Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (June 18, 2015)

USD

The US dollar suffered a sharp selloff after the FOMC statement, when Fed Chairperson Janet Yellen refrained from confirming that a rate hike in September was in order. The Fed actually downgraded their forecasts for growth and employment this year while upgrading their estimates for the next two years. The statement didn’t focus on weak inflationary prospects and the dollar’s negative impact on price levels, indicating that policymakers are no longer too concerned about these issues. Inflation readings are up for release today and the US could show a 0.5% increase in the headline CPI and a 0.2% uptick for the core CPI. The initial jobless claims figure and the Philly Fed manufacturing index are also due today.

EUR

The euro managed to take advantage of dollar weakness but still kept its gains limited against its other forex rivals, as traders are waiting to see how today’s set of Greek debt talks turn out. Euro zone final CPI readings have been unchanged from the initially reported 0.3% headline figure and 0.9% core figure. There are no other major reports on tap from the euro zone today.

GBP

The pound was able to extend its rallies in recent trading, despite weaker than expected headline jobs data. The economy added only 6.5K jobs in May, lower than the projected 12.1K increase, although the previous reading enjoyed a small upgrade. What drove the pound higher was the strong jump in average hourly earnings of 2.9% versus the projected 2.5% gain. Apart from that, the BOE minutes also emphasized that the economy could draw more support from this increase in wage inflation.

CHF

The franc was able to take advantage of dollar weakness in recent trading but is consolidating prior to the SNB rate statement. The central bank isn’t expected to announce any surprises which might lead to sharp moves for franc pairs, but it wouldn’t hurt to play it safe. Market watchers could also be on the lookout for any comments regarding franc strength or the impact of the Greek debt troubles on Switzerland.

JPY

The yen advanced to the dollar and most of its major counterparts, as traders transferred their safe-haven holdings from the dollar to the yen. Japan reported a smaller trade balance, which reflected another pickup in exports, something that the BOJ has already been highlighting in their recent statements. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still in a weak spot compared to most of their counterparts, with the Kiwi leading the declines. New Zealand printed a weaker than expected 0.2% growth figure for the first quarter, hinting that another RBNZ cut might be needed. There are no major reports lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

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Forex Major Currencies Outlook (June 19, 2015)

USD

The US dollar regained ground against most of its forex rivals, except for the British pound, yesterday when data came in mostly stronger than expected. The headline and core CPI readings missed expectations, but the initial jobless claims, current account balance, Philly Fed index, and CB leading index came in strong. There are no major reports due from the US economy today, leaving the dollar sensitive to risk flows. Keep in mind though that FOMC member Williams has a testimony lined up.

EUR

The euro kept its gains limited in recent trading as the Eurogroup meetings still failed to come up with an action plan for Greece. The leaders set an emergency meeting for Monday in hopes of ironing out the technical details need to reform the country's pension system, which might be key to unlocking the next set of bailout funds and allowing the country to avoid defaulting this month. There have been no reports released from the euro zone then and only the German PPI and euro zone current account balance are due today.

GBP

The pound extended its gains yesterday, thanks to stronger than expected UK retail sales data. The report showed a 0.2% uptick in May instead of staying flat, but the previous month's reading was downgraded to show just a 0.7% uptick. The UK public sector net borrowing report is lined up for today and another good reading might lead to more gains for the pound.

CHF

The franc had a bit of a volatile day since SNB officials made some remarks regarding franc strength during their policy statement. At the end of the day, no actual policy measures were announced, allowing the currency to breathe a sigh of relief. For today, the Swiss calendar is empty, which means that the franc might just follow in the euro's footsteps.

JPY

The yen was stuck in consolidation mode ahead of today's BOJ interest rate decision. No actual policy changes are expected but the central bank might take this opportunity to highlight the strength in the economy and emphasize that no further easing is needed, which might then keep the yen supported.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was still reeling from the weak New Zealand GDP release throughout the day, but the Canadian dollar managed to advance against its counterparts. For today, Canada is set to print its CPI and retail sales reports, with strong readings likely to give the Loonie another boost. Core CPI is expected to pick up by 0.3% while headline CPI might show a 0.4% increase. Core retail sales could increase by 0.3% while headline retail sales could rise by 0.7%.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 22, 2015)

USD

The US dollar regained a bit of ground against its rivals on Friday, as traders booked profits ahead of the weekend. There have been no economic reports released from the US economy then while today has the existing home sales data on tap. The report could show a pickup from 5.04M to 5.27M, which would reflect stronger housing demand and possibly keep the dollar strong.

EUR

The euro faces event risks in the form of the European leaders' emergency meeting today. Any signs that a deal will be reached, whether it involves Greece accepting a list of economic reforms or the creditors relaxing their conditions, could be bullish for the euro. The lack of agreement could keep gains in check, as traders come to terms with the idea of a default or Grexit. There are no economic reports lined up from the region today.

GBP

The pound carried on with its ascent last week, thanks to positive government budget data. The public sector net borrowing report showed a 9.4 billion GBP deficit, lower than the projected 10.1 billion GBP borrowing figure. Meanwhile, the previous reading was revised to show a smaller deficit of 5.5 billion GBP. No reports are lined up today but MPC member Cunliffe is set to testify.

CHF

The franc advanced against the euro and some of its forex rivals last week, despite the lack of top-tier data from Switzerland. There are still no reports lined up from the Swiss economy today, leaving the franc following in the euro's footsteps.

JPY

The yen had a mixed performance as it reacted mostly to risk sentiment last Friday. There have been no reports released from Japan then and none are due today, allowing traders to position themselves ahead of the spending and inflation reports due later on this week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to sell off against the safe-havens, with the Loonie's tumble worsened after the release of Canada's CPI and retail sales figures. CPI data actually came in stronger than expected, but headline and core consumer spending fell short. Earlier today, New Zealand reported a 0.1% uptick in visitor arrivals and a 7.1% gain in consumer spending, which might contribute positively to overall growth. No other reports are lined up from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 23, 2015)

USD

The US dollar was able to recover in recent trading, as risk aversion seemed to be present in the markets. There have been no signs of a deal in the EU emergency meeting, which led traders to start accepting that a default might take place. Data from the US came in stronger than expected, with existing home sales climbing from an upgraded 5.09M to 5.35M versus the consensus at 5.27M. Durable goods orders data are up for release today and traders are expecting to see a 0.6% increase in the core figure and a 0.6% decline in the headline figure. A testimony by FOMC member Powell is also scheduled today.

EUR

The euro suffered a sharp selloff in the early Asian trading session as the prospect of a Greek debt default weighed on the markets. There has been no agreement made in the latest emergency meeting and all eyes and ears now turn to the EU Summit later on this week. For today, German and French PMIs are due, with improvements expected for the manufacturing sector.

GBP

The pound was also sold off at the start of the day, as traders liquidated their long positions in anticipation of more uncertainty from Greece. There have been no major reports released from the UK on Monday and MPC member Cunliffe’s speech didn’t contain any surprises. Today, the CBI industrial orders expectations index is due and an improvement from -5 to 1 might be recorded.

CHF

The franc followed in the euro’s footsteps and sold off against most of its rivals, as sentiment towards the European markets turned sour. There have been no reports out of Switzerland yesterday and none are due today, indicating that the franc might keep taking its cue from the euro.

JPY

The yen advanced against most of its rivals except for the US dollar, as risk aversion returned to the markets. Japan’s flash manufacturing PMI for June was weaker than expected since the reading fell from 50.9 to 49.9, reflecting a return to industry contraction. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were also hurt by risk aversion in today’s trading sessions, as China showed a contraction in its HSBC flash manufacturing PMI. The reading climbed from 49.2 to 49.6 in June, still below the 50.0 mark indicating industry expansion. Australia’s CB leading index showed a 0.3% decline while the HPI printed a 1.6% gain, weaker than the estimated 2.2% increase.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 24, 2015)

USD

The US dollar took advantage of the run in risk aversion earlier on in the day, as traders started to accept the idea that Greece might default on its loans. However, weaker than expected data from the US prevented the dollar from extending its rallies throughout the US session. Core durable goods orders came in slightly weaker than expected with a 0.5% gain versus the projected 0.6% increase while the headline figure missed expectations of a 0.6% decline and posted a larger 1.8% drop. The house price index and the flash manufacturing PMI were also weaker than expected while new home sales and the Richmond manufacturing index showed better than expected results. For today, the final GDP reading for Q1 is due and a small upward revision from the 0.7% contraction is eyed.

EUR

The euro suffered a sharp selloff against its forex rivals at the start of the trading day when the emergency meeting in the EU failed to draw up an agreed upon reform plan for Greece. Euro zone PMI readings came in stronger than expected, with Germany and France reporting improvements in both manufacturing and services sectors. The German Ifo business climate reading is up for release today and a dip from 108.5 to 108.2 is expected, owing mostly to the downbeat sentiment surrounding the Greek debt issue.

GBP

The pound also suffered a selloff against its forex counterparts, as the CB industrial orders expectations reading dipped from -5 to -7 instead of improving to 1. BBA mortgage approvals data is up for release today and traders are expecting to see a climb from 42.1K to 43.1K, which might allow the pound to recover.

CHF

The franc gave up a lot of ground to the dollar, just like its European peers. There have been no reports released from Switzerland then, forcing the currency to take its cue from the euro and overall sentiment. Today, the UBS consumption indicator is up for release and it might show an improvement from the previous 1.25 figure. Later on, the SNB will release its quarterly bulletin.

JPY

The yen retreated to the dollar but advanced to its higher-yielding rivals as risk aversion set in the financial markets. Data from Japan was weaker than expected, as the flash manufacturing PMI indicated industry contraction when it fell from 50.9 to 49.9. Earlier today, the BOJ released their monetary policy meeting minutes which barely contained any changes from their previous ones.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance as these were mostly tossed around by changing risk sentiment. Australia printed a couple of weak figures in the Asian session while China showed a small climb in its HSBC flash manufacturing PMI. There are no major reports lined up from the comdolls today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 25, 2015)

USD

The US dollar was able to advance against some of its counterparts yesterday but gave up most of its recent gains in today’s Asian trading session. As expected, the US Q1 GDP was upgraded from -0.7% to -0.2%, reflecting a smaller contraction than initially reported. For today, initial jobless claims and the core PCE price index is up for release. Personal income and spending reports are also due, and stronger than expected figures on all fronts might be enough to allow the dollar to regain ground.

EUR

The euro bounced back from its recent slide to the safe-havens but continued to chalk up losses to the commodity currencies. There still hasn’t been a deal struck between Greece and its creditors, increasing the odds of seeing a default and a Grexit. Data from the euro zone was weaker than expected, as the German Ifo business climate index fell from 108.5 to 107.4. For today, the German GfK consumer climate report is up for release and a decline is expected as well.

GBP

The pound was unable to sustain its previous rallies when the BBA mortgage approvals report fell short of expectations. The figure climbed from 42.0K to 42.5K, lower than the projected gain to 43.0K. The CBI realized sales index is due today and a sharp drop from 51 to 32 is projected, which might be indicative of weaker consumer spending figures down the line.

CHF

The franc was able to advance against some of its rivals, thanks to an improvement in the Swiss UBS consumption indicator from 1.67 to 1.73. SNB head Thomas Jordan is set to give a testimony today and might repeat his comments on the franc’s strength and how they’d like to see lower exchange rate levels.

JPY

The yen had a mixed trading performance as it mostly acted as a counter currency against its rivals. The BOJ monetary policy meeting minutes contained no surprises, as it simply indicated that policymakers believed that their easing efforts are working. There are no reports lined up from Japan today so risk sentiment might continue pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls got a strong boost in today’s Asian trading session from the Chinese central bank’s decision to increase liquidity by 35 billion yuan this week. This could lend support to businesses and spur demand for raw material products from Australia. No reports are lined up from the comdoll economies today, which suggests that the recent PBOC decision might continue to affect price action for the rest of the day.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 26, 2015)

USD

The US dollar consolidated against most of its FX trading rivals in recent sessions, as data from the economy came in mixed. Personal spending came in better than expected with a 0.9% gain while the personal income figure fell short of expectations at a mere 0.5% uptick. The flash services PMI was also weaker than expected, as the reading fell from 56.2 to 54.8, reflecting slower industry expansion. For today, only the revised UoM consumer sentiment figure is due and no revisions are expected for the initially reported 94.6 figure.

EUR

The euro managed to hold steady against the dollar but was still under heavy selling pressure against some of its FX trading counterparts. There have been no signs of a deal between Greek government officials and its creditors, increasing the odds of the debt-ridden nation defaulting on its loans and exiting the euro zone by next week. Germany’s GfK consumer climate index dipped from 10.2 to 10.1 as expected, but it appears that euro traders are more interested in Greek debt developments.

GBP

The pound managed to regain a bit of ground in recent FX trading sessions despite weaker than expected CBI realized sales data. The index fell from 51 to 29 versus the projected 32 reading. There are no economic reports lined up from the UK today but BOE Governor Carney has a testimony lined up later on.

CHF

The franc was also stuck in consolidation, as there were no reports to push the Swissy around in recent FX trading sessions. Traders are still waiting for updates on the EU meetings between Greece and its creditors before deciding how to play the franc. There are still no reports lined up from Switzerland today.

JPY

Japan released a bunch of economic reports in today’s Asian trading session, reflecting small improvements in the economy. The national core CPI came in better than expected with a 0.1% gain versus the projected flat reading while household spending showed a 4.8% jump instead of the estimated 3.5% increase. The unemployment rate held steady at 3.3% as expected while the Tokyo core CPI showed a 0.1% uptick as expected.

Commodity Currencies (AUD, NZD, CAD)

Comdolls got a good boost in yesterday’s sessions after the PBOC ramped up liquidity in their system. However, New Zealand’s trade balance released earlier today erased some of those wins, as the underlying data reflected another downturn in both imports and exports. There are no other reports due from the comdoll economies today.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 29, 2015)

USD

The US dollar was off to a strong start this week, thanks to risk aversion stemming from the weekend events. Greece was unable to come up with an agreement with its creditors during their weekend meetings while China announced another round of stimulus efforts. US pending home sales are up for release today but it looks like risk sentiment might continue to push dollar pairs around.

EUR

The euro gapped lower against all its forex counterparts when the ECB refrained from increasing its emergency fund to Greece and allowed capital controls to be put in place. The IMF deadline is still set for tomorrow and the inability of Greece to make this payment might lead to more weakness for the shared currency and talks of a Grexit. As for economic data, German and Spanish preliminary CPI readings are due today.

GBP

The pound was weighed down by the pessimistic sentiment in the European markets, also leading to gaps across the charts. Data from the UK includes the net lending to individuals and mortgage approvals figures, with strong improvements possibly giving the pound a boost.

CHF

The franc was also on weak footing following the weekend events in the EU, although traders seem careful to buy up the currency due to the SNB’s rhetoric. There are no reports lined up from Switzerland today, which means that franc traders could pay close attention to developments in the Greek debt talks.

JPY

The yen encountered a round of volatility at the start of this trading week when sources from the BOJ claimed that the central bank might also push up short-term liquidity in the event of a market crash from the Greek debt crisis. This lead to a quick selloff for the yen, which happened to gap up against its forex counterparts over the weekend as well.

Commodity Currencies (AUD, NZD, CAD)

Comdolls reacted to the Chinese central bank’s interest rate cut, leading to a bit of gains for the Aussie and Kiwi. The PBOC decided to lower benchmark and deposit rates, as well as their RRR, in order to limit the losses on the Chinese stock market. The increase in liquidity could mean higher business activity, which might wind up supporting trade activity in Australia and New Zealand.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (June 30, 2015)

USD

The US dollar had a mixed performance, although it was generally weaker against most currencies at the end of the day. The weekend gaps were mostly filled, as traders started to book profits ahead of event risks and a shortened trading week. Data from the US came in weaker than expected, as the pending home sales report printed a mere 0.9% gain instead of the projected 1.3% increase while the previous reading suffered a downgrade. Chicago PMI and US CB consumer confidence numbers are up for release today and strong data, combined with risk aversion, could pave the way for dollar rallies.

EUR

The euro staged a strong recovery against its forex counterparts after gapping down over the weekend. Investors are still hopeful that Greece can strike a deal with its creditors before the IMF deadline is up today. If the country fails to meet its 1.6 billion EUR in debt repayments, it could be forced to pay in arrears or possibly default on its debt. This could prompt talks of a Grexit and threaten the stability of the euro as a shared currency. Meanwhile, traders could also take a look at Germany’s retail sales and unemployment change figures, along with the euro zone CPI flash estimates, before the IMF deadline kicks in.

GBP

The pound was unable to recover against the safe-haven currencies in recent trading sessions, as data from the UK came in weak. Public lending to individuals was worse than expected at 3.1 billion GBP versus the projected 3.3 billion GBP figure while mortgage approvals came in at 64K, lower than the estimated 69K reading. The UK current account balance and final GDP reading for Q1 is up for release today and strong figures could allow the pound to regain ground.

CHF

The franc rallied against most of its forex counterparts towards the end of the US trading session, despite concerns that the SNB could intervene in the market to keep the currency weak. There have been no reports released from Switzerland then, with the franc taking its cue from the euro. For today, the KOF economic barometer is up for release and a climb from 93.1 to 93.7 is expected.

JPY

The yen took advantage of the run in risk aversion to rally against its forex rivals. Japanese retail sales came in stronger than expected with a 3.0% gain versus the projected 2.1% increase while the industrial production figure was downgraded to show a 2.2% decline. For today, the average cash earnings report turned out to be a disappointment with only a 0.6% gain instead of the projected 0.7% increase while the previous reading was downgraded.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were off to a weak start today, as data from Australia and New Zealand turned out weaker than expected. HIA new home sales slumped by 2.3% in Australia while the ANZ business confidence index in New Zealand fell from 15.7 to -2.3, reflecting pessimism. Weaker oil prices are currently weighing on the Loonie but the upcoming Canadian GDP release could provide fresh volatility in the US session.

By Kate Curtis from Trader's Way

 

[katetrades]

Forex Major Currencies Outlook (July 1, 2015)

USD

The US dollar regained a bit of ground on risk aversion after Greece defaulted on its loan to the IMF. Data from the US came in mixed, with the Chicago PMI missing expectations and the CB consumer confidence index printing stronger than expected results. For today, the ADP non-farm employment change report could pose an event risk for dollar trades, with analysts expecting to see stronger hiring gains of 219K compared to the previous 201K.

EUR

The euro didn’t sell off as much when Greece officially entered default with the IMF, as traders already priced in this possibility a long while back. Data from the euro zone was mixed, as Germany reported weaker than expected hiring gains of 1K while the region’s flash CPI estimates came in line with expectations. Manufacturing PMIs from the region’s largest economies are lined up today, although updates on the Greek debt crisis could continue to push pairs around.

GBP

The pound also suffered a selloff in recent trading, even though there were no major catalysts lined up. Traders are worried that debt contagion could spill over to the UK from Greece, which could be a burden to the country’s finances. The UK manufacturing PMI is up for release today and a climb from 52.0 to 52.6 is expected. BOE Governor Carney is also set to give a testimony and reassuring remarks could help boost the pound.

CHF

The franc was mostly flat in recent trading, although it did chalk up some losses after Greece defaulted. The KOF economic barometer was weaker than expected as it fell to 89.7 while the previous reading suffered a downgrade. Swiss manufacturing PMI is due today and a climb from 49.4 to 50.0 is eyed.

JPY

Japan printed improvements in its latest Tankan survey, with the manufacturing component climbing from 12 to 15 and the non-manufacturing index improving from 19 to 23. The final manufacturing PMI for June was also upgraded from 49.9 to 50.1, reflecting industry expansion. No other reports are lined up from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to score gains after China reported improvements in its official manufacturing and non-manufacturing PMI readings. In addition, Australia posted a 2.3% rebound in building approvals. Later on, New Zealand is set to have another dairy auction and a decline in prices might drive the Kiwi lower again.

By Kate Curtis from Trader's Way