’s Way

1022

Forex Major Currencies Outlook (Sep 27, 2017)

USD

The US dollar tossed and turned during Fed head Yellen’s speech as she admitted that the central bank may have overestimated some of the figures on employment and inflation. She repeated that the dip in inflation this year has been puzzling for the Fed and reiterated that they would adjust policy to data as needed. Durable goods orders and pending home sales reports are lined up next.

EUR

The euro continued to slide to its peers as traders focused on the outcome of the German elections, which spurred coalition talks and the rise of the AfD party. Political uncertainty could continue to weigh on the shared currency in the next few days but the focus could return to fundamentals if data comes in strong. However, there are no major reports on today’s docket.

GBP

The pound is showing signs of weakness as there have been no reports to prop it any higher. Brexit remains a thorn on the pound’s side and the upcoming meeting between May and Tusk should determine where the currency might be headed next. CBI realized sales data is due today and a rise from -10 to +8 is expected.

CHF

The franc continued its mixed run but managed to catch a bid on rising risk-off flows. There have been no reports from Switzerland yesterday while today has the UBS consumption indicator and the Credit Suisse Economic Expectations figure. Any improvements from their earlier readings could lend more support for the franc since the SNB has sounded less worried about currency strength recently.

JPY

The yen was able to take advantage of the pickup in risk aversion even after PM Abe called for snap elections. North Korea’s foreign minister claimed that Trump has declared war and the clash of words continues between the two nations, keeping traders on edge. There are no reports due from Japan today, so market sentiment could be the main driver.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed run as the Aussie and Kiwi weakened while the Loonie tried to hold on to its current levels. Canada’s finance minister mentioned that they aren’t too worried about CAD strength at the moment. Still, risk aversion is weighing on these higher-yielding currencies, especially since the situation with North Korea shows no signs of abating anytime soon. Crude oil inventories and the RBNZ decision are due next.

By Kate Curtis from Trader’s Way

1023

Forex Major Currencies Outlook (Sep 28, 2017)

USD

The US dollar regained a lot of ground after US President Trump threw the spotlight back on tax reform and included a few more details. US economic data turned out mixed, with headline durable goods orders up by 1.7% versus the projected 1.0% gain and core durable goods orders posting a 0.2% uptick as expected. Pending home sales slipped by 2.6% versus the estimated 0.5% drop. US final GDP and initial jobless claims data are due next, along with a speech by FOMC member Fischer.

EUR

The euro had a mixed round as reacted mostly to country-specific events. There were no major reports out of the euro zone then and today has the German GfK consumer climate index, as well as its preliminary CPI. Analysts are expecting to see a rise from 10.9 to 11.0 for the consumer index and another 0.1% uptick in price levels. The Spanish flash CPI is due as well.

GBP

The pound had a strong rally after the CBI realized sales index jumped from -10 to +42, outpacing the consensus at +6. BOE Governor Carney has a speech lined up today and upbeat remarks on the economy and monetary policy could allow the UK currency to sustain its climb.

CHF

The franc also had a mixed run as it reacted mostly to market sentiment and its counter currencies. The Swiss UBS consumption indicator rose from 1.46 to 1.53 while the Credit Suisse Economic Expectations index rose from 25 to 28. There are no reports due from the Swiss economy today.

JPY

The Japanese yen gave up ground to its peers as the dollar raked in most of the gains. There were no reports out of Japan then while today has a speech by BOJ head Kuroda lined up. Dovish remarks could keep a lid on the yen’s gains while optimistic comments could allow it to regain ground. Also any escalation with North Korean tensions could also revive demand for the safe-haven currency.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was dragged lower by cautious remarks from BOC head Poloz who reiterated that there is no pre-determined path for interest rates and that any adjustments would continue to be data-dependent. He did have a couple of upbeat remarks on inflation and the jobs market but bulls seemed mostly disappointed. The RBNZ kept rates on hold as expected while barely making any changes to their official statement, although they didn’t seem too concerned about Kiwi strength.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Sep 29, 2017)

USD

The US dollar remains strongly supported thanks to talks of tax cuts. President Trump shared more details on the GOP proposal for fiscal reform and promised that they will get this done by the end of the year. US final GDP was also upgraded from 3.0% to 3.1%, supporting Fed December hike prospects. Core PCE price index, along with personal spending and income data, are due next.

EUR

The euro was slightly weaker against its peers as data came in weaker than expected. Germany’s GfK consumer climate index fell from 10.9 to 10.8 instead of improving to the consensus at 11.0 while the preliminary CPI showed a meager 0.1% uptick as expected. German retail sales and French consumer spending are due today but the flash CPI readings from the region could generate more market reaction.

GBP

The pound was able to make a bit of a recovery even after BOE head Carney confirmed that the central bank can’t do much to reverse Brexit effects. This was followed by a speech by UK PM May who said that work is needed to restore finances back to health. The attention could shift back to data today as the UK will release its current account balance and final GDP reading. Net lending to individuals and mortgage approvals data are also lined up.

CHF

The franc caught a bid despite the lack of top-tier data as risk aversion was still present in the markets. The KOF economic barometer is due next and it is expected to improve from 104.1 to 105.5, which might allow the Swiss currency to extend its wins.

JPY

The yen had a mixed run as it reacted mostly to currency-specific factors while waiting for more clues on the snap elections. The prospect of an attack from North Korea is keeping the lower-yielding currency supported but traders are also wary of potential downside surprises in today’s release of core CPI, household spending, retail sales, and preliminary industrial production data.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi and Loonie were in a weak spot thanks to downbeat central bank rhetoric. Although the RBNZ kept rates unchanged as expected, their less upbeat outlook for growth due to a construction sector slowdown has put downside pressure on the Kiwi. Meanwhile, BOC head Carney sounded less optimistic than expected in his testimony, weighing on BOC hike odds for next month or December. Canadian GDP is due next and a 0.1% expansion for July is eyed. Chinese PMI readings are due over the weekend.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Oct 02, 2017)

USD

The US dollar gave back most of its recent wins at the end of the week on profit-taking and the lack of follow-through on tax reform. The ISM manufacturing PMI, which should serve as a leading indicator for Friday’s NFP, is due today and analysts are expecting a drop from 58.8 to 57.9. The Markit final manufacturing PMI reading is also due, along with data on construction spending.

EUR

The euro finished the previous week on a strong note, despite mixed reports from its top economies. German retail sales fell 0.4% instead of rising by 0.5% while French consumer spending dropped 0.3% instead of posting the estimated 0.2% uptick. German unemployment change was stronger than expected at a 23K drop in joblessness versus the projected 5K reduction while French preliminary CPI showed a smaller than expected 0.1% dip instead of the estimated 0.2% drop in price levels. However, CPI flash estimates were both weaker than expected. Final manufacturing PMIs and the region’s jobless rate are lined up today.

GBP

The pound was in a weak spot on Friday as the current account balance showed a larger deficit of 23.2 billion GBP versus the estimated 15.3 billion GBP shortfall while the earlier reading suffered a downgrade. PM May’s speech over the weekend failed to rally positive sentiment for the UK leading up to Brexit. The manufacturing PMI is due today and a dip from 56.9 to 56.3 is eyed.

CHF

The franc had a mixed run as it mostly reacted to currency-specific events on the lack of top-tier reports from Switzerland. The KOF economic barometer improved from an upgraded 104.2 reading to 105.8, outpacing the consensus at 105.5. The Swiss manufacturing PMI is due today and a fall from 61.2 to 60.6 is expected.

JPY

The Japanese yen also had a mixed performance as it was driven by market sentiment and its counter currencies. Earlier today, the Tankan survey printed a gain from 17 to 22 for its manufacturing component and no change for its non-manufacturing component at 23. The final manufacturing PMI was upgraded from 52.6 to 52.9. There are no other reports lined up from Japan so sentiment could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker towards the end of the week as there were still signs of risk aversion in the financial markets. Australian and Chinese banks are closed for the holiday today so liquidity could be thin. Over the weekend, China’s manufacturing PMI rose from 51.7 to 52.4 instead of falling to 51.5 while the non-manufacturing PMI improved from 53.4 to 55.4. The Caixin version of the manufacturing PMI was down from 51.6 to 51.0.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Oct 03, 2017)

USD

The Greenback got a strong boost from better than expected manufacturing PMI data, as these lifted expectations for the NFP and therefore a December Fed rate hike. The ISM reading rose from 58.8 to 60.8 versus the consensus at 57.9 while the Markit final reading reading was upgraded from 53.0 to 53.1. Components for employment and prices both posted strong gains. Only a speech by FOMC member Powell and the total vehicle sales report are lined up today.

EUR

The euro was one of the weakest performers as it was dragged down by the Catalonian elections. The vote for independence sets a precedent for other European nations seeking their own government and undermines the strength of the union, although the Spanish government is still challenging the constitutionality of the vote. Euro zone data came in mixed, with the jobless rate and Italian final manufacturing PMI coming in weaker than expected and the rest coming in mostly in line with consensus. German banks are closed for the holiday today while the Spanish unemployment change reading is due.

GBP

The pound was also in a weak spot as Brexit risks remained in the spotlight while data came in weak. The manufacturing PMI slipped from 56.7 to 55.9, lower than the estimated drop to 56.3. Construction PMI is due today and no change from the earlier 51.1 figure is expected. Market attention could still be focused on Brexit-related updates as the UK government scrambles to restore confidence in their bargaining stance.

CHF

The franc tracked the losses of its fellow European currencies as Swiss retail sales disappointed with a 0.2% drop instead of the estimated 0.5% uptick. A bit of risk aversion kept the Swiss currency supported and the lack of reports from Switzerland today could leave market sentiment in play.

JPY

The yen raked in some gains against most of its peers as risk-taking tumbled on geopolitical concerns. Among these are the violence in the Catalonian polls and the deadly attack in Las Vegas. Japan’s final manufacturing PMI was also upgraded from 52.6 to 52.9. There are no reports due from Japan today so risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls fell victim to risk aversion and dollar strength but managed to chalk up gains against the European currencies. Rising oil output weighed on the commodity and the positively-correlated Loonie while the Aussie recouped some of its previous losses ahead of the RBA decision. No actual rate changes are expected but a shift to a more cautious stance is eyed. New Zealand has its GDT auction coming up in the late US session and another gain in dairy prices could be Kiwi bullish.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Oct 04, 2017)

USD

The dollar managed to hold on to most of its recent gains as equity indices shot to record highs on strong auto sales. Total vehicle sales posted their strongest rise so far this year as purchases were made to replace cars damaged by the hurricanes. The ISM non-manufacturing PMI and ADP non-farm employment change data are lined up today and these are considered leading indicators for the NFP. Fed head Yellen also has a speech lined up and might have more clues on Fed policy biases.

EUR

The euro was slightly weaker against most of its peers as political uncertainty stemming from the Catalan elections continued to haunt the shared currency. Spanish unemployment change data came in weaker than expected at a 27.9K increase in joblessness versus the estimated 21.3K gain. Final services PMI readings and the region’s retail sales report are lined up next, along with a speech by ECB head Draghi.

GBP

The pound was one of the weakest performers of the day as it was dragged down by weak construction PMI. The reading slumped from 51.1 to 48.1 instead of holding steady as expected and the services PMI is due next. Analysts are also expecting no change from the earlier 53.2 figure but a disappointment may be underway, given how the other sectors turned out. The BOE FPC also judged that Brexit could pose larger risks to the banking sector than initially anticipated.

CHF

The franc remained supported throughout the day, despite the lack of top-tier data from Switzerland. There are still no reports due from the Swiss economy today but the presence of risk-off vibes, particularly in the European region, could render this currency the safe-haven of the bunch.

JPY

The yen was also able to hold its ground as a bit of risk aversion lingered in the markets on geopolitical risks. The BOJ core CPI ticked higher from 0.4% to 0.6% to reflect stronger inflationary pressures and a potential shift to a less dovish stance for the central bank later on. Japanese consumer confidence also improved from 43.3 to 43.9 versus the 43.5 consensus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tried to hold steady against the dollar and chalked up some wins to the European currencies. New Zealand’s GDT auction yielded a 2.4% drop in dairy prices, following the earlier 0.9% gain. The API reported another draw in crude oil stockpiles so the EIA report due today could also show a reduction, with analysts expecting to see a drop of 0.5 million barrels.

By Kate Curtis from Trader’s Way

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Forex Major Currencies Outlook (Oct 05, 2017)

USD

The US dollar barely got a boost from upbeat ISM non-manufacturing PMI and ADP non-farm employment change data as the focus was on the next Fed Chair. There have been rumors that dovish member Powell is being eyed to replace Yellen when her term expires in February, weakening rate hike expectations for next year. The ISM non-manufacturing PMI rose to 59.8 versus the 55.5 consensus and featured a gain in the jobs component while the ADP reading came in at 135K versus 131K. The initial jobless claims and trade balance are due next, along with speeches by FOMC members Powell and Harker.

EUR

The euro was able to chalk up some gains against its counterparts when the King of Spain addressed the unrest related to the latest Catalan elections. His speech provided a bit more reassurance for the markets and the shared currency, which was on shaky footing in anticipation of similar independence votes in other European nations. Euro zone services PMI readings were mixed but mostly in line with expectations, except that of Italy. The ECB minutes are due next and traders are on the lookout for tapering remarks.

GBP

The pound was able to regain ground on stronger than expected UK services PMI. The reading ticked up from 53.2 to 53.6 instead of holding steady as many expected or posting a bleak figure like the manufacturing and construction PMIs. Since the services sector accounts for majority of UK economic activity, pound bulls were more confident that the BOE can stick to its hawkish bias. There are no major reports due from the UK today.

CHF

The franc gave up some ground as sentiment improved in the European area and safe-haven demand dipped. There were also no reports to give the Swiss currency an extra boost then. Swiss CPI is due next and analysts are expecting to see a 0.2% uptick in price levels after the previous flat reading.

JPY

The yen edged slightly higher against its peers even though it was still stuck in its short-term range. There were no reports out of Japan then and none are due today, which suggests that yen pairs could be vulnerable to market sentiment and currency-specific factors.

Commodity Currencies (AUD, NZD, CAD)

Australian economic data turned out mixed today, with retail sales coming up short of the 0.3% gain and posting a surprise 0.6% decline. The trade balance, on the other hand, showed a larger than expected surplus of 0.99 billion AUD versus the estimated 0.88 billion AUD and the earlier 0.81 billion AUD figure. Crude oil inventories dropped by 6 million barrels versus the estimated 0.5 million draw but failed to shore up crude oil or the Loonie. Canada’s trade balance is due next and a smaller deficit of 2.6 billion CAD is eyed.

By Kate Curtis from Trader’s Way