Forex Major Currencies Outlook (Feb 16, 2018)
The dollar had another day in the red as equities advanced, but traders remained wary of fiscal risks. Data turned out mixed but positive PPI readings failed to draw support for the currency. The Empire State manufacturing index posted a downside surprise while the Philly Fed index jumped. Industry production and capacity utilization also missed estimates. Building permits and housing starts, along with import prices and UoM consumer expectations data, are due next.
The euro had a mixed round as it advanced to the dollar and Loonie but gave up ground to most of its other rivals. Low-tier data from the region was mostly stronger than expected, keeping tightening expectations in play, but traders are careful of potential jawboning in case currency appreciation starts hurting inflation. Only the German WPI is lined up today.
The pound was one of the top performers in recent sessions, although there were no major catalysts. BOE tightening expectations stemming from upbeat CPI data may still be in play. UK retail sales data is due next, and a 0.5% rebound is eyed.
The franc gave up some ground on risk-taking but remained supported versus the dollar. There were no reports out of the Swiss economy then and none are due today, so sentiment and currency-specific factors could push franc pairs around.
The yen scored another set of wins as it took most of the anti-dollar flows. Data from Japan also turned out stronger than expected as the industrial production figure was upgraded from 2.7% to 2.9%. There are no reports lined up today, so sentiment could be the main driver.
Commodity Currencies (AUD, NZD, CAD)
The condoles managed to hold their ground as risk-taking carried on and commodities drew support. Australia's headline jobs data turned out slightly beter than expected but this was mostly due to part-time hiring. Canadian foreign securities purchases and manufacturing sales are lined up next.
By Kate Curtis Trader’s Way