Daily Market Outlook by Kate Curtis from Trader's Way

[katetrades]

Forex Major Currencies Outlook (Jun 19, 2017)

USD

The dollar had a mixed round as it reacted mostly to currency-specific events. US data was all weaker than expected last week, casting some doubt on the Fed's ability to hike rates again. Building permits and housing starts both fell short of estimates while the preliminary UoM consumer sentiment index reflected a sharper than expected drop in optimism. There are no reports due from the US economy today but FOMC member Dudley has a speech scheduled.

EUR

The euro made a bit of a bounce against some of its peers as profit-taking came into play at the end of the week. There were no changes to the final CPI readings, although it's worth noting that these were weaker than the earlier figures. There are no major reports due from the euro zone economy today.

GBP

The pound managed to hold on to most of its gains after last week's hawkish BOE statement. However, the currency retreated against some of its counterparts on profit-taking ahead of this week's Brexit talks. There were no reports out of the UK on Friday and none are due today, so Brexit-related headlines could push pound pairs around.

CHF

The franc was still in a weak spot as risk appetite popped back in the markets while traders are shying away from European currencies on event risks. There were no reports out of the Swiss economy on Friday and none are due today, so market sentiment could dictate franc price action.

JPY

The yen gave up ground against its peers at the end of the week as risk aversion faded and the BOJ maintained its easy monetary policy. Earlier today, Japan reported a weaker than expected trade balance of 0.13T JPY instead of widening from 0.16T JPY to 0.35T JPY.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained a lot of ground as risk-taking happened on Friday. Canadian foreign securities purchases turned out weaker than expected but the Loonie remained mostly supported. Australia's CB leading index is due next but the main event risks for the comdolls this week are the RBNZ decision and oil-related headlines.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 20, 2017)

USD

The US dollar got a strong boost from hawkish remarks by FOMC member William Dudley in his testimony. He affirmed US economic growth and how it has been well-distributed, citing that wage growth could pick up once productivity does. He also emphasized the need to keep up the Fed's tightening timeline. FOMC member Evans still has a speech coming up, along with Fischer and Kaplan.

EUR

The euro was in a weak spot as Brexit-related uncertainties dampened demand for the shared currency. There were no major catalysts from the region on Monday while today has German PPI and the euro zone current account balance. A 0.1% drop in producer prices is eyed, so a steeper fall could push the shared currency much lower.

GBP

The pound was also on shaky footing as traders have been on edge during the start of the Brexit talks. While officials confirmed that it was a positive start and that the timeline and agenda have been agreed upon, traders can't help but limit their pound holdings in anticipation of more heated discussions later on. The UK Rightmove HPI indicated a 0.4% drop in price levels. BOE Governor Carney is set to give his postponed testimony later today.

CHF

The franc was also in a weak spot against most of its peers as sentiment in the region turned sour. There were no reports out of the Swiss economy then while today has a speech by SNB Chairman Jordan. Jawboning could continue to weigh on the Swiss currency, although traders don't seem to be so bothered anymore.

JPY

The yen gave up ground to the commodity currencies as risk appetite came into play. Japan's trade balance turned out weaker than expected at 0.13T JPY versus the projected rise from 0.16T JPY to 0.35T JPY. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to advance against their peers even with the drop in commodity prices. RBA monetary policy meeting minutes are up for release, along with the quarterly HPI. Moody's downgraded big Australian banks for their exposure to the housing market. Canadian wholesale sales data and New Zealand's GDT auction are lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 21, 2017)

USD

The US dollar managed to hold on to its gains thanks to the return in risk aversion. A few other policymakers gave testimonies but none sounded as hawkish as Dudley. The US current account balance widened to $117 billion but this was smaller than the projected $124 billion shortfall. US existing home sales data is due next.

EUR

The euro managed to hold its ground since it appears to be trading as the safe-haven in the region. The euro zone current account surplus was lower than expected at 22.2 billion EUR versus the 31.3 billion EUR consensus. There are no major reports due from the region today.

GBP

The pound was the weakest of the bunch as traders continued to price in Brexit uncertainties. PM May has yet to strike a coalition with the DUP and traders are looking to the Queen's Speech for reassurance. BOE Governor Carney was not as hawkish as his other policymakers who voted for a hike in last week's decision. UK public sector borrowing data is due next, along with a speech by MPC member Haldane.

CHF

The franc had a mixed run as it gained ground to the European currencies but tumbled against the commodity currencies. SNB head Jordan continued to jawbone the currency, threatening to intervene in the forex market if the franc keeps appreciating. The SNB Quarterly Bulletin is up for release next.

JPY

The yen regained some ground as risk-off flows were seen for the most part of the day. There were no reports out of Japan and today has the BOJ minutes lined up. Still, overall market sentiment could be the main driver of yen movements.

Commodity Currencies (AUD, NZD, CAD)

The Loonie paused from its climb when crude oil tumbled to its nine-month low on rising output from Libya. The country, which is exempted from the OPEC deal, struck a deal with Germany's Wintershall to increase production and is likely to stay on track to meet its 1M bpd target for next month. In New Zealand, the GDT auction yielded a 0.8% drop in dairy prices and the RBNZ decision is due next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 22, 2017)

USD

The US dollar held its ground against its peers even as talks of balance sheet unwinding in September dampened rate hike hopes for the same month. According to Harker and Evans, this move is separate from their economic assessment but they could rethink if data keeps coming in weak. US existing home sales turned out stronger than expected and the HPI is due next, along with the CB leading index.

EUR

The euro was off to a rough start but managed to recover against its peers as sentiment improved in the region. There were no reports out of the euro zone in the recent session and none are due today so risk appetite could determine where the shared currency could head next.

GBP

The pound drew a bit of support from relatively upbeat remarks from BOE member Haldane. This tempered cautious remarks from BOE head Carney in the previous session while the Queen's Speech also injected a bit more confidence in the government and economy. UK public sector borrowing data also turned out better than expected. The CBI industrial order expectations index is due next and a fall from 9 to 7 is eyed.

CHF

The franc managed to rake in some gains, mostly against the commodity currencies. There were no major reports out of the Swiss economy so currency-specific factors stayed in play. The trade balance is due next and a wider surplus of 2.44B CHF compared to the earlier 1.97B CHF is expected.

JPY

The yen also gained ground against the higher-yielding comdolls as risk aversion came into play. Japan's all industries activity index posted a 2.1% gain, higher than the projected 1.7% rebound. There are no major reports due from Japan next so market sentiment could stay in play.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest performers for the day as the drop in crude oil finally took its toll on the Loonie. Even though US stockpiles posted a larger than expected draw of 2.5 million barrels, the commodity barely came off its lows on concerns of rising output from Libya. The RBNZ decision and Canadian retail sales reports are lined up next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 23, 2017)

USD

The dollar was able to rake in some gains against most of its counterparts, except against the Kiwi and Loonie. The US CB leading index came up short at 0.3% versus the 0.4% consensus while the earlier reading was downgraded to 0.2%. Flash manufacturing and services PMIs are lined up today, along with new home sales data.

EUR

The euro edged slowly lower against most of its rivals as there have been no major reports to give the shared currency a boost recent. PMI reports from the manufacturing and services sectors of Germany and France are lined up, and analysts are expecting to see small dips in activity.

GBP

The pound was still one of the weaker performing currencies as Brexit uncertainties weighed on the UK currency. UK CBI industrial orders actually turned out better than expected as the index jumped from 9 to 16 instead of falling to 7. There are no reports due from the UK economy today.

CHF

The franc was mostly weaker against its peers as risk-taking forced the currency to slide, on top of fears of SNB intervention. Swiss trade balance was stronger than expected at 3.40 billion CHF versus the estimated 2.44 billion CHF or the earlier 1.96 billion CHF surplus. There are no reports due from the Swiss economy next.

JPY

The yen was also on the losing end as risk-taking came into play. There were no reports out of the Japanese economy yesterday while today has the flash manufacturing PMI on tap. Analysts are expecting to see a rise from 53.1 to 53.4 to reflect a faster pace of expansion.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi enjoyed a strong boost after the RBNZ was less cautious than expected in their policy statement. The central bank kept rates unchanged and didn't jawbone too much, even giving a more upbeat outlook for the economy. Meanwhile, crude oil chalked up another slide but the Loonie gained support from strong retail sales. The headline figure chalked up a 1.5% gain versus the projected 0.6% uptick while the core reading was up 0.8% versus 0.3%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 26, 2017)

USD

The US dollar was off to a weak start as economic reports turned out below expectations. Headline durable goods orders fell 1.1% versus the projected 0.5% dip while the core reading showed a 0.1% uptick instead of the estimated 0.4% gain. Fed Chairperson Yellen has a speech coming up next.

EUR

Economic data from the euro zone turned out stronger than expected as the German Ifo business climate index climbed from 114.6 to 115.1 versus the estimated 114.7 reading. There are no major reports due from the region next but Draghi has a speech coming up.

GBP

The pound gained some support from reports confirming that PM May has been able to strike a coalition with the DUP. This could leave the government with a more united front in the Brexit negotiations. UK BBA mortgage approvals dipped from 40.7K to 40.3K as expected. The BOE financial stability report and a speech by Carney are lined up next.

CHF

The franc had a mixed performance as the lack of top-tier data from Switzerland left it functioning as a counter currency. There are still no major reports lined up from the Swiss economy so market sentiment could push the franc around.

JPY

The yen was mostly weaker against its peers as risk appetite was in play last week. There have been no major reports out of Japan so far this week and none are lined up today so market sentiment could be responsible for yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls managed to rake in more gains as risk-taking was evident at the end of the week, even with downside pressure on crude oil prices. New Zealand's trade balance is coming up next and a narrower surplus of 420M NZD compared to the earlier 578M NZD reading is expected.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 27, 2017)

USD

The US dollar had a mixed run at the start of the week as weaker than expected durable goods orders kept gains limited. Headline durable goods orders fell 1.1% versus the projected 0.5% drop while the core reading had a 0.1% uptick versus the estimated 0.4% gain. US CB consumer confidence is due next and a dip from 117.9 to 116.1 is eyed, but the bigger mover could be Fed head Yellen's testimony.

EUR

The euro also had a mixed run as it advanced to the yen but gave up ground to commodity currencies. German Ifo business climate improved from 114.6 to 115.1, outpacing the consensus at 114.7. There are no major reports due from the euro zone today but ECB head Draghi has a speech lined up.

GBP

The pound gained some support from news that PM May has finally been able to strike a coalition with the DUP. BOE Governor Carney has a testimony today and his previous one was more dovish than expected. The BOE Financial Stability Report is also up for release.

CHF

The franc was mostly weaker as risk appetite came into play and there were no reports out of Switzerland to give it a boost. The Swiss economic schedule is still empty for the upcoming trading sessions so market sentiment could keep pushing the franc unless currency-specific events carry more weight.

JPY

The yen has been off to a weak start this week as risk-taking has been in play. There have been no major reports out yet so it's tough to pinpoint the actual catalyst for the move, besides stops getting hit on technical breaks. There are no reports due from Japan in the upcoming sessions so market sentiment could determine whether the yen pairs can keep climbing or not.

Commodity Currencies (AUD, NZD, CAD)

Comdolls raked in gains earlier on as risk appetite was present at the start of this week. New Zealand's trade balance is due next and a narrower surplus of 420 million NZD versus the earlier 578 million NZD is expected. There are no major reports due from the comdoll economies in the next trading session so commodity prices could determine where they might be headed next.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 28, 2017)

USD

The dollar barely reacted to Fed head Yellen's testimony since she merely repeated their statements during the FOMC decision and reiterated that inflation is running below the committee's long-run objective. FOMC members Harker and Kashkari didn't cause any big moves for the dollar as well. US pending home sales are due next and a 0.9% rebound is eyed.

EUR

The euro enjoyed a strong boost when ECB head Draghi hinted that they could withdraw stimulus at some point, reviving speculations of tapering. There were no major reports out of the region and only medium-tier figures, namely German import prices and Italian preliminary CPI, are lined up next.

GBP

The pound was still under some selling pressure as its other European currency rivals took most of the gains. BOE Governor Carney had a speech that sounded mostly cautious, but the CBI realized sales index posted a strong climb from 2 to 12, outpacing the consensus at 4. BOE Governor Carney has another speech coming up.

CHF

The franc followed the euro's tracks in rallying against its peers. There were no reports out of the Swiss economy then but the improved sentiment in the region shored up the currency. The Credit Suisse economic expectations index is due next ad an improvement over the earlier 30.8 figure could mean more franc gains. UBS will also print its consumption indicator.

JPY

The yen gave up more ground to its peers as risk sentiment continued to improve and traders still favored the dollar over the Japanese currency. There were no reports out of the Japanese economy recently but Kuroda did hint that they are reluctant to withdraw stimulus. He has another speech coming up.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to rake in gains against lower-yielders but gave up ground to European currencies. BOC Governor Poloz has a speech lined up and he previously gave an upbeat assessment and outlook for Canada, which could shore up the Loonie again even with weaker oil prices. New Zealand's trade balance turned out weaker than expected at 103 million NZD versus 420 million NZD while the earlier reading was downgraded.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 29, 2017)

USD

The dollar gave up more ground to its counterparts as pending home sales turned out weaker than expected. The report printed a 0.8% decline versus the estimated 0.9% increase while the earlier figure was downgraded to show a 1.7% slide. Initial jobless claims and the final GDP reading are due next, although these aren't expected to have a huge impact on the dollar unless there are big surprises.

EUR

The euro enjoyed a strong boost after Draghi gave hawkish hints but the gains were erased when policymaker Constancio clarified that inflationary pressures are still weak and that stimulus is needed to prop up price levels. Many also cautioned that markets may have misinterpreted Draghi's remarks. German and Spanish preliminary CPI readings are still lined up and strong readings could revive the shared currency.

GBP

The pound staged a rally late in the day as BOE head Carney sounded hawkish himself. This is in contrast to his earlier dovish tone as he signaled that further gains in inflation could make a rate hike necessary. UK mortgage approvals and net lending to individuals figures are up for release next, but traders could also pay close attention to the vote on the Queen's Speech.

CHF

The franc continued to advance against most of its peers as sentiment improved in Europe. Swiss data turned out mixed, with the UBS consumption indicator up from 1.34 to 1.39 and the Credit Suisse Economic Expectations Index down from 30.8 to 20.7. There are no reports due from the Swiss economy today so market sentiment could push franc pairs around.

JPY

The yen was still losing ground to its counterparts as BOJ head Kuroda expressed hesitation to tighten or reduce bond purchases. Japan's retail sales report is due next and a lower read of 2.6% is eyed, compared to the earlier 3.2% gain. Traders could also price in expectations ahead of the inflation reports due at the end of this week.

Commodity Currencies (AUD, NZD, CAD)

The Loonie led the pack as it shrugged of the surprise buildup in EIA crude oil stockpiles. The increase of 0.1 million barrels was still lower than the 0.8 million barrels reported by the API so bulls came into play. BOC Governor Poloz also reiterated their relatively upbeat stance, signaling that they're done cutting rates. Australia's HIA new home sales is due next and New Zealand will report its ANZ business confidence index.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (Jun 30, 2017)

USD

The US dollar was mostly weaker against its peers even though the final GDP reading enjoyed an upgrade from 1.2% to 1.4% instead of staying unchanged as expected. Personal spending and income, along with the core PCE price index, are up for release today and stronger than expected results could still shore up the currency.

EUR

The euro managed to hold on to some of its gains when medium-tier reports turned out better than expected. German preliminary CPI is up 0.2% instead of staying flat while the GfK consumer climate index improved from 10.4 to 10.6 instead of staying unchanged. German retail sales and French consumer spending reports are lined up today.

GBP

The pound continued its ascent as BOE member Haldane reiterated his hawkish views and Governor Carney previously admitted that some removal of stimulus might be needed if inflationary pressures keep rising. UK net lending to individuals was better than expected as well. UK current account balance and final GDP readings are up for release next.

CHF

The franc held on to its gains as sentiment improved in Europe. There were no major reports out of the Swiss economy then and the KOF economic barometer is due today. A rise from 101.6 to 102.5 is expected, and this could spur more gains for the Swiss currency.

JPY

Yen weakness was still in play as bond sold off worldwide, mostly due to the pickup in risk appetite. BOJ head Kuroda also expressed reluctance to reduce stimulus, keeping the Japanese central bank behind its peers on the tightening curve. Japanese household spending and core inflation reports are up for release next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls raked in more gains as risk appetite extended its stay. Australia's HIA new home sales posted a 1.1% increase, outpacing the earlier 0.8% uptick, while New Zealand reported a higher ANZ business confidence index of 24.8 from the earlier 14.9 figure. Chinese official manufacturing and non-manufacturing PMIs are lined up next, with strong figures likely to keep risk-taking in play.

By Kate Curtis from Trader's Way