Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (July 28, 2015)

USD

The US dollar was in a weak spot recently, despite stronger than expected data from the economy. Headline durable goods orders showed a 3.4% jump versus the projected 3.2% gain but the previous reading was downgraded to show a 2.2% decline. Core durable goods orders saw a 0.8% increase instead of the projected 0.4% uptick, following the previous flat reading. For today, US CB consumer confidence data is due and a drop from 101.4 to 100.1 is eyed.

EUR

The euro continued to advance against its forex rivals as Greek talks showed positive developments. Data from the euro zone was also better than expected, with the German Ifo business climate index improving from 107.5 to 108.0, higher than the projected 107.6 figure. For today, there are no reports lined up from the euro zone.

GBP

The pound was stuck in consolidation against most of its forex counterparts when traders sat on their hands ahead of the UK GDP release today. The economy is expected to show a 0.7% growth figure, stronger than the previous quarter’s 0.4% expansion. A higher than expected GDP figure could remind traders that the BOE is moving towards a more hawkish stance, which could spur more gains for the pound.

CHF

The franc sold off against its forex counterparts once more, even with the lack of data from Switzerland. There are still no reports lined up from the Swiss economy today, suggesting that the currency might keep selling off if the current market sentiment persists.

JPY

The yen regained a bit of ground, thanks to the risk-off market environment. There have been no reports released from Japan but it looks like the selloff in global equities is leading traders to flee to the safe-haven yen. There are still no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was off to a poor start since gold prices continued to tumble early on in the week. There have been no reports released from the comdoll economies recently, making the Loonie sensitive to oil price trends as well. Underlying inflation data from Canada is up for release today but risk sentiment could play a bigger role in price action.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 29, 2015)

USD

The dollar was hit by profit-taking activity in yesterday’s US trading session, with traders closing off their long positions ahead of the FOMC statement today. Data from the US came in mixed yesterday, as the CB consumer confidence index fell from 99.8 to 90.9 versus the projected 100.1 figure while the Richmond manufacturing index beat expectations. The Fed could hesitate to commit to any tightening this year, as another set of commodity price declines are in the cards. However, if Yellen gives upbeat remarks, the US dollar could regain a lot of ground.

EUR

The euro gave back some of its recent wins since there were no reports released from the euro zone yesterday. Today has the German GfK consumer sentiment figure on tap and an unchanged reading from the previous 10.1 figure is expected. Stronger than expected results could give the shared currency a boost while a drop could lead to further losses.

GBP

The pound drew a bit of support from the UK preliminary GDP release, which came in line with expectations of 0.7% growth for Q2. On a more upbeat note, the previous reading was upgraded to show a 0.4% expansion. Medium-tier data from the UK are lined up today, namely net lending to individuals, mortgage approvals, and CBI realized sales.

CHF

The franc regained a bit of ground in recent trading sessions, mostly because traders booked profits off their dollar trades and possibly pursued other safe-havens like the Swissy. The Swiss UBS consumption indicator is due today and an improvement from the previous 1.73 reading might lead to more franc gains.

JPY

The yen gave back its recent wins as risk sentiment improved in recent trading sessions. Earlier today, Japan printed a stronger than expected retail sales figure of 0.9% versus the projected 0.8% increase but weaker compared to the previous 3.0% gain. No other reports are lined up from Japan today, indicating that risk sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to score some gains in recent sessions, despite the selloff in Chinese equities and commodities. The Chinese government and central bank doled out another round of stimulus efforts to stem the selloff in the stock market, leading to a bounce among comdolls as well. Earlier today, RBNZ Governor Wheeler said that the New Zealand economy isn’t weak enough to warrant a large rate cut, and these words spurred gains for the Kiwi. No reports are due from the comdolls today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 30, 2015)

USD

The US dollar had a volatile time during the FOMC statement but generally ended higher against its currency counterparts. The Fed didn’t give any explicit remarks on potential rate hikes but upgraded its wording to show a more optimistic assessment of the labor market. They added that they will continue to wait for some improvements in the jobs market to see if they can afford to tighten soon. The US is set to print its advanced GDP reading today and a 2.6% growth figure is eyed for the second quarter of the year.

EUR

The euro gave up a bit of ground in recent trading, even though data came in line with expectations. Germany’s GfK consumer climate reading stayed unchanged at 10.1 as expected. Today has the German preliminary CPI and unemployment change data on tap, along with Spain’s flash CPI and GDP figures. Strong data could allow the euro to regain traction against its forex rivals.

GBP

The pound gave up ground to the dollar but managed to stay strong against its other peers, despite mixed reports from the UK. Net lending to individuals was better than expected at 3.8 billion GBP while the previous month’s reading saw an upgrade to 3.5 billion GBP. CBI realized sales data came in weaker than expected as the reading fell from 29 to 21 instead of improving to 30. For today, there are no reports due from the UK.

CHF

The franc weakened against the dollar but advanced to the euro, as the UBS consumption indicator landed at 1.68. The previous reading was downgraded from 1.73 to 1.62 though, indicating that conditions were worse than initially reported. The KOF economic barometer is due today and a climb from 89.7 to 90.1 is expected.

JPY

The yen was a big loser in recent trading, perhaps driven mostly by the strong rally in USDJPY after the FOMC statement. Risk appetite also had a bit of improvement when Chinese equities stabilized after the government’s and central bank’s intervention efforts. Earlier today, Japan reported a better than expected preliminary industrial production increase of 0.8% versus the projected 0.4% rise.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up their recent wins to the dollar but remained afloat against some of their currency counterparts, thanks to a strong pickup in oil prices. Earlier today, Australia reported a worse than expected 8.6% slide in building approvals versus the projected 0.8% fall while import prices logged in a 1.4% gain as expected. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 31, 2015)

USD

The US dollar gave up some of its gains when the US advanced GDP reading missed expectations. The economy expanded by only 2.3% in the second quarter versus expectations of 2.6% growth. Revisions to previous data also suggested that the economy didn’t perform as strongly as initially reported. Later today, the Chicago PMI and revised UoM consumer sentiment data are up for release and these could still spur strong dollar moves before the end of the week.

EUR

The euro sold off sharply against most of its peers when the IMF expressed doubts about the third bailout program for Greece. As it turns out, the institution would like to see debt relief from the country’s creditors to ensure that the country can eventually make it out of the debt cycle. However, this idea has been strongly opposed by Germany and most of the other European governments. Data from the euro zone was mostly weaker than expected, with Germany indicating a 9K increase in joblessness and Spain’s CPI and GDP falling short of expectations. German and French consumer spending reports are due today, along with euro zone flash CPI readings.

GBP

The pound managed to hold on to some of its recent gains, except against the dollar and the yen. The GfK consumer confidence index slipped from 7 to 4 instead of landing at 5, reflecting weaker optimism in the UK. There are no reports due from the UK today.

CHF

The franc carried on with its selloff to the dollar, despite stronger than expected KOF economic barometer readings. The figure climbed to 99.8, outpacing the consensus at 90.3, while the previous reading was upgraded to 89.8. There are no reports due from Switzerland today.

JPY

The yen seemed unnerved from the latest set of disappointing figures from Japan, as household spending slumped by 2.0% instead of showing the projected 2.0% gain while the unemployment rate climbed from 3.3% to 3.4% in June. The Tokyo core CPI showed a 0.1% decline instead of staying flat but the national core CPI managed to post a small 0.1% uptick. Japanese housing starts are still on the docket for today.

Commodity Currencies (AUD, NZD, CAD)

The Loonie suffered a fresh round of selling after oil prices resumed their tumble. In Australia, yesterday’s building approvals report showed a 8.2% drop but the currency was able to draw support from today’s stronger-than-expected PPI release. The report showed a 0.3% gain in producer prices for the second quarter, higher than the projected 0.2% uptick. In New Zealand, the ANZ business confidence index slumped from -2.3 to -15.3 in July. Canada’s monthly GDP report is on tap for today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 3, 2015)

USD
The US dollar had a volatile trading day on Friday, as profit-taking took place at the end of the month. Economic data from the US came in mixed, with the employment cost index falling short of expectations with a mere 0.2% uptick instead of the projected 0.6% increase and the Chicago PMI beating forecasts. The UoM consumer sentiment index was downgraded from 93.3 to 93.1 instead of being upgraded to the projected 94.2 figure. For today, the US core PCE price index is due, along with personal spending and income reports. The ISM manufacturing PMI is also up for release and the employment sub-index could draw close attention.

EUR
The euro is still on a weak spot, thanks to news that the IMF is no longer on board with the third bailout for Greece. Negotiations are still ongoing, which means more uncertainty for the shared currency. Final manufacturing PMI readings from the euro zone’s top three economies are due today and upgrades could mean gains for the euro while downgrades could spur more losses.

GBP
The pound advanced against most of its rivals, particularly the commodity currencies, in recent trading. There have been no economic reports out of the UK last Friday but traders seem to be bracing themselves for this week’s set of reports. For today, the manufacturing PMI is due and a climb from 51.4 to 51.6 is expected.

CHF
The franc was still edging lower to the dollar on Friday, as there were no reports out of Switzerland. Today has the Swiss manufacturing PMI on tap and a climb from 50.0 to 50.6 might be seen. A weaker than expected reading could mean more franc weakness while strong figures could spur gains.

JPY
The yen regained ground to its forex rivals on Friday, as risk aversion remained in play. Data from Japan was mostly weaker than expected, as household spending fell by 2.0% while the inflation readings showed a standstill. Earlier today, the final manufacturing PMI for July was downgraded from 51.4 to 51.2. No other reports are lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)
The comdolls resumed their selloff on Friday, thanks to weak data from Canada. The monthly GDP reading showed a 0.2% contraction for May, following the previous 0.1% contraction and signaling that the economy is in recession since the GDP figures have been negative in six out of the last seven months. Over the weekend, Chinese official PMI readings came in mostly in line with expectations, allowing the Aussie to regain a bit of ground.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 4, 2015)

USD

The US dollar continued to advance against its forex peers at the start of the week, despite weaker than expected data from the US economy. The ISM manufacturing PMI slid from 53.5 to 52.7 in July, reflecting a slower pace of expansion in the industry and showing a decline in the employment component. The core PCE price index held steady at 0.1% while personal spending and income also came in line with expectations. Today has the factory orders report on tap and a 1.8% rebound is eyed.

EUR

The euro gave up ground to some of its counterparts, even though some of the euro zone PMI readings enjoyed slight upward revisions. The lack of progress in Greece’s third bailout appears to be weighing on the shared currency again, even though data has been stable. The Spanish unemployment change report is lined up today and it might show a 45.6K drop in joblessness, a slower pace of decline compared to the previous release.

GBP

The pound was able to extend its rallies, thanks to UK manufacturing PMI coming in better than expected. The figure climbed from 51.4 to 51.9, outpacing the consensus at 51.6 and reflecting a faster pace of growth in the industry. The construction PMI is up for release today and even though this doesn’t usually spur a strong reaction among pound pairs, another upside surprise could mean sustained gains for the pound. Analysts are expecting the reading to climb from 58.1 to 58.6.

CHF

The franc continued to sell off against the dollar and some of its other forex rivals, as Swiss data came in weaker than expected. The manufacturing PMI fell from 50.0 to 48.7, indicating industry contraction, instead of improving to the projected 50.6 figure. There are no reports lined up from Switzerland today.

JPY

The yen advanced against most of its counterparts, as risk aversion kept the lower-yielding currency supported. There have been no major reports out of Japan, although the final manufacturing PMI for July was downgraded from 51.4 to 51.2. There are still no reports due from Japan today, which suggests that risk sentiment could play a role in price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide in recent trading sessions, weighed down again by weaker commodity prices and a fall in Markit’s Chinese manufacturing PMI. Earlier today, the Aussie got a boost from better than expected retail sales figures, which showed a 0.7% gain versus the projected 0.5% uptick and a positive revision in the previous report. Australia’s trade balance was also better than expected, although it marked a wider deficit compared to the previous month. The RBA is set to announce its monetary policy decision later on and no changes to the 2.00% rate is expected. New Zealand will have its global dairy trade auction and release its quarterly jobs data in the early Asian trading session tomorrow.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 5, 2015)

USD

The US dollar regained a bit of ground in recent trading, as economic data came in line with expectations. Factory orders picked up by 1.8%, a rebound from the earlier 1.1% decline. For today, the ADP non-farm employment change report is due and a 216K increase is eyed, weaker compared to the previous 237K gain. A lower than expected figure could set the tone for a disappointing NFP report, which might lead to a sharp dollar selloff, while a strong figure could spur rallies. Also lined up today is the US ISM non-manufacturing PMI, which is expected to climb from 56.0 to 56.3.

EUR

The euro returned its recent wins to the dollar and most of its forex rivals, despite better than expected jobs data from Spain. The country showed a 74K drop in unemployment, larger than the projected 45K reduction but smaller than the previous 94.7K drop. The selloff in Greek equities when the country’s stock market reopened was mostly to blame for the drop in the shared currency’s value. For today, euro zone retail sales and final PMI readings from some of its top economies are lined up.

GBP

The pound was stuck in consolidation to most of its forex peers since traders are waiting to see how the Super Thursday turns out. UK construction PMI was weaker than expected at 57.1, down from the previous 58.1 figure and lower than the projected 58.6 reading. For today, the services PMI is due and it could still spur pound volatility since the sector accounts for majority of overall economic activity. Analysts are expecting to see a dip from 58.5 to 58.1, which might lead to a bit of pound weakness.

CHF

The franc sustained its losses to most of its counterparts because there were no reports from Switzerland to keep the currency afloat. Swiss CPI is due today and a 0.4% drop in price levels is expected to follow the previous 0.1% uptick. Weaker than expected data could mean more losses for the franc while a strong figure could spur gains.

JPY

The yen had a mixed performance since it functioned mostly as a counter currency in recent trading sessions. Data from Japan was weaker than expected, with average hourly earnings showing a 2.4% drop instead of the projected 0.9% increase. There are no reports lined up from Japan today, leaving risk sentiment in control.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi resumed its selloff after the GDT auction showed a 9.3% drop in dairy prices and the New Zealand jobs report fell short of expectations. The economy showed a mere 0.3% increase in hiring for the second quarter, short of the 0.5% expected gain, while the jobless rate climbed from 5.8% to 5.9%. The Aussie managed to hold on to most of its gains after seeing upbeat retail sales and trade balance figures, followed by a less dovish than expected RBA statement.

By Kate Curtis from Trader's Way

 

[FX Brother]

Thanks again! Detailed and thorough!

 

[katetrades]

Forex Major Currencies Outlook (Aug 6, 2015)

USD

Despite mixed economic reports from the US, the dollar managed to advance against most of its forex counterparts in recent trading. The ISM non-manufacturing PMI posted a huge upside surprise, as the reading climbed from 56.0 to 60.3 in July. However, the ADP non-farm employment change report turned out to be a disappointed as it printed a mere 185K increase in hiring, short of the projected 216K gain. Aside from that, the previous month’s figure was downgraded. This could set the tone for a weak NFP release on Friday, which might mean lower odds of a Fed rate hike in September.

EUR

Economic data from the euro zone came in mostly weaker than expected, except for the Spanish services PMI which climbed from 56.1 to 59.7. Euro zone retail sales showed a sharper than expected 0.6% drop instead of the projected 0.1% decline while Italian industrial production showed a large 1.1% tumble. Only the German factory orders report is up for release today and a 0.4% rebound is eyed.

GBP

Pound pairs were mostly in consolidation yesterday, despite weaker than expected UK services PMI which fell from 58.5 to 57.4. Traders are waiting for upbeat remarks in today’s set of top-tier central bank catalysts, namely the BOE decision, MPC minutes, and Inflation Report hearings. In the previous hearing, Carney said that the point at which they could hike rates is moving closer. If he reiterates this view, the pound could be in for more gains, but a cautious statement could force the currency to retreat.

CHF

The franc continued to sell off against its counterparts when Swiss CPI came in weaker than expected. The report showed a 0.6% monthly decline in price levels, worse than the projected 0.4% drop. Swiss SECO consumer climate data is due today and a drop from -6 to -7 is expected, with a lower than expected reading likely to spur more losses for the franc.

JPY

The yen was able to rack up more gains against most of its rivals, even though there were no reports released from Japan. Later today, the leading indicators is due and a climb from 106.2% to 106.9% is expected, which might allow the yen to go for more wins. Other than that, risk sentiment might continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Aussie got another boost from stronger than expected employment data, with a 38.5K increase in hiring versus the projected 10.2K gain. Stronger than expected trade balance from Canada also allowed the Loonie to regain a bit of ground, along with declining crude oil inventories in the US. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Aug 7, 2015)

USD

The US dollar had a mixed performance as it reacted to currency-specific events from its forex rivals. Aside from that, traders are probably positioning ahead of the NFP release later today, as this could serve as a sign of whether or not the Fed can be able to hike interest rates by September. Analysts are expecting to see a 215K increase in hiring, slightly slower compared to the previous month’s gain, but an upside surprise could be enough to get dollar bulls charging. Keep in mind that Challenger job cuts showed a worse than expected increase in layoffs while the ADP report showed a weaker than expected reading, suggesting the possibility of a downside surprise.

EUR

The euro struggled to hold on to its recent gains even though data from the region was stronger than expected. German factory orders picked up by 2.0% versus the projected 0.4% uptick while euro zone retail PMI climbed from 50.4 to 54.2. German and French industrial production and trade balance numbers are lined up for today but traders might be paying closer attention to data from the US.

GBP

Super Thursday turned out to be a disappointment for the pound, as the MPC minutes and the Inflation Report indicated that the BOE isn’t ready to tighten monetary policy just yet. This was in contrast to Governor Carney’s hints that they’re moving closer to hiking interest rates. The central bank upgraded forecasts for growth, wage inflation, and business investment while downgrading projections for employment and CPI. Aside from that, only one MPC member voted to hike rates as opposed to market expectations of seeing two to three policymakers voting to tighten. UK trade balance is lined up today but this might not have such a huge impact on pound movement.

CHF

The franc carried on with its descent, thanks to weaker than expected data from Switzerland. The SECO consumer climate index showed a drop from -6 to -19 instead of the projected -7 figure, indicating an increase in pessimism. For today, the unemployment rate is due and no change to the previous 3.3% figure is eyed.

JPY

The yen had a mixed performance as it also reacted to currency-specific events, just like the US dollar. There have been no major reports out of Japan recently but the BOJ statement today could play a key role in yen price action. Apart from that, the NFP release might have a significant impact on USDJPY movement that might carry on to other yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Aussie enjoyed a bit of support from upbeat employment data, as the economy added 38.5K jobs in July versus the projected 10.2K increase. Earlier today, the RBA monetary policy statement showed a less dovish than usual outlook, allowing the Aussie to gain further ground. Meanwhile, Loonie traders are waiting for the release of Canada’s jobs data and Ivey PMI later today. Both reports are slated to show improvements but disappointing readings could spur more Loonie losses.

By Kate Curtis from Trader's Way