Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Feb 2, 2016)

USD

The US dollar was weighed down by weak data and dovish Fed rhetoric. US personal spending was flat in December even while personal income rose by 0.3%. The core PCE price index also showed a flat reading instead of the estimated 0.1% increase. Later on, the ISM manufacturing PMI showed no change at 48.2 instead of rising to the projected 48.6 figure, with the employment component indicating a decline. FOMC member Fischer noted that inflation could stay low for somewhat longer and his fellow FOMC member George is set to give a testimony today.

EUR

The euro managed to take advantage of dollar weakness but lagged behind the pound and the commodity currencies. Revised PMI readings from euro zone's top economies came in mostly in line with expectations. German and Spanish unemployment change numbers are up for release today and strong readings could give the euro another boost.

GBP

The pound staged a very strong rally after seeing stronger than expected manufacturing PMI data. The report showed a rise from 52.1 to 52.9 instead of the projected drop to 51.8, reflecting stronger industry expansion. Construction PMI is due today and a dip from 57.8 to 57.6 is eyed.

CHF

The franc managed to recoup some of its recent losses to its peers as there were no major reports out of the euro zone and the Swiss economy. Their manufacturing PMI fell from 52.1 to 50.0 to show a slower pace of industry growth. Swiss retail sales is due today and a 1.3% decline is expected.

JPY

The yen struggled to regain some ground in recent sessions, as traders are still weighing the impact of negative deposit rates. There are no major reports due from the Japanese economy today, keeping risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance in recent trading sessions, as risk appetite lifted the higher-yielding currencies. The RBA statement is scheduled today and no major changes are expected, although the central bank might acknowledge the risks from China and caution that the Aussie is still overvalued. New Zealand's quarterly jobs report is due next and a 0.8% increase is expected but the unemployment rate could rise from 6.0% to 6.1%. The GDT auction is also due in the late US session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 3, 2016)

USD

The US dollar had a mixed performance in recent trading sessions, as it advanced to the commodity currencies but retreated to the yen and European currencies. There were no major reports out of the US then, leaving the Greenback to function as a counter currency. For today the ADP non-farm employment change is due, along with the ISM non-manufacturing PMI.

EUR

The euro was able to advance against the dollar but weakened to the yen, even as employment data from Germany and Spain came in stronger than expected. Spain's unemployment increased less than expected while Germany reported a drop in joblessness of 20K. Final services PMI readings are due from the euro zone's top economies today.

GBP

The pound shrugged off weaker than expected construction PMI as it rallied against its forex counterparts. The report showed a drop from 57.8 to 55.0, worse than the projected fall to 57.6. For today, the services PMI is due and a dip from 55.5 to 55.4 is eyed.

CHF

The franc regained a bit of ground when SNB Thomas Jordan gave his testimony, as the central bank head refrained from jawboning the currency. Data from Switzerland was still weaker than expected, with retail sales down by an annualized 1.6% versus the estimated 1.3% decline. There are no reports due from the Swiss economy today.

JPY

The yen got back on its feet when risk aversion returned during the US trading session. There were no major reports out of Japan yesterday while today had the BOJ meeting minutes released. BOJ Kuroda also has a testimony lined up and this might spur additional volatility among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up their recent wins when oil supply concerns dominated the headlines again. The API report showed an increase of 3.387 million barrels of crude oil while other energy supplies also piled up. In New Zealand, the dairy auction showed a 7.4% slump in dairy prices while the employment report printed strong headline figures. Underlying data, however, revealed weaker labor force participation. In Australia, building approvals beat expectations but the trade balance came in short. Crude oil inventories from the EIA are due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 4, 2016)

USD

The US dollar suffered a sharp selloff during the New York session as data came in mixed and Fed official Dudley said that the currency's appreciation might be damaging to the economy. The ADP non-farm employment change report indicated a larger than expected gain of 205K versus the projected 193K gain while the previous reading was upgraded from 257K to 267K. However, the ISM non-manufacturing PMI fell from 55.3 to 53.5, worse than the estimated dip to 55.1, and most of the components reflected declines.

EUR

The euro was able to take advantage of dollar weakness but was still lower against its higher-yielding counterparts. Some of the euro zone services PMI readings from top economies saw downgrades and the region's retail sales figure came in short of expectations with a meager 0.3% gain. There are no major reports due from the region today but ECB head Draghi has a testimony lined up.

GBP

The pound could be in for a lot of volatility with the BOE statement coming up. Along with this is the release of the BOE Inflation Report, which contains their revised forecasts for growth and inflation, and the MPC minutes which would show the policymakers' biases. Dovish remarks echoing Carney's previous downbeat statements could mean more losses for the UK currency.

CHF

The franc advanced to the dollar but consolidated against most of its other currency peers.There were no reports out of Switzerland then and today has the SECO consumer climate index lined up. The reading is expected to improve from -18 to -15, indicating a lower level of pessimism.

JPY

The yen gave up some of its recent gains when risk appetite picked up and traders moved out of their long dollar holdings onto yen positions. There were no reports out of Japan then and there were no surprises from Kuroda's testimony. There are still no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls enjoyed a strong rally in recent sessions when oil prices bounced on speculations of an OPEC meeting. Reports showed that six nations are urging for a special meeting this month to discuss production cuts, which might then keep prices supported. US crude oil inventories rose by 7.8 million barrels versus the projected 3.7 million gain. Earlier today, Australia's NAB business climate index rose from 1 to 4. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 5, 2016)

USD

The US dollar suffered another sharp selloff in yesterday's New York session when data from the economy came in below expectations. Initial jobless claims rose 285K versus the projected 279K increase while factory orders slumped 2.9%. Up ahead, the NFP is slated to show a 189K gain in hiring, weaker compared to the previous 292K increase but still likely enough to keep the jobless rate at 5.0%.

EUR

The euro took advantage of dollar weakness and managed to post some gains against some of its peers as well. Euro zone growth forecasts were actually revised lower but it looks like this was already priced in. German factory orders data is due today and a 0.3% decline is set to follow the previous 1.5% gain.

GBP

The pound was one of the weakest performers when the BOE Super Thursday was more dovish than expected. Policymakers voted unanimously to keep rates on hold, with McCafferty rejoining the doves and backing down from his previous calls to hike. The BOE Inflation Report also featured downgrades on growth and inflation. There are no reports due from the UK today.

CHF

The franc regained ground when the Swiss SECO consumer climate index improved from -18 to -14, slightly higher than the estimated climb to -15. The Swiss foreign currency reserves report is due today and a large increase could lead to speculations of currency intervention, which might then drive the franc much lower.

JPY

The yen took advantage of the risk-off flows yesterday, especially after the BOE reports came out. There were no reports lined up from Japan then while today has the leading indicators due.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to carry on with their rallies, as oil prices posted more gains. Rumors that Turkey is gearing up to invade Syria could put additional downside pressure on supply, which could keep prices afloat. Australian retail sales came in flat instead of showing the estimated 0.5% gain for December. Canada's jobs report is due next and a 5.2K gain in hiring is eyed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 8, 2016)


USD


The US dollar advanced against its forex rivals when the underlying data of the NFP release showed green shoots. The economy added only 151K jobs in January versus the projected 189K gain while the December reading was downgraded from 292K to 262K. Still, the unemployment rate fell to its nine-year low of 4.9% while the participation rate improved. Average earnings rose 0.5% versus the projected 0.3% forecast. No reports are due from the US today.

EUR


The euro gave up ground to the dollar and yen but was still strong against its other rivals, even though German factory orders missed expectations. The report indicated a 0.7% drop instead of the projected 0.3% dip. German industrial production and euro zone Sentix investor confidence numbers are due today.


GBP


The pound managed to limit its losses to the dollar but weakened to the commodity currencies. There were no reports out of the UK then and there are no reports due today.

CHF


The franc managed to stay steady against the dollar while advancing to the euro on Friday. Swiss foreign currency reserves actually fell to 575 billion CHF, indicating that the SNB isn't intervening in the financial markets. There are no reports due from the Swiss economy today.

JPY


The yen was able to score gains against its higher-yielding counterparts but was no match to dollar strength. Japanese leading indicators fell from 103.5% to 102% to indicate potential weakness in the economy.

Commodity Currencies (AUD, NZD, CAD)


The Aussie lost a lot of ground to the dollar as retail sales fell flat instead of showing the estimated 0.3% gain while the RBA statement indicated scope for further easing. Chinese banks are on holiday today which suggests some consolidation for AUD and NZD pairs. In Canada, the jobs data missed expectations and showed a 5.7K decline in hiring versus the projected 5.2K increase.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 09, 2016)

USD

The US dollar regained ground to the higher-yielders, except for the euro, franc, and yen. Risk aversion allowed the safe-haven currency to get back on its feet even though there were no major reports released. JOLTS job openings and wholesale inventories data are due today.

EUR

The euro advanced to the dollar and comdolls but lost ground to the yen and franc. Euro zone Sentix investor confidence slipped from 9.6 to 6.0, worse than the projected drop to 7.2. German industrial production and trade balance are due today, with weak data likely to weigh on the shared currency's gains.

GBP

The pound was one of the weakest performers of the bunch as there were no reports to keep it supported. UK BRC retail sales monitor data showed a 2.6% rebound but was still unable to give the currency a boost. UK trade balance and a speech by MPC member Cunliffe are lined up today.

CHF

The franc resumed its rally from last week, as the SNB foreign currency reserves showed no evidence of intervention. Swiss unemployment rate is due today and a rise from 3.4% to 3.5% is eyed, likely to push the franc a bit lower.

JPY

The yen was one of the biggest winners, as it advanced against its currency rivals thanks to risk-off moves. Data from Japan was actually weaker than expected but traders appeared to prefer the Japanese currency against its other safe-haven peer, the US dollar. Preliminary machine tool orders data is due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up a lot of losses at the start of the week, even as the absence of Chinese traders kept markets in the green during the Asian session. The meeting between Venezuela and small oil-producing nations failed to bear fruit, weighing on oil prices again. In Australia, the NAB business confidence index held steady at 2, not showing any improvement.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 10, 2016)

USD

The US dollar was in a weaker spot yesterday even as it put up a fight against the comdolls. Data from the US economy came in mixed, with JOLTS job openings showing a gain and the NFIP small business index declining. Fed head Yellen's speech might be a strong catalyst for directional plays today as traders are waiting to hear more clues on whether a March hike is possible or not.

EUR

The euro chalked up strong gains against its peers and even rebounded against the Japanese yen. Data from the euro zone was actually weaker than expected as the German industrial production report indicated a 1.2% decline instead of the projected 0.2% uptick. French and Italian industrial production numbers are due today.

GBP

The pound managed to hold steady against the dollar and yen while racking up some gains against the comdolls. Today has the manufacturing and industrial production reports on tap and weak readings might be in the cards given how the previous reports turned out. UK manufacturing production is expected to have stayed flat in December.

CHF

The franc carried on with its advance against the dollar and euro, as the Swiss jobless rate held steady at 3.4% instead of rising to the estimated 3.5% figure. There are no reports up for release from the Swiss economy today.

JPY

The Japanese yen lost a bit of ground when risk appetite improved early yesterday but managed to get back on its feet later on. Data from Japan has been weaker than expected, with producer prices down 3.1% versus the projected 2.8% fall.

Commodity Currencies (AUD, NZD, CAD)

The Loonie ignored another buildup in oil stockpiles as it tried to hold on to its current levels. US crude oil inventories data is due today and an increase of 3.1 million barrels is eyed, likely to weigh on prices again. In Australia, the Westpac consumer sentiment report showed a 4.2% gain while HIA new home sales jumped 6.0%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 11, 2016)

USD

The US dollar had a volatile day as it initially reacted positively to Yellen's remarks but eventually returned its recent gains. According to Yellen, the equity market selloff might have a negative impact on overall growth and that they'd continue to watch the markets closely to see if any adjustments to their tightening path should be made. She also mentioned that she's unsure if the Fed can legally implement negative deposit rates. Initial jobless claims and another testimony from Yellen are on today's docket.

EUR

The euro was able to advance against most of its rivals except for the Japanese yen. Data from the euro zone was still mostly weaker than expected, as France and Italy printed negative industrial production readings. There are no major reports due from the euro zone today.

GBP

The pound managed to make a quick bounce against most of its counterparts even though data from the UK missed expectations. Manufacturing production fell 0.2% instead of staying flat while industrial production sank 1.1% instead of falling by only 0.1%. There are no major reports due from the UK today.

CHF

The franc continued to advance against most of its counterparts as it appears to be supported by risk-off flows. There were no reports out of Switzerland yesterday while today has the Swiss CPI on tap. A 0.3% decline in price levels is eyed and weak data might revive intervention speculations.

JPY

The yen took advantage of the risk-off market mood to chalk up more gains against its rivals. There were no reports out of Japan then and Japanese banks are closed for the holidays today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls chalked up some gains against the dollar but were no match to yen strength. US crude oil inventories showed a decline in stockpiles but did little to support prices as news of energy companies suffering losses dominated the headlines. There are no major reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 12, 2016)

USD

The US dollar was unable to take a lot of advantage of the safe-haven flows yesterday as Fed Chairperson Yellen warned that central bank officials are watching exchange rates closely before making any monetary policy adjustments. This echoes FOMC member Dudley's remarks indicating that dollar strength might actually be harmful for the US economy. For today, US retail sales reports are due and a 0.1% uptick in the headline figure is eyed while the core version of the report could show a flat reading.

EUR

The euro managed to hold on to some of its wins despite the slump in the European stock market, fueled by concerns about the banking sector and a possible Grexit. Up ahead, preliminary GDP readings from the euro zone and its top economies could serve as catalysts for strong euro moves.

GBP

The pound was still in a weak spot due to downbeat manufacturing production data released the previous day and the looming possibility of a Brexit. Only the construction output report is due from the UK today and another downbeat reading could spur more losses for the British currency.

CHF

The franc was able to chalk up some gains against the dollar but lost ground to the euro as currency intervention talk started to hit the airwaves. Although SNB officials have already maintained that the franc is overvalued, they've stopped short of actual intervention based on the latest foreign currency reserves data. Swiss CPI was weaker than expected with a 0.4% decline versus the projected 0.3% drop. There are no reports due from the Swiss economy today.

JPY

The yen surged against its forex rivals thanks to yet another round of risk aversion but quickly spiked when rumors of central bank intervention were spread. A Japanese official mentioned in an interview that they are watching FX movements closely and with urgency. There are no reports due from the Japanese economy today, which suggests that risk sentiment could push yen pairs around again.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly unchanged to the dollar but ended weaker against the yen, as risk-off flows dominated. There were no major releases out of the comdoll economies, although news of an OPEC compromise appears to be lifting oil prices. OPEC leaders seem willing to cut production only if their non-OPEC counterparts also agree to do so, but Iran has previously stressed that they plan to increase production.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Feb 15, 2016)

USD

The US dollar was able to rebound on Friday, thanks to upbeat retail sales figures and profit-taking off short positions ahead of the weekend. Headline retail sales rose 0.2% instead of just 0.1% while the core figure indicated a 0.1% uptick versus the projected flat reading. Import prices fell 1.1% versus the projected 1.4% slump while the UoM consumer sentiment index slipped from 92.0 to 90.7. US banks are closed for President's Day today.

EUR

The euro returned some of its recent wins to its counterparts last Friday even as German and euro zone GDP readings came in line with expectations of 0.3% growth. Euro zone industrial production fell 1.0% instead of rising by the projected 0.3% figure. Euro zone trade balance is due today and a smaller surplus of 22.4 billion EUR is eyed compared to the previous 22.7 billion EUR surplus.

GBP

The pound managed to hold on to some of its recent wins despite weaker than expected UK quarterly construction output. The report showed a 1.5% increase versus the projected 2.0% gain but still chalked up a recovery from the previous 1.1% drop. Earlier today, UK Rightmove HPI showed a 2.9% gain in prices.

CHF

The franc got back on its feet at the end of the week on the lack of intervention talk from SNB officials. There are no reports due from the Swiss economy today so the franc could still advance if risk aversion stays in play.

JPY

The yen had another losing day as risk appetite improved and intervention fears weighed on the Japanese currency. Over the weekend, the preliminary GDP reading from Japan showed a 0.4% contraction versus the projected 0.3% reduction in growth. BOJ Governor Kuroda has a speech in parliament today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance against their lower-yielding peers thanks to stronger talks of an OPEC compromise. Earlier today, Chinese trade balance came in stronger than expected at a 406 billion CNY surplus versus the projected 389 billion CNY figure. New Zealand quarterly retail sales are due in the next Asian session and a 1.4% gain in the core figure is eyed.

By Kate Curtis from Trader's Way