Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (July 24, 2013)

USD

Dollar weakness was still evident in yesterday’s trading, as EUR/USD broke higher while the commodity currencies extended their wins against the Greenback. Only the Richmond manufacturing index was released from the US and it showed a disappointing -11 reading instead of improving from 8 to 7. This revealed that there are still some inherent weaknesses in the US economy, which reminded traders that the Fed taper isn’t set in stone just yet. For today, new home sales and crude oil inventories are up for release. Remember that existing home sales came in weak earlier this week, which increases the chance for a downside surprise in new home sales.

EUR

The euro ended the day higher against the dollar again, despite the lack of data from the euro zone. Euro zone PMIs from Germany and France are up for release today and markets are expecting tiny improvements in the manufacturing and services sectors of both economies. Although most of the figures are projected to stay below 50.0 and indicate contraction, strong data could help lift the euro against its counterparts.

GBP

The pound managed to pocket some gains against the dollar yesterday, even though the BBA mortgage approvals report came in weak. The figure logged in a 37.3K increase, higher than the previous 36.3K reading but lower than the estimate at 38.5K. Still, an increase is an increase, and this was received positively by pound traders as it indicates that the government’s Funding for Lending Scheme is bearing fruit. CBI industrial orders expectations are due today and the figure is estimated to improve from -18 to -12, indicating that the decline was slower during the period.

CHF

No reports were released from Switzerland yet the franc continued its winning ways. Switzerland’s schedule is still empty for today, which suggests that USD/CHF and EUR/CHF could take their cues from US data and euro zone reports respectively.

JPY

The yen had a mixed performance as it remained sensitive to currency-specific data of its counterparts. The good news from Japan though is that the BOJ upgraded their growth forecasts for the third month in the row, revealing that the central bank believes their stimulus efforts are working out. The trade balance came in slightly below consensus as it printed a -0.6T JPY reading instead of the estimate at -0.58T JPY, but was still better than the previous -0.78T JPY figure.

Commodity Currencies (AUD, NZD, CAD)

Not even the drop in commodity prices was able to keep the comdolls from ending with wins, as AUD/USD reached the .9300 area while USD/CAD dipped to 1.0300. New Zealand’s trade balance came in much better than expected at 414M instead of the estimate at 5M, allowing NZD/USD to come close to .8000. Canadian retail sales also posted a strong upside surprise while Australian quarterly CPI came in as expected. Chinese flash manufacturing PMI from HSBC was weaker than estimated though, as it slipped from 48.2 to 47.7 instead of improving to 48.6.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 25, 2013)

USD

The US dollar regained its strength in yesterday’s trading as a combination of risk aversion and strong US new home sales boosted the safe-haven currency. The actual new home sales figure showed a 497K reading, higher than the estimated 482K figure. However, the previous month’s report was revised down to show a 459K figure. US durable goods orders data are scheduled for release today and the headline figure is slated to print a 1.1% increase while the core version of the report could show a 0.5% uptick. Stronger than expected data could lift the dollar against its counterparts once more.

EUR

Euro zone PMI figures all came in stronger than expected for July, with Germany’s reports showing an expansion in its manufacturing and services industries. This was enough to push the region’s manufacturing PMI above the 50.0 mark as well, showing that the industry grew for the month. Spanish jobs data and German Ifo business climate index are up for release today. Germany’s business climate reading is expected to improve from 105.9 to 106.3 while Spain’s jobless rate could hold steady at 27.2%.

GBP

The pound was unable to hold on to its recent gains against the dollar as GBP/USD failed to break past the 1.5400 handle. UK CBI industrial orders expectations came in line with consensus, as it improved from -18 to -12. The UK preliminary GDP figure is up for release today and a 0.6% growth figure is expected. Stronger than expected data could push GBP/USD past 1.5400 while weak data could trigger a sharper selloff.

CHF

There were no reports released from Switzerland yesterday, leaving the franc victim to dollar strength. Switzerland’s schedule is empty again today, which suggests that USD/CHF could move according to US data once more.

JPY

Japanese CSPI came in weaker than expected at 0.4% instead of the estimated 0.7% increase. Inflation data is coming up in the next Asian session and these could be crucial in determining if the BOJ’s stimulus plans are still working or if additional easing is needed.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi gave way to dollar strength yesterday, as both commodity currencies were weighed down by weak Chinese PMI. HSBC reported a deeper contraction of 47.7 for July as the index was expected to improve from 48.2 to 48.6. Australian quarterly CPI came in line with consensus at 0.4%, which suggests that the RBA doesn’t need to implement additional stimulus anytime soon. As for the Loonie, CAD bulls continued to push the currency higher against most of its other counterparts thanks to strong Canadian retail sales for May.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 26, 2013)

USD

The US dollar continued to cave under the higher-yielding currencies in yesterday’s trading, as mixed durable goods orders data led traders to believe that the U.S. recovery is unsustainable. The headline figure showed a 4.2% jump, mostly driven by automobile sales, while the core figure remained flat. No reports are due from the U.S. today, which opens up the possibility of profit-taking ahead of the weekend.

EUR

The euro continued to edge higher against the dollar, as EUR/USD tapped the 1.3300 area during the U.S. session. German Ifo business climate came in line with consensus at 106.2, which is a good improvement from the previous month’s figure. For today, there are no major reports from the euro zone. Only the German consumer prices report is up for release at 7:00 am GMT.

GBP

The pound had a choppy trading day, especially after the release of the UK preliminary GDP figure. The actual report showed a 0.6% uptick as expected, but this appeared to disappoint pound traders as the currency suffered a quick selloff against most of its counterparts upon the release. No reports are due from the U.K. today.

CHF

There were no reports released from Switzerland yesterday and none are due today, which suggests that the franc could continue to take advantage of the ongoing dollar weakness.

JPY

The yen enjoyed some gains against the dollar, as Japan printed another round of increases in consumer price levels. Tokyo showed a 0.3% uptick as expected while the national core CPI printed a 0.4% increase, higher than the estimated 0.3% rise. This reflects how the BOJ’s massive stimulus efforts are working and that no additional stimulus is needed for now.

Commodity Currencies (AUD, NZD, CAD)

NZD/USD enjoyed a strong rally in yesterday’s trading when the RBNZ adopted forward guidance in announcing that the low rates would last until 2014 only. This prompted speculations of a rate hike, which pushed NZD/USD to the .8100 mark. Meanwhile, the Australian dollar was able to recover most of its recent losses to the dollar as it edged back above the .9200 handle.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 29, 2013)

USD

Dollar pairs were stuck in consolidation last Friday, as there were no major reports released from the United States. The University of Michigan consumer sentiment figure was revised a bit higher, but it did very little to support the US dollar. For today, the pending home sales figure is up for release and a 1.1% decline is expected. A larger than expected drop could be very negative for the dollar, although traders might be hesitant to take large dollar positions ahead of the FOMC statement and GDP release on Wednesday.

EUR

The euro consolidated against the dollar on Friday, as there were no reports released from euro zone then. The euro zone schedule is still empty again for today, which suggests more quiet trading for EUR/USD. The main event for the euro this week is the ECB rate statement scheduled during the latter half. Until then, euro traders might refrain from pushing the shared currency in a particular direction.

GBP

After the volatile behavior midweek, GBP/USD stayed inside its ranges on Friday as there were no major reports from the U.K. then. Only medium-tier reports, such as mortgage approvals, net lending to individuals, and CBI realized sales are due from the UK today. Strong data could provide support for the pound while weak reports could undermine its strength.

CHF

The franc consolidated against the dollar on Friday but USD/CHF selling pressure still appears strong. The pair is on track to test the support around the .9200 major psychological level at the moment. There are no reports up for release from Switzerland again today, which suggests that USD/CHF could stay in consolidation.

JPY

The yen continues to enjoy support from improved Japanese data. The Tokyo core CPI showed a 0.3% uptick as expected while the national core CPI printed a higher than expected 0.4% increase in price levels. Earlier today, Japan released its retail sales figure and showed a 1.6% increase, close to the consensus of 1.7%. More reports from Japan, such as the household spending and industrial production figures, are due in the upcoming Asian session.

Commodity Currencies (AUD, NZD, CAD)

Comdolls stayed in consolidation on Friday, as though waiting for more clues before resuming their recent action. Only the building consents data is due from New Zealand later today and it is expected to show another positive figure.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 30, 2013)

USD

The US dollar regained ground against most of its major counterparts at the start of the week, as pending home sales printed a smaller than expected decline of 0.4%. Analysts expected a drop of 1.1%. The only major report due from the US today is the CB consumer confidence figure, which is slated to dip from 81.4 to 81.1. The US is also set to print its S&P/CS house price index and possibly show a 12.4% reading.

EUR

EUR/USD’s climb came to a halt as the pair consolidated below the 1.3300 major psychological level. There were no reports released from the euro zone yesterday, which explains the lack of direction for the pair. For today, there are a few medium-tier reports on tap and these are the German CPI, Spanish GDP, and euro zone retail PMI. Be mindful of stronger than expected data that could push EUR/USD higher or weaker than expected results that might trigger a pullback.

GBP

The pound erased some of its previous gains to the dollar in yesterday’s trading, as GBP/USD retreated to the 1.5300 area. CBI realized sales came in better than expected as it improved from 1 to 17, outpacing the consensus at 11, while mortgage approvals missed expectations. The report printed a 58K reading instead of the estimated 60K figure. For today, only the GfK consumer confidence and BRC shop price index are up for release and these aren’t likely to cause a huge impact on pound movement.

CHF

USD/CHF held steady below the .9300 handle in yesterday’s trading since the lack of top-tier catalysts from both the US and Switerland resulted in a range-bound environment. No reports are due from Switzerland again today, which suggests that this pair could be in for more consolidation.

JPY

Japanese data came in mixed, with an improvement in the jobs sector and a downturn in spending. Household spending slipped by 0.4% instead of bouncing back by 1.2% while the jobless rate dipped from 4.1% to 3.9%, better than the estimate of a 4.0% reading. Meanwhile, industrial production also missed the consensus and showed a 3.3% decline while the previous month’s figure was revised down to show a 1.9% drop. Manufacturing PMI and average cash earnings are due from Japan today and this could dictate the yen’s movement for the rest of the day.

Commodity Currencies (AUD, CAD, NZD)

The comdolls gave up some of their recent gains, as AUD/USD fell from the .9300 area while NZD/USD slipped to .8000. USD/CAD, however, was mostly stuck in consolidation. Australian building approvals were weak, as the figure showed a massive 6.9% decline. Similarly, New Zealand printed a weaker than expected building consents report. Inflation reports, such as RMPI and IPPI, are up for release from Canada today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 31, 2013)

USD

The dollar bounced back to life in yesterday’s trading as it gained against most of its major counterparts. Data from the US hasn’t been exactly very strong, as the CB consumer confidence figure actually came in weaker than expected. Instead of dipping from 81.4 to just 81.1, the index fell to 80.3. The advanced GDP is up for release today and 1.1% growth is eyed for the second quarter of the year, lower than the previous quarter’s 1.8% reading. The FOMC statement is also scheduled during the later part of the US session, and the Fed might be able to set the record straight regarding their asset purchases.

EUR

Although euro zone figures came in mostly better than expected yesterday, the euro was no match to dollar strength as traders liquidated most of their positions ahead of the top-tier US data today. German GfK consumer climate improved from 6.8 to 7.0 while Spanish GDP came in line with consensus at -0.1%. German retail sales and jobs data are due today and this might have an impact on EUR/USD, but traders might stand pat ahead of the US events.

GBP

The pound lost ground to the dollar in yesterday’s trading, even if the GfK consumer confidence figure for the UK was stronger than estimated. The reading improved from -21 to -16, outpacing the consensus at -19. There are no major reports on tap from the UK today, leaving traders to take their cues from the major events in the US.

CHF

The lack of major reports from Switzerland left the franc powerless against the dollar in yesterday’s trading. Today, Switzerland will release its UBS consumption indicator and KOF economic barometer. Both of these reports could support the franc during the London session if they come in stronger than expected or show significant improvements.

JPY

The yen edged higher against its counterparts and managed to hold on to its current levels to the dollar. Data from Japan was mixed, as the jobs report was strong but spending and production disappointed, leaving the yen mostly directionless. The average cash earnings and housing starts data are due from Japan today, although both reports aren’t likely to cause huge waves for yen pairs.

Commodity Currencies (AUD, CAD, NZD)

The comdoll gang was weighed down by the dollar in yesterday’s trading, as some traders took profits ahead of today’s key events. Weak building approvals in Australia and New Zealand dragged AUD/USD and NZD/USD lower, but the Loonie managed to stay more resilient as inflation reports from Canada came in strong. New Zealand reported an improvement in ANZ business confidence while Australia released an upbeat private sector credit data, which is providing support for their currencies at the moment.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 1, 2013)

USD

The dollar had a topsy-turvy day, as the GDP report from the US came in stronger at 1.7% instead of the estimate at 1.1%. The FOMC statement, however, derailed the dollar from its rallies as it showed that policymakers were uneasy about weak inflation and rising mortgage costs. For now, they are still keeping close tabs on inflation and employment before deciding if they will indeed taper next month. ISM manufacturing PMI and jobless claims are up for release today, and traders could pay closer attention to the employment component of the ISM PMI.

EUR

The euro had a volatile day against the dollar, although euro zone data came mostly in line with expectations German CPI showed a 0.5% uptick while Spanish GDP printed a 0.1% contraction. The ECB statement is scheduled for today and more volatility is expected for EUR/USD. Although Draghi pretty much detailed their monetary plans for the foreseeable future, he could still rock the euro if he says something new or highlights the recent developments in the euro zone.

GBP

The pound is also in for a volatile day as the BOE interest rate decision is scheduled later today. BOC Governor Carney outlined his plans for the central bank and monetary policy already but he could have a few things to say on how the economy is doing, and this would be crucial in dictating pound movement.

CHF

USD/CHF price action has been very choppy lately, as the US events failed to give a clear direction for the Greenback. Data from Switzerland has been relatively okay, as the KOF economic barometer improved from 1.15 to 1.23 while the UBS consumption indicator was at 1.44, down from 1.45. Swiss banks are on a holiday today, which suggests quiet trading for franc pairs.

JPY

The yen consolidated against most of its counterparts as traders are still awaiting more clues from the market. There are no major reports released from Japan recently, which suggests yen pairs could stay stuck in consolidation for a while, unless country-specific events spark huge moves for some.

Commodity Currencies (AUD, NZD, CAD)

Comdolls were mostly stuck in consolidation, particularly for AUD/USD and USD/CAD. There were no major releases from their economies recently, although the Chinese official government PMI figures came in better than expected. The biggest movers for this pairs today could be the US ISM manufacturing PMI and jobless claims.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 2, 2013)

USD

The US dollar continued its rallying ways across the charts, pushing USD/JPY above the 99.00 mark and EUR/USD down to the 1.3200 area. Data from the US has been upbeat, with both initial jobless claims and ISM manufacturing PMI coming in better than expected. The ISM figure improved from 50.9 to 55.4, its fastest climb since June 1996. The initial jobless claims report showed a 326K reading, lower than the estimate at 346K. For today, the NFP is up for release and could cause a lot of volatility among dollar pairs. A 186K figure is expected, slightly lower than the previous 195K reading but still enough to push the jobless rate down from 7.6% to 7.5%.

EUR

The euro slid lower against the dollar but managed to score some gains against the Japanese yen. The ECB statement turned out as markets expected, with no actual changes to monetary policy but Draghi highlighted some of the improvements in the euro zone economy. Only the Spanish jobs report is up for release from the euro zone today and it is expected to show that the economy added 80K jobs for the month. A higher than expected increase in hiring could lift the euro during the London session.

GBP

The pound weakened to the dollar but strengthened against the yen, as the BOE interest rate decision contained no surprises. BOE Governor Carney kept rates unchanged, as expected. Meanwhile the UK manufacturing PMI printed a strong result of 54.6, higher than the estimate at 52.8. Construction PMI is due from the UK today and it’s expected to rise from 51.0 to 51.6.

CHF

There were no reports from Switzerland as the country was on a holiday. With that, the franc fell victim to dollar strength, pushing USD/CHF out of its downtrend on the shorter-term time frame. For today, the SVME PMI is up for release and it’s expected to improve from 51.9 to 53.1, which could lift the franc against its counterparts.

JPY

The yen was no match to the strength of other major currencies as there were no major reports released from Japan yesterday. The calendar is still empty for today, which suggests that we could see more or less the same behavior from the yen, unless there’s a huge shift in market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to stay resilient against the dollar in yesterday’s trading as upbeat Chinese official manufacturing PMI data helped lift the Australian dollar. For today, the NFP report could be one of the biggest movers for the comdoll gang. Australian PPI came in weaker than expected at 0.1% instead of the estimate at 0.5%, which suggests the RBA does have room to ease if needed.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (August 6, 2013)

USD

The US dollar lost ground to some of its counterparts in yesterday’s trading as risk sentiment seemed to improve and favor the higher-yielding currencies. As for economic data, the US ISM non-manufacturing PMI report came in stronger than expected as the reading climbed from 52.2 to 56.0, outpacing the consensus at 53.2. Only the trade balance is up for release today and the deficit is projected to narrow from 45 billion USD to 43.1 billion USD.

EUR

The euro was able to hold on to its recent gains against the dollar, as EUR/USD continued to trade close to the 1.3300 major psychological resistance. Data from the euro zone was mixed as the Spanish and Italian PMIs came close to expectations while the region-wide Sentix investor confidence report fell short. The actual reading improved from -12.6 to -4.9, lower than the estimate at 9.8. No major reports are due from the euro zone today, as the only releases are the Italian industrial production and German factory orders.

GBP

The British pound had a stellar performance yesterday as Cable inched close to the 1.5400 major psychological level. UK services PMI came in much higher than expected as it jumped from 56.9 to 60.2, higher than the estimate at 57.4. The manufacturing production is up for release today and it is expected to show a 0.9% rebound from the 0.8% decline seen last time.

CHF

There are no major releases from Switzerland recently, leaving USD/CHF sensitive to US data. The pair was able to rally past the .9300 handle in yesterday’s trading but ended up erasing most of its gains anyway. Consolidation could be the name of the game for USD/CHF today as the medium-tier US trade balance release isn’t expected to cause a lasting reaction.

JPY

The yen continued to edge higher against most of its counterparts, although longer-term time frames still point at consolidation. There were no major reports released from Japan recently but the low-tier leading indicators release printed a weaker than expected reading of 107%.

Commodity Currencies (AUD, CAD, NZD)

The bloodbath continued for the comdoll gang, as the Kiwi and Loonie underperformed. For the Kiwi, news of Fonterra’s product recall continued to add selling pressure while the Loonie was unable to draw buying power as Canadian banks were on a holiday. The RBA decided to cut interest rates by 0.25% in their rate statement today and surprisingly triggered a positive reaction from AUD. According to their statement, the RBA is concerned about global and domestic economic performance and analysts are pricing in another rate cut for the year.

By Kate Curtis from Trader's Way

 

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great job