Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Sept 18, 2015)
USD

The US dollar suffered a sharp selloff after the FOMC statement since the Fed refrained from hiking interest rates.

There was only one member who called for a rate hike but he was outvoted by the rest of the committee who pointed out the risks stemming from China. Fed officials upgraded their growth forecast for 2015 but downgraded their estimates for the next two years. Despite that, 13 out of 17 central bankers still believe that a liftoff is possible before the end of the year.

EUR
The euro was able to take advantage of dollar weakness and surge past its other forex counterparts yesterday. There have been no reports out of the region yesterday while today has only the current account balance on tap. The surplus is expected to narrow from 25.4 billion EUR to 21.3 billion EUR.

GBP

The pound managed to advance against most of its forex rivals, despite weaker than expected UK retail sales data. Consumer spending ticked up by only 0.2% in August as expected but the previous report was downgraded to show a flat reading. There are no reports due from the UK today but BOE member Haldane is scheduled to give a speech.

CHF

The SNB decided to keep monetary policy unchanged as expected while jawboning their currency in saying that they're open to intervening in the forex market if necessary. SNB officials sounded more dovish than usual, especially since the ECB has also expressed openness to further easing. There are no reports lined up from the Swiss economy today.

JPY

The yen took advantage of dollar weakness but was unable to score wins against the rest of its forex peers. Japan's trade balance showed a smaller deficit of 0.36 trillion JPY from the earlier 0.38 trillion JPY, but the components of the report revealed a decline in both imports and exports, which reflects a downturn in local and international demand. The BOJ meeting minutes are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were barely able to sustain their gains against the dollar, as risk aversion seemed to weigh on these higher-yielders. There have been no reports out of the comdoll economies yesterday while today has Canada's CPI reports on tap. The headline CPI could show a flat reading while the core CPI is slated to post a 0.2% uptick.

By Kate Curtis from Trader's Way[/I

 

[katetrades]

Forex Major Currencies Outlook (Sept 21, 2015)

USD

The US dollar was back with a vengeance on Friday, as traders booked profits of their short dollar trades after the FOMC statement. There were no major reports out of the US economy then while today has the existing home sales and a speech from FOMC member Lockhart. Any remarks favoring a rate hike this year could keep the US currency supported while cautious comments suggesting a delay in the liftoff could spur losses.

EUR

The euro barely reacted to the Greek election results, as the shared currency is still being weighed down by the dovish rhetoric from the ECB. Greek Prime Minister Tsipras has been able to stay in power, ensuring that the bailout program can be implemented in time for the creditors' international review before the end of the year. Only the German PPI report is due from the euro zone today and producer prices are slated to show a 0.3% decline.

GBP

The pound retreated against most of its rivals on Friday, despite the lack of top-tier releases from the UK. BOE member Haldane gave a speech then and assured that the UK economy is staying resilient amid the downturn in other parts of the globe. There are no reports lined up from the UK today.

CHF

The franc returned its recent wins to the dollar on Friday, as there were no reports to give the franc any support. There are still no reports lined up from Switzerland today, which suggests that franc pairs might be sensitive to risk sentiment.

JPY

The yen gave up ground to the dollar and even gapped down over the weekend, but the Japanese currency has been able to advance against the rest of its peers when risk aversion stayed in play. There were no reports released from Japan on Friday and none are due today, suggesting that sentiment could stay in control of price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned their recent wins to the dollar and gave up further ground to the Japanese yen when risk aversion came back in play. Canada's inflation reports came in line with expectations, as the headline CPI showed a flat reading while the core CPI printed a 0.2% uptick. Over the weekend, New Zealand's Westpac consumer sentiment index showed a drop from 113 to 106, indicating a sharp decline in optimism. Visitor arrivals ticked up by 0.2% while credit card spending improved from 9.8% to 10.5%. BOC Governor Poloz is set to give a testimony later today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 22, 2015)

USD

The lack of any top-tier reports from the US or other major economies spurred a mixed performance among dollar pairs in recent trading. Traders are still weighing in on the latest FOMC statement and the Fed's decision to keep rates on hold for the time being while upgrading growth forecasts for the year. There are still no major reports out of the US economy today, with only a speech by Fed official Lockhart lined up.

EUR

The euro was still in a weak spot yesterday, with traders bearish on the shared currency ahead of the PMI releases and Governor Draghi's speech. The euro failed to draw enough support from the Greek election results, which more or less ensured that the current bailout program will be implemented without much conflict. Only the euro zone consumer confidence index is up for release today and no change from the previous -7 reading is eyed.

GBP

The pound managed to advance against some of its forex rivals in recent sessions, when the UK Rightmove HPI indicated a 0.9% rebound. There were no other reports out of the UK yesterday but it seems that the currency is drawing support from positive BOE rhetoric. UK public sector net borrowing and CBI industrial order expectations data are due today, along with a speech by BOE member Shafik.

CHF

The franc was still paling in comparison to its forex peers, as it mostly took its cue from euro weakness. There have been no reports out of Switzerland yesterday and none are due today, which suggests that the dovish SNB rhetoric might keep weighing the Swissy down.

JPY

The yen was stuck in consolidation against the comdolls but managed to chalk up gains against the euro. Yen traders are still out on a holiday until tomorrow, which explains the sideways movement of most yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide, as traders are projecting weak data from the Caixin manufacturing PMI release later this week. Data from New Zealand showed some improvements in visitor arrivals and credit card spending, but these weren't enough to get rid of speculations that the RBNZ is bound to announce another rate cut within the year. In Canada, wholesale sales data showed a flat reading instead of the projected 0.3% increase. Earlier today, Australia reported a 4.7% increase in house prices for the previous quarter, highlighting the housing boom in Sydney.

By Kate Curtis from Trader's Way

 

[katetrades]

Foerx Major Currencies Outlook (Sept 23, 2015)

USD

The US dollar advanced against its forex rivals when risk aversion returned to the financial markets, with the euro and pound chalking up the largest losses. Data from the US economy was mixed, with the HPI showing a larger than expected 0.6% increase versus the projected 0.4% gain and the Richmond manufacturing index tumbling from 0 to -5. Fed official Lockhart emphasized that he's counting on a rate hike for the year, reviving demand for the US dollar. US crude oil inventories and another speech by Lockhart are lined up today.

EUR

The euro was in for a heavy beating yesterday, despite the lack of top-tier data from the euro zone. Traders were likely pricing in expectations for today's events, namely the PMI releases and a speech by ECB Governor Draghi. He is expected to repeat the central bank's dovish bias while citing the recent downgrades in inflation figures. The PMI readings are generally expected to show weakness, underscoring the ECB's willingness to ease if necessary.

GBP

The pound suffered a selloff when data from the UK came in weaker than expected. The public sector net borrowing report showed a larger deficit of 11.3 billion GBP instead of the projected 8.7 billion GBP deficit while the previous reading suffered a downgrade to show a smaller surplus. The CBI industrial order expectations index fell from -1 to -7 to show a decline in order volumes. There are no reports due from the UK today but MPC member Broadbent has a testimony due.

CHF

The franc took its cue from the euro and sold off against most of its forex rivals, as traders predicted that any easing from the ECB would likely be followed by SNB intervention. The Swiss trade balance was actually better than expected at a surplus of 2.87 billion CHF versus the projected 2.78 billion CHF reading, but this was a smaller surplus compared to the earlier month.

JPY

The yen took advantage of the run in risk aversion to advance against the higher-yielding currencies but it was no match to the US dollar. There were no reports released from Japan yesterday since traders are still on a holiday until today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the lower-yielding dollar and yen in recent trading sessions when risk aversion popped in. Earlier today, Australia reported a 0.3% increase in its CB leading index, recovering from the previous 0.3% drop. The Chinese Caixin PMI is due today and another fall could spur selling for the comdolls and equities. Canadian retail sales figures are up for release later on, with the headline figure projected to show a 0.5% increase and the core figure expected to show a 0.4% gain.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 24, 2015)

USD

The US dollar's performance was a mixed one, as the currency simply reacted to country-specific events. Data from the US came in line with expectations, as the flash manufacturing PMI held steady at 53.0. Fed member Lockhart reiterated his upbeat tone but this had a minimal effect on the dollar since he already shared the same points in the past. Initial jobless claims and durable goods orders data are lined up today.

EUR

The euro enjoyed a bounce in yesterday's trading sessions after the region's PMI readings came in mostly in line with expectations. This was followed by a less dovish speech by ECB head Draghi who said that they're waiting for more time and evidence to decide if further easing is really necessary. For German central bank head Weidmann, the expansive monetary policy cannot be sustained, especially if the temporary effects of the energy slump start to fade. The German Ifo business climate and GfK consumer sentiment data are up for release today.

GBP

The pound sold off heavily against most of its forex rivals despite the lack of top-tier UK data. For MPC member Broadbent, monetary policy tightening could be warranted as wage inflation continues to pick up. There are still no major reports due from the UK economy today.

CHF

The franc took its cue from the euro to advance against some of its peers even though there were no reports out of Switzerland. The lack of easing bias from the ECB led some franc bears to ease up on their short positions, reducing expectations of easing from the SNB as well. There are no reports due from the Swiss economy today.

JPY

The yen gave up some of its recent wins to the euro but was able to gain traction against the commodity currencies. The return of Japanese traders today could pump up the activity during the Asian trading session, especially since the flash manufacturing PMI from Japan came in below expectations at 50.9 versus the projected 51.3 figure.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot yesterday, thanks to worse than expected data from China. Caixin reported a drop in the manufacturing PMI from 47.3 to 47.0 instead of the estimated improvement to 47.6. In addition, Canada's core retail sales figure showed a flat reading instead of the estimated 0.4% gain while the previous report suffered negative revisions. In New Zealand, the trade balance missed the consensus of a 875 million NZD deficit and printed a larger 1035 million NZD shortfall plus a downgrade in the earlier report.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 25, 2015)

USD

Dollar pairs tossed and turned in the charts yesterday when FOMC head Yellen gave hawkish remarks but economic data failed to support her upbeat bias. According to Yellen, a rate hike is possible this year as long as the headwinds to the domestic economy don't lead to any negative surprises. However, headline durable goods orders marked a 2.0% decline while the core version of the report printed a flat reading instead of the estimated 0.2% uptick. New home sales surprised to the upside at 552K versus the projected 516K figure. For today, the US final GDP reading for Q2 and revised UoM consumer sentiment index are due.

EUR

The euro gave back some of its recent gains after seeing mixed figures from Germany. The IFO business climate index came in better than expected at 108.5, up from the previous 108.4 figure and higher than the estimated 107.8 reading. However, the GfK consumer climate index marked a drop from 9.9 to 9.6, lower than the estimated 9.8 figure. A speech by ECB member Weidmann is lined up today, along with euro zone data on private loans and M3 money supply.

GBP

The pound got heavier in recent trading since there were no reports out of the UK to give it any support. There are still no major reports lined up from the UK economy today, although the FPC statement could provide additional volatility for pound pairs.

CHF

The franc erased some of its recent wins to its forex rivals even though there were no major catalysts lined up from Switzerland. There are still no reports due from the Swiss economy today, which suggests that the franc could move to the tune of risk sentiment.

JPY

The yen was off to a strong start during the return of Japanese traders after the long holiday but soon gave up its gains when the US dollar advanced. Earlier today, Japan reported a 0.2% decline in its Tokyo core CPI and a 0.1% drop in its national core CPI as expected. No other reports are due from Japan which means that risk sentiment might take control of yen price action.

Commodity Currencies (AUD, NZD, CAD)
The comdolls fell to fresh lows against the dollar and the yen but managed to bounce off near-term inflection points. There have been no major reports out of the comdoll economies yesterday, although the Kiwi was able to get a small boost from Fonterra's upgraded milk payout forecasts. There are no reports due from these economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 28, 2015)

USD

The US dollar was able to cap off a pretty good week, spurred mostly by hawkish remarks from Fed officials. Most FOMC members hinted that they're open to tightening before the end of the year, although they maintained that inflation remains weak. Data from the US was stronger than expected, with the final GDP reading enjoying an upward revision from 3.7% to 3.9% in Q2. For today, a bunch of FOMC members (Dudley, Tarullo, Evans, and Williams) are set to give more testimonies. Data on personal spending and income are also due, along with pending home sales and the core PCE price index.

EUR

The euro gave up ground on Friday, due mostly to weaker than expected data from the euro zone as private loans and M3 money supply came up short. There are no reports due from the euro zone today, which suggests that the shared currency could take its cue from market sentiment.

GBP

The pound was unable to recover by the end of the week, as there were no reports to give the British currency a boost. BOE MPC member Cunliffe is set to give a speech today and his monetary policy bias might have a huge impact on pound price action.

CHF

The franc followed in the euro's footsteps and weakened against the dollar, as there were no reports to give the Swiss currency any support back then. There are still no reports lined up from Switzerland today, which suggests that the franc could keep trailing the euro or move to the tune of risk sentiment.

JPY

The yen regained ground on Friday, presumably as traders booked profits off their short yen positions. There have been no reports out of Japan then and none are due today, indicating that market sentiment could stay in the driver's seat.

Commodity Currencies (AUD, NZD, CAD)

The comdolls ended the week mostly weaker against their currency rivals, as traders continued to price in the potential repercussions of the slowdown in China on the countries' trade activity. There are no reports lined up from Australia, Canada, and New Zealand for the rest of the day, leaving risk appetite in control of price action.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 29, 2015)

USD

The US dollar had a mixed performance, as it gained ground to the pound and comdolls but weakened against the yen and euro. FOMC officials had mixed views on a potential rate hike later this year, as FOMC member Evans expressed concerns about normalizing too soon. However, Fed officials Dudley and Williams sounded more optimistic in saying that a liftoff is likely to take place this year. Pending home sales was much weaker than expected with a 1.4% decline while personal spending showed a stronger than expected 0.4% gain. Personal income lagged with a bleak 0.3% uptick. US CB consumer confidence data is due today.

EUR

The euro managed to gain ground against the dollar and the comdolls, despite the lack of top-tier data from the region. The polls in Catalonia, Spain don't seem to be weighing on the shared currency so far, although this could set a precedent for cities looking to break away. German and Spanish preliminary CPI readings are due today and sharp declines might spur euro weakness.

GBP

The pound continued to sell off against its counterparts, despite the lack of any clear catalysts. Traders seem to be unwinding their previous long positions spurred by rate hike expectations, as recent reports from the UK seem to suggest that tightening will be pushed back further. UK net lending to individuals and CBI realized sales data are up for release today.

CHF

The franc followed in the euro's footsteps and advanced against its rivals, as risk aversion came into play. There were no reports out of Switzerland yesterday and none are due today, suggesting that the current trend might carry on.

JPY

The yen was able to take advantage of the run in risk aversion, as Asian equities are mostly weaker. There were no reports out of Japan yesterday while today also has an empty docket, indicating that sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide in recent trading sessions, weighed down by falling commodity prices and concerns in China. News reports showed that the Chinese government is being more open to foreign investment and that the PBOC might be ready to ease again, putting risk aversion back in play. There are no reports lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Sept 30, 2015)

USD

The US dollar was off to a strong start when risk sentiment weakened during the Asian trading session but gave back its recent wins when higher-yielders regained ground later on. Data from the US was better than expected, with the CB consumer confidence index rising from 101.3 to 103.0, reflecting stronger optimism. For today, the ADP non-farm employment change report is due and it might show a climb from 190K to 192K, suggesting a possible upside surprise in the NFP. Also lined up today is the Chicago PMI and a testimony by Fed head Yellen.

EUR

The euro continued to advance against most of its forex peers, albeit at a slightly slower pace. Data from the euro zone was weaker than expected, as the German preliminary CPI indicated a 0.2% drop versus the projected 0.1% decline while the Spanish flash CPI came in at -0.9% versus -0.6%. Employment and consumer spending reports are lined up from France and Germany today, with strong figures likely to give the shared currency another boost.

GBP

The pound was still unable to recover in recent trading, despite stronger than expected data from the UK. Net lending to individuals came in at 4.3 billion GBP versus the projected 4.1 billion GBP figure while the CBI realized sales index jumped from 24 to 49. UK current account balance and final GDP readings are up for release today, as strong data could allow the UK currency to gain traction.

CHF

The franc advanced to the dollar once more, even though there were no reports out of Switzerland. Today has the KOF economic barometer on tap and a climb from 100.7 to 101.2 is expected, possibly spurring more gains for the Swiss currency

JPY

The yen raked in gains during the earlier trading sessions, thanks to falling Asian equities. Earlier today, Japan printed a weaker than expected 0.8% gain retail sales versus the projected 1.2% annualized increase. Industrial production was also weaker than expected since the report showed a 0.5% drop instead of the estimated 1.1% gain while the previous reading suffered a downgrade.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a shaky start but managed to hold on to their current levels when risk appetite returned in the latter trading sessions. Underlying inflation readings from Canada came in better than expected while New Zealand reported a climb in its ANZ business confidence index from -29.1 to -18.1. Australian building approvals data is still due and a 1.8% decline is eyed. Later on, Canada will release its monthly GDP reading and the US will print its latest crude oil inventories update.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Oct 1, 2015)

USD

The US dollar had a mixed performance after data from the economy came in mixed. The ADP non-farm employment change beat expectations with a 200K gain versus the projected 192K increase and the previous 186K rise, spelling positive prospects for Friday's NFP report. However, the Chicago PMI came in below consensus at 48.7 down from the previous 54.4 reading, indicating a slump to industry expansion. Initial jobless claims and the ISM manufacturing PMI are due today, with the former expected to show a 273K figure and the latter likely to print a drop from 51.1 to 50.8.

EUR

The euro suffered a nasty selloff against its forex rivals when the euro zone CPI estimates showed that deflation is taking place. The headline CPI came in at -0.1% versus the projected 0.0% figure, dragged down by an 8.9% drop in energy prices. The core CPI held steady at 0.9% as expected, but this didn't seem to be enough to quash easing speculations. Final manufacturing PMI readings are due from the region today with downbeat results likely to push the shared currency lower.

GBP

The pound slowed down from its recent selloff against the dollar and recovered against the euro, but it was still mostly weaker to the comdolls. UK current account balance came in better than expected while the final GDP was unchanged at 0.7% for Q2. The UK manufacturing PMI is due today and a drop from 51.5 to 51.3 is expected.

CHF

The franc also suffered a selloff yesterday, despite mixed reports from Switzerland. The UBS consumption indicator improved from 1.59 to 1.63 but the KOF economic barometer fell from 101.2 to 100.4. To top it off, the franc was also dragged down by deflation in the euro zone, as the prospect of ECB easing could spur SNB intervention. Swiss retail sales data is due today and a 0.3% rebound is eyed.

JPY

The yen gave up some of its recent wins when risk appetite appeared to improve in the latter trading sessions. Data from Japan was also weaker than expected, with retail sales showing a smaller than expected 0.8% gain and the preliminary industrial production report showing a surprise 0.5% decline. Earlier today, the Tankan survey indicated a fall in the manufacturing component from 15 to 12 and a climb in the non-manufacturing component from 23 to 25.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a decent rally against the European currencies and the safe-havens, as commodity prices picked up slightly. This was partly spurred by the stronger than expected Canadian monthly GDP reading of 0.3% and the Chinese PMI readings coming in line with expectations. The official government manufacturing PMI ticked up from 49.7 to 49.8 while the Caixin version was upgraded from 47.0 to 47.2. There are no other reports due from the comdoll economies for the rest of the day.

By Kate Curtis from Trader's Way