Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Nov 20, 2015)

USD

The US dollar continued to give up ground to its peers even though the FOMC minutes pretty much sealed the deal for a December liftoff. Profit-taking appears to be in play, as most of these rate hike expectations have been priced in for quite some time. Data from the US economy was actually better than expected, with initial jobless claims at 271K versus the 272K forecast and the Philly Fed index improving from -4.5 to +1.7 to indicate industry expansion.

EUR

The euro recovered against most of its forex rivals when the euro zone current account balance came in better than expected. The bounce was also partly spurred by reports that the French police was able to capture the perpetrators of last week's terror attacks. German PPI and a speech by ECB Governor Draghi are lined up for today.

GBP

The pound showed some weakness in recent trading sessions when the UK retail sales data turned out to be a disappointment. The report showed a 0.6% decline worse than the estimated 0.4% drop while the previous report was downgraded to show a 1.7% increase. Public sector net borrowing data is up for release today.

CHF

The franc also bounced back against its rivals, following in the euro's footsteps. The Swiss trade balance came in better than expected, showing a surplus of 4.16 billion CHF compared to the projected 3.18 billion CHF figure. There are no reports due from the Swiss economy today.

JPY

The yen made a strong comeback in the forex charts when the BOJ refrained from boosting its current stimulus program. Analysts had expected some form of dovishness, especially since the Japanese economy is back in recession and the latest trade balance showed a surprise decline in exports. Still, the BOJ maintained that the Japanese economy continued to recover moderately and that it can achieve its inflation target of 2% by the second half of 2016. No reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a strong rebound towards the end of the trading day when the US natural gas storage report showed falling supply levels. This follows the crude oil inventories report which also showed a decline in stockpiles, easing fears of a supply glut and putting upward pressure on prices. Canadian CPI and retail sales figures are up for release today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 23, 2015)

USD

The US dollar rebounded against its forex rivals on Friday, recovering back to its weekly highs against most of its counterparts. There were no major reports out of the US then but FOMC members Dudley and Williams reaffirmed the idea of a December Fed rate hike. The Fed has an unscheduled announcement later today that might spur volatility among dollar pairs.

EUR

The euro resumed its spot in the last place in the currency race, as the shared currency gave up a lot of ground on Friday. German PPI data came in weaker than expected with a 0.4% decline versus the projected 0.2% drop while ECB Governor Draghi reiterated in his testimony that the central bank will do what it takes to boost inflation. Euro zone PMI readings are up for release today.

GBP

The pound was also in a weak spot on Friday, thanks to worse than expected public sector net borrowing data. The report showed a 7.5 billion GBP deficit versus the projected 5.5 billion GBP shortfall. There are no reports due from the UK economy today.

CHF

The franc also gave up ground against its peers, as the euro showed more signs of weakness. There have been no reports out of the Swiss economy then and none are due today, which suggests that the Swissy might keep taking its cue from the euro.

JPY

The yen enjoyed the return in risk aversion on Friday, even though there were no reports out of Japan. Banks are closed for the holiday today which means that there are no major catalysts on deck and that liquidity might be lower in Asia.

Commodity Currencies (AUD, NZD, CAD)

The Aussie carried on with its strong rallies, followed by the Kiwi and leaving the Loonie to eat dust. Canadian headline CPI came in line with expectations of a 0.1% uptick while the core CPI showed a stronger than expected 0.3% gain. Headline and core retail sales slipped 0.5%, worse than the projected declines. Over the weekend, New Zealand reported a meager 0.2% uptick in visitor arrivals for October.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 24, 2015)

USD

The US dollar still managed to dominate against its forex peers even with weaker than expected economic data. The flash manufacturing PMI for November showed a decline from 54.1 to 52.6, reflecting a slower pace of growth. Existing home sales fell from 5.55 million in September to 5.36 million in October. For today, the CB consumer confidence index is due and a rise from 97.6 to 99.3 is eyed. Aside from that, the preliminary GDP reading is up for release and any revisions could be crucial to dollar price action.

EUR

The euro resumed its tumble at the start of the week, dipping below the 1.0600 mark against the dollar. Data from the euro zone was actually mostly stronger than expected, with only the French flash services PMI falling short. The German Ifo business climate index is due today and a small rise from 108.2 to 108.3 is expected, indicating a small improvement in confidence.

GBP

The pound sold off against most of its forex counterparts, even though there were no major reports out of the UK. The BOE inflation report hearings are scheduled today and more downbeat comments are expected, especially since the latest policy statement and minutes sounded less upbeat. UK CBI realized sales data is also due today.

CHF

The franc managed to hold its ground yesterday even with the euro resuming its tumble. There have been no reports out of Switzerland and today has the employment level on tap. Any signs of improvement could spur gains for the franc while a reduction could lead to losses.

JPY

The yen was able to outpace its forex rivals, including the US dollar, even though Japanese traders were out on a holiday yesterday. The flash manufacturing PMI is due today and a dip from 52.4 to 52.1 is expected, reflecting a weaker pace of industry expansion.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent wins since there were no major reports to allow the rallies to carry on. The Loonie got a bit of a boost from speculations that the OPEC might finally announce a reduction in oil supply during their meeting next week. RBA Governor Stevens has a testimony lined up today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 25, 2015)

USD

The US dollar functioned mostly as a counter currency in recent trading sessions, ending up with a mixed performance against its forex peers. Data from the US economy came in weaker than expected, as the CB consumer confidence index slumped from 99.1 to 90.4 in November and the Richmond manufacturing index indicated a drop from -1 to -3. For today, durable goods orders, initial jobless claims, and personal spending and income data are all lined up.

EUR

The euro managed to stay afloat against the dollar and recover against the pound, as traders probably booked profits off their recent short positions. Data from the euro zone has surprised to the upside once more, with the German Ifo business climate index rising from 108.2 to 109.0. Only the Italian retail sales report is due today and this might not have a huge impact on the shared currency's movement.

GBP

The pound was in a very weak spot after the BOE Inflation Report hearings revealed a downbeat tone. According to Governor Carney, rates will remain low for quite some time, a different view from what he expressed in the past. The UK second estimate GDP reading is due today and no revisions from the initial 0.5% estimate are eyed.

CHF

The franc took its cue from the euro and regained a bit of lost ground. There were no major reports due from Switzerland then while today has the UBS consumption indicator on deck. Any improvement from the earlier 1.65 reading could spur more gains for the Swiss currency.

JPY

The yen gave up some ground against its peers, except for the US dollar and the British pound. Japan's flash manufacturing PMI for November beat expectations and climbed from 52.4 to 52.8 instead of falling to 52.1. For today, the BOJ monetary policy meeting minutes are due.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to rally against their rivals, with the Aussie leading the pack. There were no reports released out of Australia but RBA Governor Stevens' speech seemed to highlight the central bank's shift to a less dovish stance. Australia's quarterly construction work done report is up for release next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 26, 2015)

USD

The US dollar chalked up another mixed forex performance, as economic reports were all over the place. The headline durable goods orders report showed an impressive 3.0% gain while the core version of the report simply came in line with expectations of a 0.5% uptick. Initial jobless claims also came in above expectations but the core PCE price index disappointed with a flat reading. Personal spending rose 0.1% even as personal income grew by 0.4%. US traders will be off on their Thanksgiving holiday today so some profit-taking might be seen.

EUR

The euro continued to sell off against its peers when a Reuters interview with a couple of ECB officials was published. According to them, a number of policy options have been discussed, strengthening the case for additional easing in the ECB's December statement. Data from the euro zone was weaker than expected as the Italian retail sales report printed a 0.1% drop instead of the estimated 0.5% increase.

GBP

The pound was still in a weak spot since there were no major reports to give it any support. The Treasury's autumn forecast statement did contain some positive bits, as the growth estimate for 2016 was upgraded. There are no reports lined up from the UK today.

CHF

The franc saw another set of losses against its forex peers even though there were no major reports out of Switzerland. Franc bears got in the game upon hearing reports that the ECB is likely to announce further easing in December, speculating that the SNB might intervene in the currency market to keep the franc weak. The Swiss UBS consumption indicator actually improved from 1.56 to 1.60 and there are no reports due from the Swiss economy today.

JPY

The yen gave up some ground to the dollar and a few of its forex rivals as risk aversion appeared to ease in the financial markets. There were no major reports out of Japan then and none are due today, allowing traders to price in expectations ahead of the spending and inflation reports due later on.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was one of the stronger ones in the bunch, as the Canadian currency continued to draw support from oil prices. Australia printed a weaker than expected quarterly construction work done report while New Zealand showed a smaller trade deficit for October, although this was spurred by a decline in both imports and exports. Australia is set to print its private capital expenditure report next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 27, 2015)

USD

The US dollar was mostly stuck in consolidation against its forex rivals since there were no reports out of the US economy. Traders are off on Thanksgiving holidays and might not be back until Monday's US trading session. There have been no reports out of the US yesterday and none are due today.

EUR

The euro resumed its slide since the lack of top-tier data allowed traders to keep speculating on what the ECB might do next. A report from Reuters showed that ECB officials discussed the policy options they could employ but no details have been confirmed yet. French consumer spending and Spanish flash CPI are up for release next.

GBP

The pound was also in a weak spot even though there were no reports out of the UK. Traders appear to be pricing in expectations ahead of the UK second GDP release today, although no major revisions to the initial 0.5% estimate are expected. Any downgrades could mean sharp losses for the pound since this would underscore the BOE's less hawkish stance.

CHF

The franc gave up some ground in recent trading, as the prospect of further ECB easing could mean additional SNB intervention. There were no reports out of the Swiss economy yesterday and none are due today, keeping risk sentiment in play.

JPY

The yen advanced against most of its peers as risk aversion popped its head back in the markets. Traders are waiting for the release of Japan's household spending and inflation readings today, with small declines expected. Still, the lack of dovishness from the BOJ could keep the yen supported even with downbeat data.

Commodity Currencies (AUD, NZD, CAD)

Commodities retreated in recent trading sessions, dragging the comdolls down in the process. In Australia, the private capital expenditure report showed a 9.2% drop in Q3, worse than the projected 2.8% drop. There are no major reports due from the comdoll economies today so commodities could push prices around.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Nov 30, 2015)

USD

The lack of top-tier data from the US and the low liquidity after Thanksgiving wasn't enough to stop the US dollar from rallying against its peers, as risk aversion seemed to take over the financial markets. Only the Chicago PMI and pending home sales data are up for release today, which suggests a potentially quiet trading day ahead.

EUR

The euro resumed its slide to the dollar, as most reports from the region missed expectations. German import prices fell 0.3% versus the projected 0.1% decline while French consumer spending decreased 0.7% instead of posting the estimated 0.2% uptick. The Spanish flash CPI was slightly better than expected at -0.3% versus the projected -0.5% reading. German retail sales and CPI are due today, with analysts expecting a 0.3% increase in consumer spending and a 0.1% rise in price levels.

GBP

The pound managed to hold its ground on Friday, thanks to upbeat data from the UK. The second GDP estimate didn't see any revisions from the initial 0.5% growth estimate but the preliminary business investment report showed a 2.2% jump versus the projected 1.5% increase in Q3. Net lending to individuals and mortgage approvals data are due today.

CHF

The franc suffered a sharp selloff against its counterparts on SNB intervention speculations. There were no actual reports released from Switzerland then while today has the KOF economic barometer. A rise from 99.8 to 100.3 is expected, possibly giving the franc some room to recover.

JPY

The yen took advantage of the run in risk aversion, but it was still no match to dollar strength. Data from Japan came in mixed, as household spending sank by 2.4% while the jobless rate dropped from 3.4% to 3.1%. Price levels in Tokyo stayed flat instead of falling by the estimated 0.1% figure while the national core CPI showed another 0.1% drop. Earlier today, the Japanese retail sales report showed a 1.8% gain while the industrial production reading missed expectations and showed a 1.4% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls suffered a bit of a selloff on Friday, following the lead of gold and oil prices. Gold fell to its six-year low below the $1,100/ounce level while WTI crude oil slipped back below $42/barrel. In New Zealand, building consents rebounded by 5.1% while the ANZ business confidence index improved from 10.5 to 14.6.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 1, 2015)

USD

The US dollar made a few wins and losses here and there, as the currency seemed to react to country-specific events. Data from the US economy came in weaker than expected, with both the Chicago PMI and pending home sales report falling short of consensus. Up ahead, the US ISM manufacturing PMI is up for release and a climb from 50.1 to 50.6 is eyed. Traders are also likely to pay close attention to the employment sub-index for more clues on the upcoming NFP.

EUR

The euro resumed its slide to its peers, as data from the euro zone turned out to be a disappointment again. German retail sales slumped 0.4% while the Italian preliminary CPI posted a larger than expected 0.4% drop. The German unemployment change report and Spanish manufacturing PMI numbers are up for release today and another round of downbeat figures could mean more losses for the shared currency.

GBP

The pound managed to hold its ground against most of its rivals, as medium-tier UK data came in mostly in line with expectations. Top-tier events such as the release of bank stress test results and the BOE Financial Stability Report could have a larger impact on pound price action today.

CHF

The franc managed to erase some of its losses even though Swiss data came in weaker than expected. The KOF economic barometer slid from 100.4 to 97.9, worse than the estimated dip to 100.3. The Swiss Q3 GDP report is due today and another 0.2% expansion is eyed.

JPY

The yen lost a lot of ground to its peers as reports from Japan came in mixed and BOJ Governor Kuroda insisted that additional stimulus isn't necessary. Japanese retail sales rose 1.8% while the preliminary industrial production report printed a lower than expected 1.4% gain. Capital spending data and the final manufacturing PMI for November are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a lot of headway against their forex rivals, as traders appear to be pricing positive expectations for this week's top-tier events such as the OPEC meeting, Chinese PMI releases, and the New Zealand dairy auction. The ANZ business confidence index in New Zealand improved from 10.5 to 14.6 while Canada saw a smaller current account deficit. Some improvements are expected for the Chinese PMI readings and another upbeat statement is expected from the RBA next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 2, 2015)

USD

The US dollar had a rough trading day, as the downbeat ISM manufacturing PMI forced the currency to retreat. The reading slipped from 50.1 to 48.6 in November, its lowest reading since June 2009, instead of rising to the projected 50.6 figure. Up ahead, the ADP non-farm employent change is due and a 191K increase in hiring is eyed. Also lined up today is a testimony by Fed Chairperson Janet Yellen.

EUR

The euro managed to take advantage of dollar weakness and join the risk rallies when data from its top economies turned out strong. German showed a larger than expected decline in joblessness of 13K while Spain and Italy printed stronger than expected manufacturing PMI numbers. Euro zone CPI estimates are due next and positive readings could allow the shared currency to hold on to its gains.

GBP

The pound was mostly flat against the dollar and the yen but was no match to comdoll strength. The UK manufacturing PMI came in below expectations at 52.7 from the previous 55.2 figure. The construction PMI is up for release next and a drop from 58.8 to 58.4 is eyed.

CHF

Data from Switzerland came in below expectations, yet the franc also managed to regain ground to the dollar. Retail sales slipped 0.8% instead of posting the projected 0.4% uptick while the manufacturing PMI fell from 50.7 to 49.7 to indicate industry contraction. There are no reports due from the Swiss economy today.

JPY

The yen was also significantly weaker in recent sessions due to the run in risk appetite, but it managed to advance against the dollar. There were no major reports out of Japan then and none are due today, which suggests that the currency could stay sensitive to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were the biggest winners for the day, lifted by upbeat rhetoric from the RBA and the pickup in dairy prices during the latest GDT auction. The Loonie fell behind as Canada's monthly GDP printed a 0.5% contraction instead of the projected 0.1% uptick in growth. Up ahead, the Australian quarterly GDP is due, followed by the BOC interest rate statement later on.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Dec 3, 2015)

USD

The US dollar continued to give up ground during the earlier trading sessions but made a bit of a recovery later on. Data from the US economy was mostly stronger than expected, as the ADP non-farm employment change report indicated a 217K gain versus the projected 191K rise. This sets the tone for a positive NFP release later on, reminding traders that the Fed is on track to hike rates in their December meeting. The ISM non-manufacturing PMI is due next and a drop from 59.1 to 58.1 is eyed.

EUR

The euro made a strong bounce against the dollar but weakened against its other rivals when data from the euro zone came in mixed. The flash CPI readings showed small gains but were lower than expected while the Spanish unemployment change report showed a larger decline in joblessness. The ECB monetary policy statement is lined up next and expectations for additional stimulus are running high.

GBP

The pound suffered more weakness to most of its currency rivals, as the UK construction PMI came in weaker than expected. The reading fell from 58.8 to 55.3 in November, reflecting slower industry expansion. For today, the services PMI is due and a rise from 54.9 to 55.1 is expected but another disappointment might mean more pound weakness.

CHF

The franc surprisingly made a strong rally to the dollar even though there were no major reports out of Switzerland. There are still no reports due from the Swiss economy today, leaving the franc to take its cue from euro events like the ECB statement.

JPY

The yen managed to regain a bit of lost ground, as traders probably booked profits off key levels. There have been no major reports out of Japan yesterday and none are due today, leaving risk sentiment in the driver's seat of price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to rally although signs of exhaustion were seen. Australia's GDP beat expectations with a 0.9% expansion versus the projected 0.7% growth figure for Q3 while the previous reading was upgraded from 0.2% to 0.3%. Australia's trade balance is up next and a wider deficit is eyed. Meanwhile, the BOC decided to keep interest rates unchanged at 0.50% as expected while crude oil inventories in the US rose from 1M to 1.2M barrels.

By Kate Curtis from Trader's Way