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Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Sep 21, 2017)

Postby katetrades » Thu Sep 21, 2017 4:51 am

USD

The US dollar was in tight trading mode ahead of the FOMC decision, which saw the central bank keep rates unchanged as expected. During the presser, Yellen sounded optimistic about growth despite the likely transitory dip coming from the impact of the hurricanes. She also confirmed that they will be starting the balance sheet runoff in October, which would also put upward pressure on rates. The dot plot and CME FedWatch tool have indicated stronger expectations for another rate hike in December as well.

EUR

The euro gave back some of its recent gains even though the region's medium-tier data beat expectations. German PPI rose 0.2% versus the projected 0.1% uptick but traders might be booking profits ahead of Draghi's speech and on account of recent jawboning by other ECB officials.

GBP

The pound got another boost from upbeat UK retail sales, which reflected 1.0% growth in consumer spending versus the projected 0.2% uptick and the previous reading, which was upgraded from 0.3% to 0.6%. Only lending data is up for release today as traders might hold tight until UK PM May's Brexit speech next week.

CHF

The franc had a mixed run as it reacted mostly to its counterparts. There were no major reports from Switzerland after all, so the currency likely reacted to market sentiment as well. SECO economic forecasts and the Swiss trade balance are up for release today, with the latter projected to show a smaller surplus of 2.41 billion CHF compared to the earlier 3.51 billion CHF figure.

JPY

The yen has regained some ground against most of its peers as traders may be lightening up positions ahead of the BOJ decision. The currency has lost to the dollar, though, as the FOMC set the date for its balance sheet runoff in October and maintained December hike expectations. No actual changes in rates are expected from the Japanese central bank but any downbeat remarks could keep weighing on the yen.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi continued to sustain their lead against most of their peers as a widening lead for New Zealand's National Party in the polls is seen as a bullish scenario. New Zealand's GDP is due next and a 0.8% growth figure is eyed, stronger than the earlier 0.5% expansion.

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Forex Major Currencies Outlook (Sep 22, 2017)

Postby katetrades » Fri Sep 22, 2017 6:13 am

USD

The US dollar enjoyed a strong rally against its peers as economic reports turned out stronger than expected and underscored the Fed's tightening bias. Initial jobless claims fell from 282K to 259K versus the projected 302K figure while the Philly Fed index rose from 18.9 to 23.8. US flash manufacturing and services PMI are due next.

EUR

The euro was able to regain ground as European equities closed in the green as Draghi sounded more upbeat about the fiscal recovery in the region. In his testimony, he mentioned that the financial system poses a lower risk to the economy. Euro zone PMI readings are due next and strong figures from Germany and France could allow the shared currency to keep climbing.

GBP

The pound broke higher to most of its counterparts on anticipation for PM May's speech as she reportedly might offer 20 billion EUR in a transitional deal with the EU in hopes of speeding up negotiations. It also could convince the bloc to concede to maintaining access to the single market and other conditions that could favor the UK.

CHF

The franc regained some ground as risk appetite took a hit after the Fed decision. The Swiss trade balance, however, turned out weaker than expected at 2.17 billion CHF versus the projected 2.41 billion CHF reading. There are no reports due from the Swiss economy today so the franc could be more sensitive to market sentiment.

JPY

The yen edged slightly lower after the BOJ decision as the central bank maintained interest rates at current levels and kept the pace of JGB purchases unchanged. The central bank also kept a slight easing bias as hinted by Governor Kuroda during the presser. There are no reports due from Japan today so risk sentiment could be the main driver for the yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took huge hits in previous trading sessions as the impact of Fed tightening dawned on commodities. Canadian wholesale sales posted a stronger than expected 1.5% gain versus the estimated 0.7% drop, sending positive vibes ahead of the retail sales and CPI releases today. Analysts are expecting to see a 0.2% increase in headline retail sales and a 0.4% uptick for the core figure. New Zealand will be having its parliamentary elections next.

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Forex Major Currencies Outlook (Sep 25, 2017)

Postby katetrades » Mon Sep 25, 2017 4:53 am

USD

The dollar finished the week on a strong note after the FOMC decision earlier on turned out more upbeat than expected. Data on Friday turned out mixed as the flash manufacturing PMI rose from 52.8 to 53.0 versus the projected 53.0 figure while the flash services PMI fell from 56.0 to 55.1 versus the projected 55.8 figure. There are no major reports due from the US today but FOMC members Kashkari and Evans have testimonies lined up.

EUR

The shared currency was able to make a rebound against its higher-yielding peers as risk aversion peeked back in the markets. PMI readings all turned out stronger than expected, which means positive prospects for the overall economy and supports the idea of ECB tapering before the end of the year. ECB head Draghi has another testimony scheduled today and upbeat remarks could push the euro higher.

GBP

The pound paused from its recent rallies as UK PM May's speech failed to impress the bulls. UK CBI industrial order expectations also turned out weaker than expected as the reading fell from 13 to 7 to reflect slower growth instead of holding steady. There are no major reports due from the UK economy today.

CHF

The Swiss franc carried on with its mixed run as it mostly reacted to market sentiment and currency-specific factors. There were no major reports out of the Swiss economy on Friday and none are due today so the same market behavior could be seen.

JPY

The yen finished the week on a downbeat note as the BOJ's easing bias weighed on the currency. Earlier today, the flash manufacturing PMI turned out weaker than expected as it rose from 52.2 to 52.6 versus the projected rise to 53.4. BOJ Governor Kuroda has a speech lined up so additional volatility could be in the cards.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi is off to a shaky start as the weekend elections in New Zealand failed to generate a majority government for the National Party. This could mean the political limbo could last a bit longer as parties try to negotiate a coalition. New Zealand's trade balance is also due next while RBA Assistant Governor Bullock has a speech coming up. Meanwhile, oil drew a bit of support on stronger expectations of an output deal extension after the latest OPEC meeting.

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Forex Major Currencies Outlook (Sep 26, 2017)

Postby katetrades » Tue Sep 26, 2017 3:05 am

USD

The dollar paused from its climb as fresh updates from North Korea hit the newswires. Officials said that the latest provocations from the US are tantamount to declaring war on Pyongyang and that they will shoot down US bombers even if they're not in the North Korean airspace. There are no major reports today but speeches from Evans and Kashkari haven't been all that hawkish.

EUR

The euro also took a breather from its rallies after the German elections generated a victory for Merkel but this was short of a majority. This means that a coalition could be struck among the parties but that negotiations could leave political uncertainty in play for a while. The German Ifo business climate index fell from 115.9 to 115.2 instead of rising to the estimated 116.00 figure. German import prices data is due next.

GBP

The pound moved mostly sideways at the start of the week as traders are trying to assess how the meeting between Tusk and May might go. The UK PM's speech didn't do enough to rally the bulls last week so traders are doubtful that the transition deal could pass. There are no major reports due from the UK today so Brexit could be the main driver of price action.

CHF

The franc got a bid in the latter half of the day as several market uncertainties came into play. For one, there's the political uncertainty in the euro zone and New Zealand, then there's the resurfacing geopolitical tensions between the US and North Korea. There were no reports out of Swizterland on Monday and none are due today so market sentiment and currency-specific action could stay in play.

JPY

The yen got a boost from a pickup in risk aversion in the Asian region and reacted somewhat positively to news of a snap election in Japan. PM Abe is seeking fresh mandate to address the concerns regarding North Korea, so while this could mean a bit of uncertainty in the near term, it could also lead to affirmation for the government's stance. BOJ minutes are due next.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies appear to be on shaky footing again now that North Korean jitters are returning. However, CAD has been able to hold steady on speculations that the OPEC might extend its output deal beyond March 2018 to keep crude oil prices stable. New Zealand has its trade balance and ANZ business confidence index due next but traders seem to be more focused on political developments.

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Forex Major Currencies Outlook (Sep 27, 2017)

Postby katetrades » Wed Sep 27, 2017 5:02 am

USD

The US dollar tossed and turned during Fed head Yellen's speech as she admitted that the central bank may have overestimated some of the figures on employment and inflation. She repeated that the dip in inflation this year has been puzzling for the Fed and reiterated that they would adjust policy to data as needed. Durable goods orders and pending home sales reports are lined up next.

EUR

The euro continued to slide to its peers as traders focused on the outcome of the German elections, which spurred coalition talks and the rise of the AfD party. Political uncertainty could continue to weigh on the shared currency in the next few days but the focus could return to fundamentals if data comes in strong. However, there are no major reports on today's docket.

GBP

The pound is showing signs of weakness as there have been no reports to prop it any higher. Brexit remains a thorn on the pound's side and the upcoming meeting between May and Tusk should determine where the currency might be headed next. CBI realized sales data is due today and a rise from -10 to +8 is expected.

CHF

The franc continued its mixed run but managed to catch a bid on rising risk-off flows. There have been no reports from Switzerland yesterday while today has the UBS consumption indicator and the Credit Suisse Economic Expectations figure. Any improvements from their earlier readings could lend more support for the franc since the SNB has sounded less worried about currency strength recently.

JPY

The yen was able to take advantage of the pickup in risk aversion even after PM Abe called for snap elections. North Korea's foreign minister claimed that Trump has declared war and the clash of words continues between the two nations, keeping traders on edge. There are no reports due from Japan today, so market sentiment could be the main driver.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed run as the Aussie and Kiwi weakened while the Loonie tried to hold on to its current levels. Canada's finance minister mentioned that they aren't too worried about CAD strength at the moment. Still, risk aversion is weighing on these higher-yielding currencies, especially since the situation with North Korea shows no signs of abating anytime soon. Crude oil inventories and the RBNZ decision are due next.

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Forex Major Currencies Outlook (Sep 28, 2017)

Postby katetrades » Thu Sep 28, 2017 4:04 am

USD

The US dollar regained a lot of ground after US President Trump threw the spotlight back on tax reform and included a few more details. US economic data turned out mixed, with headline durable goods orders up by 1.7% versus the projected 1.0% gain and core durable goods orders posting a 0.2% uptick as expected. Pending home sales slipped by 2.6% versus the estimated 0.5% drop. US final GDP and initial jobless claims data are due next, along with a speech by FOMC member Fischer.

EUR

The euro had a mixed round as reacted mostly to country-specific events. There were no major reports out of the euro zone then and today has the German GfK consumer climate index, as well as its preliminary CPI. Analysts are expecting to see a rise from 10.9 to 11.0 for the consumer index and another 0.1% uptick in price levels. The Spanish flash CPI is due as well.

GBP

The pound had a strong rally after the CBI realized sales index jumped from -10 to +42, outpacing the consensus at +6. BOE Governor Carney has a speech lined up today and upbeat remarks on the economy and monetary policy could allow the UK currency to sustain its climb.

CHF

The franc also had a mixed run as it reacted mostly to market sentiment and its counter currencies. The Swiss UBS consumption indicator rose from 1.46 to 1.53 while the Credit Suisse Economic Expectations index rose from 25 to 28. There are no reports due from the Swiss economy today.

JPY

The Japanese yen gave up ground to its peers as the dollar raked in most of the gains. There were no reports out of Japan then while today has a speech by BOJ head Kuroda lined up. Dovish remarks could keep a lid on the yen's gains while optimistic comments could allow it to regain ground. Also any escalation with North Korean tensions could also revive demand for the safe-haven currency.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was dragged lower by cautious remarks from BOC head Poloz who reiterated that there is no pre-determined path for interest rates and that any adjustments would continue to be data-dependent. He did have a couple of upbeat remarks on inflation and the jobs market but bulls seemed mostly disappointed. The RBNZ kept rates on hold as expected while barely making any changes to their official statement, although they didn't seem too concerned about Kiwi strength.

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Forex Major Currencies Outlook (Sep 29, 2017)

Postby katetrades » Fri Sep 29, 2017 4:13 am

USD

The US dollar remains strongly supported thanks to talks of tax cuts. President Trump shared more details on the GOP proposal for fiscal reform and promised that they will get this done by the end of the year. US final GDP was also upgraded from 3.0% to 3.1%, supporting Fed December hike prospects. Core PCE price index, along with personal spending and income data, are due next.

EUR

The euro was slightly weaker against its peers as data came in weaker than expected. Germany's GfK consumer climate index fell from 10.9 to 10.8 instead of improving to the consensus at 11.0 while the preliminary CPI showed a meager 0.1% uptick as expected. German retail sales and French consumer spending are due today but the flash CPI readings from the region could generate more market reaction.

GBP

The pound was able to make a bit of a recovery even after BOE head Carney confirmed that the central bank can't do much to reverse Brexit effects. This was followed by a speech by UK PM May who said that work is needed to restore finances back to health. The attention could shift back to data today as the UK will release its current account balance and final GDP reading. Net lending to individuals and mortgage approvals data are also lined up.

CHF

The franc caught a bid despite the lack of top-tier data as risk aversion was still present in the markets. The KOF economic barometer is due next and it is expected to improve from 104.1 to 105.5, which might allow the Swiss currency to extend its wins.

JPY

The yen had a mixed run as it reacted mostly to currency-specific factors while waiting for more clues on the snap elections. The prospect of an attack from North Korea is keeping the lower-yielding currency supported but traders are also wary of potential downside surprises in today's release of core CPI, household spending, retail sales, and preliminary industrial production data.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi and Loonie were in a weak spot thanks to downbeat central bank rhetoric. Although the RBNZ kept rates unchanged as expected, their less upbeat outlook for growth due to a construction sector slowdown has put downside pressure on the Kiwi. Meanwhile, BOC head Carney sounded less optimistic than expected in his testimony, weighing on BOC hike odds for next month or December. Canadian GDP is due next and a 0.1% expansion for July is eyed. Chinese PMI readings are due over the weekend.

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Forex Major Currencies Outlook (Oct 02, 2017)

Postby katetrades » Mon Oct 02, 2017 5:45 am

USD

The US dollar gave back most of its recent wins at the end of the week on profit-taking and the lack of follow-through on tax reform. The ISM manufacturing PMI, which should serve as a leading indicator for Friday's NFP, is due today and analysts are expecting a drop from 58.8 to 57.9. The Markit final manufacturing PMI reading is also due, along with data on construction spending.

EUR

The euro finished the previous week on a strong note, despite mixed reports from its top economies. German retail sales fell 0.4% instead of rising by 0.5% while French consumer spending dropped 0.3% instead of posting the estimated 0.2% uptick. German unemployment change was stronger than expected at a 23K drop in joblessness versus the projected 5K reduction while French preliminary CPI showed a smaller than expected 0.1% dip instead of the estimated 0.2% drop in price levels. However, CPI flash estimates were both weaker than expected. Final manufacturing PMIs and the region's jobless rate are lined up today.

GBP

The pound was in a weak spot on Friday as the current account balance showed a larger deficit of 23.2 billion GBP versus the estimated 15.3 billion GBP shortfall while the earlier reading suffered a downgrade. PM May's speech over the weekend failed to rally positive sentiment for the UK leading up to Brexit. The manufacturing PMI is due today and a dip from 56.9 to 56.3 is eyed.

CHF

The franc had a mixed run as it mostly reacted to currency-specific events on the lack of top-tier reports from Switzerland. The KOF economic barometer improved from an upgraded 104.2 reading to 105.8, outpacing the consensus at 105.5. The Swiss manufacturing PMI is due today and a fall from 61.2 to 60.6 is expected.

JPY

The Japanese yen also had a mixed performance as it was driven by market sentiment and its counter currencies. Earlier today, the Tankan survey printed a gain from 17 to 22 for its manufacturing component and no change for its non-manufacturing component at 23. The final manufacturing PMI was upgraded from 52.6 to 52.9. There are no other reports lined up from Japan so sentiment could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker towards the end of the week as there were still signs of risk aversion in the financial markets. Australian and Chinese banks are closed for the holiday today so liquidity could be thin. Over the weekend, China's manufacturing PMI rose from 51.7 to 52.4 instead of falling to 51.5 while the non-manufacturing PMI improved from 53.4 to 55.4. The Caixin version of the manufacturing PMI was down from 51.6 to 51.0.

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Forex Major Currencies Outlook (Oct 03, 2017)

Postby katetrades » Tue Oct 03, 2017 3:47 am

USD

The Greenback got a strong boost from better than expected manufacturing PMI data, as these lifted expectations for the NFP and therefore a December Fed rate hike. The ISM reading rose from 58.8 to 60.8 versus the consensus at 57.9 while the Markit final reading reading was upgraded from 53.0 to 53.1. Components for employment and prices both posted strong gains. Only a speech by FOMC member Powell and the total vehicle sales report are lined up today.

EUR

The euro was one of the weakest performers as it was dragged down by the Catalonian elections. The vote for independence sets a precedent for other European nations seeking their own government and undermines the strength of the union, although the Spanish government is still challenging the constitutionality of the vote. Euro zone data came in mixed, with the jobless rate and Italian final manufacturing PMI coming in weaker than expected and the rest coming in mostly in line with consensus. German banks are closed for the holiday today while the Spanish unemployment change reading is due.

GBP

The pound was also in a weak spot as Brexit risks remained in the spotlight while data came in weak. The manufacturing PMI slipped from 56.7 to 55.9, lower than the estimated drop to 56.3. Construction PMI is due today and no change from the earlier 51.1 figure is expected. Market attention could still be focused on Brexit-related updates as the UK government scrambles to restore confidence in their bargaining stance.

CHF

The franc tracked the losses of its fellow European currencies as Swiss retail sales disappointed with a 0.2% drop instead of the estimated 0.5% uptick. A bit of risk aversion kept the Swiss currency supported and the lack of reports from Switzerland today could leave market sentiment in play.

JPY

The yen raked in some gains against most of its peers as risk-taking tumbled on geopolitical concerns. Among these are the violence in the Catalonian polls and the deadly attack in Las Vegas. Japan's final manufacturing PMI was also upgraded from 52.6 to 52.9. There are no reports due from Japan today so risk sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls fell victim to risk aversion and dollar strength but managed to chalk up gains against the European currencies. Rising oil output weighed on the commodity and the positively-correlated Loonie while the Aussie recouped some of its previous losses ahead of the RBA decision. No actual rate changes are expected but a shift to a more cautious stance is eyed. New Zealand has its GDT auction coming up in the late US session and another gain in dairy prices could be Kiwi bullish.

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Forex Major Currencies Outlook (Oct 04, 2017)

Postby katetrades » Wed Oct 04, 2017 4:47 am

USD

The dollar managed to hold on to most of its recent gains as equity indices shot to record highs on strong auto sales. Total vehicle sales posted their strongest rise so far this year as purchases were made to replace cars damaged by the hurricanes. The ISM non-manufacturing PMI and ADP non-farm employment change data are lined up today and these are considered leading indicators for the NFP. Fed head Yellen also has a speech lined up and might have more clues on Fed policy biases.

EUR

The euro was slightly weaker against most of its peers as political uncertainty stemming from the Catalan elections continued to haunt the shared currency. Spanish unemployment change data came in weaker than expected at a 27.9K increase in joblessness versus the estimated 21.3K gain. Final services PMI readings and the region's retail sales report are lined up next, along with a speech by ECB head Draghi.

GBP

The pound was one of the weakest performers of the day as it was dragged down by weak construction PMI. The reading slumped from 51.1 to 48.1 instead of holding steady as expected and the services PMI is due next. Analysts are also expecting no change from the earlier 53.2 figure but a disappointment may be underway, given how the other sectors turned out. The BOE FPC also judged that Brexit could pose larger risks to the banking sector than initially anticipated.

CHF

The franc remained supported throughout the day, despite the lack of top-tier data from Switzerland. There are still no reports due from the Swiss economy today but the presence of risk-off vibes, particularly in the European region, could render this currency the safe-haven of the bunch.

JPY

The yen was also able to hold its ground as a bit of risk aversion lingered in the markets on geopolitical risks. The BOJ core CPI ticked higher from 0.4% to 0.6% to reflect stronger inflationary pressures and a potential shift to a less dovish stance for the central bank later on. Japanese consumer confidence also improved from 43.3 to 43.9 versus the 43.5 consensus.

Commodity Currencies (AUD, NZD, CAD)

The comdolls tried to hold steady against the dollar and chalked up some wins to the European currencies. New Zealand's GDT auction yielded a 2.4% drop in dairy prices, following the earlier 0.9% gain. The API reported another draw in crude oil stockpiles so the EIA report due today could also show a reduction, with analysts expecting to see a drop of 0.5 million barrels.

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