Daily Market Outlook by Kate Curtis from Trader's Way

[TradersWay]

Forex Major Currencies Outlook (June 03, 2016)

USD

The US dollar was able to take advantage of the run in risk aversion but was still mostly weaker against the yen and Kiwi. Economic data from the US came in better than consensus, as the initial jobless claims landed at 267K versus the projected 270K figure. The US NFP report is due today and a 159K increase in hiring is eyed, lower than the earlier 160K rise. Average hourly earnings could post a 0.2% uptick but a weaker reading could be bearish for the dollar.

EUR

The euro lost ground after the ECB decision even though the central bank did not take policy action. Policymakers upgraded their growth forecast for the year from 1.4% to 1.6% and the HICP from 0.1% to 0.2% but Draghi noted that Q2 growth could be slower than Q1 and that inflation could remain low for the coming months. Final services PMI readings are due from the top euro zone economies today.

GBP

The pound regained a bit of ground against its peers despite weaker than expected UK construction PMI. The index fell from 52.0 to 51.2, lower than the estimated 51.9 reading. For today, the services PMI is due and a rise from 52.3 to 52.5 is eyed, although traders could still focus on Brexit updates.

CHF

The franc was stuck in consolidation since there were no reports out of Switzerland yesterday. There are still no major reports lined up from the Swiss economy today so the franc could keep moving sideways or take its cue from market sentiment.

JPY

The yen raked in more gains after Prime Minister Abe recently confirmed the sales tax hike delay. Average cash earnings in Japan rose 0.3%, lower than the estimated 0.9% gain. No other reports are due from Japan today, keeping the yen sensitive to market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and the Loonie were mostly weaker while the Kiwi was able to hold on to its gains. The OPEC failed to come up with an agreement to cap production levels but the meeting seemed relatively positive, as the nations committed to work together in stabilizing the market. No other reports are up for release from the comdoll economies for the rest of the week.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 06, 2016)

USD

The US dollar was sold off sharply on Friday when the NFP report printed a mere 38K increase in hiring versus the estimated 159K gain. In addition, the previous reading was downgraded from 160K to 123K while the ISM non-manufacturing PMI showed a sharper drop to 55.7 to 52.9. The US labor market conditions index is due today but traders could pay closer attention to Fed Chairperson Yellen's speech.

EUR

The euro took advantage of dollar and pound weakness but was barely able to hold on to its gains against its other rivals. Euro zone final services PMI came in mostly weaker than expected while the region's retail sales showed a flat reading. German factory orders data is due today and a 0.4% decline is eyed while Brexit-related updates are also affecting euro price action.

GBP

The pound was the biggest loser in recent sessions as more Brexit polls showed a lead in favor of those voting to leave the EU. In addition, remarks from pro- Brexit leaders on immigration and security appear to be yielding more "leave" votes. UK services PMI was stronger than expected at 53.5 versus the 52.5 estimate. There are no major reports due from the UK today.

CHF

The franc advanced against the dollar and its European counterparts thanks to the surge in risk aversion in the region. There were no reports from Switzerland then and none are due today.

JPY

The yen was one of the biggest winners on Friday as the drop in dollar demand led traders to flock to the yen. Japanese average cash earnings was actually weaker than expected with a mere 0.3% uptick. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to rally against the dollar but still gave up ground to the yen. Canada's trade deficit was wider than expected at 2.9 billion CAD versus the estimated 2.5 billion CAD shortfall. In Australia, the MI inflation gauge fell by 0.2% while ANZ job advertisements rebounded by 2.4%. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 07, 2016)

USD

The US dollar was still mostly weaker in recent sessions, as Fed Chairperson Yellen expressed her disappointment over the latest jobs figures. She gave a pretty balanced testimony, citing that rates will have to be hiked at some point but that tightening too soon could expose the economy to larger risks. Only medium-tier reports are due from the US today so risk sentiment might play a larger role in price action.

EUR

The euro advanced against most of its rivals despite mixed euro zone data. The region's retail PMI climbed from 47.9 to 50.6 to show a return to industry expansion but the German factory orders report printed a worse than expected 2.0% slide versus the estimated 0.4% dip. German industrial production and French trade balance numbers are due today.

GBP

The pound managed to recover from its previous slide as a few polls still indicated a lead in favor of staying in the EU. There were no reports out of the UK economy yesterday while today has the Halifax HPI due, although Brexit updates might still steal the show.

CHF

The franc advanced against the dollar but returned some of its gains against its other counterparts as risk appetite improved. There were no reports out of the Swiss economy yesterday while today has the SNB foreign currency reserves data, which might indicate if the central bank is interfering in the forex market.

JPY

The yen returned some of its recent wins as risk appetite returned to the markets. There were no reports out of the Japanese economy yesterday and none are due today. The country's current account balance, final GDP reading, and Economy Watchers Sentiment index are up for release in the next Asian session.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground thanks to the pickup in risk appetite and the rally in commodity prices. For today, the RBA statement is due and a balanced statement is eyed. Canada's Ivey PMI is also up for release and a climb from 53.1 to 54.2 is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 08, 2016)

USD

The US dollar barely showed any directional moves yesterday as traders didn't seem to be buying the upgrades in non-farm productivity and unit labor costs. The former was upgraded from a 1.0% decline to just a 0.6% drop while the latter was revised from 4.1% to 4.5% to reflect stronger upside wage pressure. Only the JOLTS job openings and crude oil inventories are due from the US today.

EUR

The euro was stuck in consolidation to the dollar but it gave up ground to the commodity currencies and pound. Euro zone GDP was upgraded from 0.5% to 0.6%, allowing the currency to advance against the yen. There are no major reports due from the region today.

GBP

The pound had a volatile run, as it spiked up against its counterparts during the late Asian session but retreated just as quickly. Halifax HPI showed a stronger than expected 0.6% gain but the rally was likely caused by some poll results showing a lead in favor of the "stay" vote. UK manufacturing production data is due today and a flat reading is eyed.

CHF

The franc carried on with its rally against the US dollar despite the increase in foreign currency reserves of the SNB. Swiss CPI is due today and a 0.2% uptick in price levels is eyed to follow the previous 0.3% gain.

JPY

The yen returned some of its recent wins earlier in the day as traders banked on risk appetite. Data from Japan came in mostly in line with expectations today, with the exception of the current account balance which saw a smaller surplus. The Economy Watchers Sentiment index is up for release next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the strongest in the pack yesterday, thanks to rising oil prices. The Loonie even shrugged off the Ivey PMI decline from 53.1 to 49.4 as WTI crude oil climbed above the $50/barrel level. Chinese trade balance numbers are due next, likely affecting Aussie and Kiwi price action ahead of the RBNZ rate statement.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 09, 2016)

USD

The US dollar lost further ground to its peers as risk appetite was present in the financial markets. Data from the US was stronger than expected, as the JOLTS job openings rose from 5.67M to 5.79M to indicate improved hiring momentum. Only the initial jobless claims report is lined up for today and a 269K reading is eyed.

EUR

The euro managed to regain its footing even though there were no major reports out of the euro zone, allowing the shared currency to benefit from funds moving out of the UK economy. French non-farm payrolls and German trade balance numbers are up for release next but traders could pay closer attention to ECB head Draghi's testimony.

GBP

The pound was once again sold off when a few polls indicated a lead in favor of those voting to exit the EU. Data from the UK was actually stronger than expected with manufacturing production up 2.3% versus the projected flat reading. There are no major reports due from the UK economy today.

CHF

The franc was able to extend its gains to the dollar and other European currencies but was mostly weaker against the comdolls. Swiss CPI came in below expectations with a 0.1% uptick in price levels versus the projected 0.2% increase. The Swiss jobless rate is due today and no change from the 3.5% reading is eyed.

JPY

The yen was mostly weaker due to risk-taking but managed to regain ground in the Asian trading session. Data from Japan was weaker than expected as core machinery orders slipped by 11.0% while the lower than expected Chinese CPI also brought risk aversion back.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi got a strong boost from the RBNZ decision when the central bank refrained from cutting interest rates while the Loonie got a boost from a reduction in US oil inventories. However, the Aussie was slightly weaker when the Chinese CPI landed at 2.0% versus the projected 2.3% reading. PPI came in better than expected at -2.8% versus the estimated -3.1% reading.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 10, 2016)

USD

The US dollar regained ground against its rivals as risk aversion appeared to return in the financial markets. Data from the US was mixed, with better than expected initial jobless claims and weaker than expected wholesale inventories. Only the US preliminary UoM consumer sentiment index is due today and a drop from 94.7 to 94.1 is expected.

EUR

The euro retreated against the dollar and the yen despite stronger than expected data from its top economies. French non-farm payrolls rose 0.3% while the German trade balance showed a larger surplus of 24.0 billion EUR. German final CPI and French industrial production data are up for release today.

GBP

The pound managed to limit its losses in recent sessions thanks to some surveys showing a slight lead in favor of those voting to stay in the EU. UK goods trade balance also showed stronger than expected results. Construction output data and inflation expectations are up for release today and another batch of strong readings could keep the pound afloat.

CHF

The franc returned some of its recent wins to the dollar even as the Swiss jobless rate came in line with expectations at 3.5%. There are no reports due from the Swiss economy today so the franc could be driven mostly by sentiment.

JPY

The yen took advantage of the risk-off moves to advance against its higher-yielding counterparts. Data from Japan was weaker than expected as core machinery orders slumped 11.0% versus the projected 3.2% drop. Japanese tertiary industry activity data is due today and a 0.7% rebound is eyed.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave back most of their recent wins when risk-off vibes returned. China reported a drop in its annual CPI from 2.3% to 2.0% but the PPI came in stronger than expected. In Canada, BOC Governor Poloz highlighted the pickup in the oil industry but cautioned that housing inflation could pose risks. Canada's jobs report is due next and a 3.1K increase is eyed, enough to keep the jobless rate unchanged at 7.1%.

By Kate Curtis from Trader's Way

 

[TradersWay]

Forex Major Currencies Outlook (June 13, 2016)

USD

The US dollar regained ground on Friday, thanks to US data coming in line with expectations. The UoM consumer sentiment index fell from 94.7 to 94.3, slightly higher than the estimated 94.1 figure, while the UoM inflation expectations reading was unchanged at 2.4%. There are no major reports due from the US economy today, leaving traders to price in expectations for the retail sales figures lined up tomorrow and the FOMC statement midweek.

EUR

The euro had a mixed performance as it weakened to the dollar and yen but advanced to the pound. Data from the euro zone, namely French industrial production and German WPI, came in mostly stronger than expected on Friday but traders are hesitating to buy the shared currency ahead of the EU referendum later this month. There are no reports due from the euro zone today.

GBP

The pound was still one of the weakest performing currencies as traders continued to act on jitters ahead of the Brexit vote. Polls are still showing shifting leads in favor of either the "stay" or "leave" camps so it's too close to call. UK construction output and inflation expectations both printed upbeat results on Friday and the CB leading index is due today.

CHF

The franc was weaker against the dollar but it continued to rake in gains against its European rivals. There were no reports out of Switzerland on Friday and none are due today, keeping the franc sensitive to market sentiment.

JPY

The yen was off to a strong start this week as risk aversion kicked into high gear. Japan's tertiary industry activity showed a 1.4% gain on Friday, twice as much as the 0.7% forecast. Over the weekend, Japan's BSI manufacturing index printed a weaker than expected -11.1 reading and the revised industrial production report is due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground on Friday, as traders likely booked profits ahead of the weekend. Jobs data from Canada was stronger than expected as hiring rose 13.8K versus the projected 3.1K increase. Over the weekend, Chinese data printed downbeat results with industrial production down from 6.1% to 6.0% and fixed asset investment slumping from 10.5% to 9.6%. Retail sales came close to consensus at 10.0%, down from the earlier 10.1% reading.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 14, 2016)

USD

The US dollar was mostly weaker against its peers in recent trading sessions as market watchers probably booked profits ahead of this week's FOMC statement. There were no reports released from the US economy yesterday while today has the retail sales reports due. Analysts are expecting to see 0.4% gains for both headline and core figures, although the downbeat jobs figures for the same month probably weighed on spending.

EUR

The euro rebounded against some of its counterparts even though there were no reports released from the region. For today, the euro zone employment change and industrial production numbers are due. Employment likely rose 0.2% in the first quarter while industrial production is projected to have rebounded by 0.7%.

GBP

The pound suffered another round of weakness when the latest Brexit surveys showed a lead in favor of those voting to exit the EU. The UK CB leading index stayed flat while today has the CPI readings on tap. Headline CPI could rise to 0.4% while core CPI might climb to 1.3% but traders are likely to pay closer attention to Brexit-related updates.

CHF

The franc was able to take advantage of dollar weakness and the risk-off flows in the European region. There were no reports out of Switzerland yesterday while today has the PPI on tap. Producer prices might post a 0.1% uptick, slower than the previous 0.3% gain.

JPY

The yen took advantage of the run in risk aversion yesterday, as traders seemed to have a stronger preference for the Japanese currency against the dollar. Japan's industrial production figure was upgraded from 0.3% to 0.5%, higher than the forecast at 0.4%.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent wins as risk aversion returned to the financial markets. Data from China was mostly weaker than expected, as fixed asset investment and retail sales fell. In Australia, the NAB business confidence index fell from 5 to 3 to show weaker optimism. No other reports are lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 15, 2016)

USD

Dollar pairs were mostly stuck in consolidation yesterday as traders hesitated to take huge positions ahead of the FOMC statement. Headline retail sales rose 0.5% versus the 0.4% consensus while core retail sales came in line with expectations of a 0.4% gain. Import prices posted a stronger than expected 1.4% increase while business inventories were lower. No actual rate changes are expected from the Fed today but a reiteration of their hawkish bias could revive dollar strength.

EUR

The euro was stuck in consolidation to the dollar but was weaker against its other counterparts. Data from the euro zone was actually stronger than expected, with quarterly employment up 0.3% versus the 0.2% consensus and industrial production up by 1.1%. Only the euro zone trade balance is lined up today.

GBP

The pound continued to reel from Brexit updates, as another poll showed a lead in favor of those voting to exit. UK CPI was also weaker than expected, as both headline and core figures didn't budge. The UK jobs report is due today and a 0.1K drop in claimants is eyed while the average earnings index could slide from 2.0% to 1.7%.

CHF

The franc was able to benefit from the risk-off moves in the forex market and the stronger than expected Swiss PPI. Producer prices rose 0.4% versus the projected 0.1% uptick. There are no reports due from the Swiss economy today.

JPY

The yen continued to rake in gains on risk aversion and also got a boost from a positive revision in Japan's industrial production figure. The reading was upgraded from 0.3% to 0.5%, higher than the estimated 0.4% reading. There are no reports due from Japan today, keeping risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as they lost ground to the yen but advanced against the euro and pound. Data from Australia has indicated weakness, as the NAB business confidence index fell from 5 to 3 while the Westpac consumer sentiment reading showed a 1.0% decline. New Zealand's current account balance showed a wider than expected surplus of 1.31 billion NZD. Canadian manufacturing sales and the New Zealand GDT auction are lined up next, along with the New Zealand GDP for Q1.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 16, 2016)

USD

The US dollar gave up ground to its forex peers when the Fed refrained from hiking interest rates in their latest policy decision. FOMC members also lowered growth forecasts for this year and the next, acknowledging the recent slowdown in employment, but upgraded their inflation forecasts to account for higher commodity prices this year. The Empire State index and PPI beat expectations while industrial production and capacity utilization fell short. US CPI, Philly Fed index, current account balance, and initial jobless claims are up for release today.

EUR

The euro was able to take advantage of dollar weakness but was no match to yen strength. Medium-tier data from the euro zone came in line with expectations but the shared currency was driven by Brexit jitters weighing on European markets as a whole. Euro zone final CPI readings are up for release today.

GBP

The pound continued to chalk up losses against its peers as traders priced in the possibility of a Brexit. Jobs data from the UK was actually stronger than expected, as claimants fell 0.4K versus the projected 0.1K drop while the average earnings index held steady at 2.0% instead of falling to the estimated 1.7% figure. The BOE decision is lined up today along with the UK retail sales release.

CHF

The franc continued to take advantage of weakness in the European currencies and was also able to advance against the US dollar. Additional volatility is expected for franc pairs today as the SNB is set to make its policy decision. No actual changes are expected but the Swiss central bank might have some comments on the upcoming EU referendum.

JPY

The yen rallied after the BOJ decided to keep policy unchanged once more. The lower-yielding Japanese currency has also been the beneficiary of safe-haven flows leading up to the EU referendum but additional volatility could be seen during the BOJ press conference later today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar weakness but still caved to yen strength. In Australia, hiring was up by 17.9K versus the estimated 14.9K gain while the unemployment rate stood at 5.7% as expected. Dairy prices stayed flat in the latest NZ GDT auction but the country's GDP beat expectations with a 0.7% expansion versus the estimated 0.5% growth figure for Q1.

By Kate Curtis from Trader's Way