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Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Oct 05, 2017)

Postby katetrades » Thu Oct 05, 2017 8:49 am

USD

The US dollar barely got a boost from upbeat ISM non-manufacturing PMI and ADP non-farm employment change data as the focus was on the next Fed Chair. There have been rumors that dovish member Powell is being eyed to replace Yellen when her term expires in February, weakening rate hike expectations for next year. The ISM non-manufacturing PMI rose to 59.8 versus the 55.5 consensus and featured a gain in the jobs component while the ADP reading came in at 135K versus 131K. The initial jobless claims and trade balance are due next, along with speeches by FOMC members Powell and Harker.

EUR

The euro was able to chalk up some gains against its counterparts when the King of Spain addressed the unrest related to the latest Catalan elections. His speech provided a bit more reassurance for the markets and the shared currency, which was on shaky footing in anticipation of similar independence votes in other European nations. Euro zone services PMI readings were mixed but mostly in line with expectations, except that of Italy. The ECB minutes are due next and traders are on the lookout for tapering remarks.

GBP

The pound was able to regain ground on stronger than expected UK services PMI. The reading ticked up from 53.2 to 53.6 instead of holding steady as many expected or posting a bleak figure like the manufacturing and construction PMIs. Since the services sector accounts for majority of UK economic activity, pound bulls were more confident that the BOE can stick to its hawkish bias. There are no major reports due from the UK today.

CHF

The franc gave up some ground as sentiment improved in the European area and safe-haven demand dipped. There were also no reports to give the Swiss currency an extra boost then. Swiss CPI is due next and analysts are expecting to see a 0.2% uptick in price levels after the previous flat reading.

JPY

The yen edged slightly higher against its peers even though it was still stuck in its short-term range. There were no reports out of Japan then and none are due today, which suggests that yen pairs could be vulnerable to market sentiment and currency-specific factors.

Commodity Currencies (AUD, NZD, CAD)

Australian economic data turned out mixed today, with retail sales coming up short of the 0.3% gain and posting a surprise 0.6% decline. The trade balance, on the other hand, showed a larger than expected surplus of 0.99 billion AUD versus the estimated 0.88 billion AUD and the earlier 0.81 billion AUD figure. Crude oil inventories dropped by 6 million barrels versus the estimated 0.5 million draw but failed to shore up crude oil or the Loonie. Canada's trade balance is due next and a smaller deficit of 2.6 billion CAD is eyed.

By Kate Curtis from Trader's Way
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Forex Major Currencies Outlook (Oct 06, 2017)

Postby katetrades » Fri Oct 06, 2017 5:19 am

USD

The US dollar capped off another good day as it raked in gains from upbeat data and hawkish Fed remarks. Officials George, Williams, and Harker reaffirmed their inclination for tightening again in December while expressing optimism that inflation will eventually pick up. Meanwhile, the trade balance, factory orders, Challenger job cuts, and initial jobless claims all came in better than expected. The NFP is expected to show a gain of 88K in hiring versus the earlier 156K increase, and traders are also likely to pay close attention to revisions and wage growth.

EUR

The euro weakened to most of its peers as political uncertainty in Spain was at the front and center. The ECB minutes did little to support the shared currency as there weren't many tapering clues to be found. Only medium-tier reports like German factory orders, French trade balance, and Italian retail sales are lined up today.

GBP

The pound took a huge tumble against most of its counterparts on Prime Minister May's failure to ignite confidence once again during her latest speech. There were no major reports out of the UK economy then and speeches by BOE members McCafferty and Haldane didn't dwell too much on monetary policy biases. Only the Halifax HPI is due today, along with another speech by Haldane.

CHF

The franc slid across the board as SNB head Jordan hit the newswires with another round of jawboning. He also explicitly stated that it wouldn't be a good time to tighten monetary policy. Swiss CPI came in line with expectations of a 0.2% uptick while today has SNB foreign currency reserves data due. A large jump in foreign holdings could keep traders wary of central bank intervention.

JPY

The yen advanced to most of its higher-yielding counterparts as risk aversion was present in the latter sessions. Japanese average cash earnings jumped 0.9% versus the projected 0.5% uptick and the earlier 0.6% drop. There are no other reports lined up from Japan, leaving yen pairs to be sensitive to global bond yields and dollar price action.

Commodity Currencies (AUD, NZD, CAD)

The Loonie slid lower as Canada's trade balance disappointed with a larger deficit of 3.4 billion CAD versus the projected 2.6 billion CAD shortfall and the earlier 3.0 billion CAD deficit. Both exports and imports dipped to signal weak internal and external demand. Canada's jobs report is due next and another miss would severely dampen BOC rate hike hopes. Analysts are expecting to see a gain of 13.9K in hiring. The Ivey PMI is also lined up and could show a dip from 56.3 to 56.0.

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Forex Major Currencies Outlook (Oct 09, 2017)

Postby katetrades » Mon Oct 09, 2017 2:45 am

USD

The US dollar had a volatile run during the NFP release as the actual figure showed a surprise 33K drop versus the estimated 88K gain. The previous reading featured an upgrade from 156K to 182K so traders are holding out for a positive revision in the September numbers later on. The upside surprise in average hourly earnings at 0.5% versus 0.3% also kept the US currency supported. US banks are closed in observance of Columbus Day today so there are no major reports lined up.

EUR

The euro had a mixed run as it was propped up by positive fundamentals but the political uncertainty in Spain is also keeping a lid on its gains. Medium-tier reports were mostly stronger than expected as German factory orders surged 3.6% versus the estimated 0.7% uptick while the French trade balance showed a smaller than expected deficit of 4.5 billion EUR. German industrial production data is due today and a 0.9% gain is eyed after the earlier flat reading while the euro zone Sentix investor confidence index could drop from 28.2 to 26.8.

GBP

The pound was still in a weak spot as Brexit concerns overshadowed upside data surprises earlier on. UK Halifax HPI showed a 0.8% gain instead of staying flat but the focus was on the government's negotiating stance and how PM May appears to be losing support even within the Conservative Party. There are no major reports due from the UK today so the focus could be on Brexit updates.

CHF

The franc was able to rake in some gains against most of its rivals, except against the US dollar. SNB foreign currency reserves increased from 717 billion CHF to 724 billion CHF, which wasn't enough to convince market watchers that the central bank is intervening in the forex market. There are no major reports due from Switzerland today so market sentiment could push franc pairs around.

JPY

The yen was able to rally across the board on downbeat US NFP results and a bit of risk aversion. Japanese average cash earnings came in stronger than expected with a 0.9% gain versus the estimated 0.5% increase. Japanese banks are closed for the holiday today so liquidity could be tight and market sentiment could stay in play.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued to chalk up more losses on another disappointing piece of data. Employment rose 10K versus the estimated 13.9K increase and the earlier 22.2K gain, but the jobless rate held steady at 6.2% instead of rising to 6.3%. The Ivey PMI also beat expectations with a rise from 56.3 to 59.3 versus the estimated dip to 56.0. Canadian banks are closed for the holiday today and the only major report that might push comdolls around is the Chinese Caixin services PMI, which could advance from 52.7 to 53.1.

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Forex Major Currencies Outlook (Oct 10, 2017)

Postby katetrades » Tue Oct 10, 2017 9:16 am

USD

The US dollar was stuck in its ranges for the most part of the day as banks were closed in observance of Columbus Day. Dovish FOMC member Kashkari has a speech lined up today and the IBD/TIPP Economic Optimism Index is due. Other than that, US markets could continue to take their cue from market sentiment and earnings reports.

EUR

The shared currency had a mixed run but it did take a few hits on political uncertainty in Spain and Germany. Catalonia's bid for independence is still being challenged but has not kept investors from worrying that other European cities might follow its lead. Meanwhile, Merkel's political party continues to seek a coalition with the Greens but there has been no official word yet. Data turned out better than expected as German industrial production jumped 2.6% versus the estimated 0.9% uptick while the region's Sentix Investor Confidence index landed at 29.7 versus 28.6. French and Italian industrial production, along with the German trade balance, are due next.

GBP

The pound was able to score some wins when PM May assured that a two-year transition period will be in play after Brexit. She did float the idea of a 'no deal' scenario and said that the ball is in the EU's court. UK manufacturing production data is due today and a 0.2% uptick is eyed after the earlier 0.5% gain. Industrial production is projected to post another 0.2% uptick.

CHF

The franc was weaker against most of its peers as there were no reports from the Swiss economy yesterday. The Swiss jobless rate is up for release today and no change from the earlier 3.2% figure are eyed. This could leave the franc sensitive to the usual slew of currency-specific reports and market sentiment.

JPY

The yen was stuck in consolidation at the start of the week on the lack of major market catalysts. Yen pairs appear to be breaking higher in today's Asian session, though, even as Japan's current account balance came in better than expected at a surplus of 2.27 trillion JPY versus the estimated drop to 1.98 trillion JPY. The Economy Watchers Sentiment index is due next and a rise from 49.7 to 49.9 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly weaker for the day as China printed a downbeat Caixin services PMI of 50.6 versus the earlier 52.7 and estimated 53.1 figures. OPEC officials expressed more support for an extension of the output deal but the positively-correlated Loonie failed to benefit from the pickup in oil prices. The Kiwi remains on the back foot as the political uncertainty lingers in parliament. Canada has its housing starts and building permits coming up, along with a speech by BOC policymaker Wilkins.

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Forex Major Currencies Outlook (Oct 24, 2017)

Postby katetrades » Tue Oct 24, 2017 2:57 am

USD

The US dollar rallied then reversed to start the week as equities ended the day in the red on weaker tech and industrials performance. There were no reports out of the US economy on Monday as traders kept their focus on Trump's next Fed Chairperson appointment. Medium-tier reports such as flash manufacturing and services PMIs, as well as the Richmond manufacturing index, are lined up next.

EUR

The euro was off to a slow start as it retreated to some of its peers while moving sideways against the rest. Euro zone consumer confidence was unchanged as the index held steady at -1 as expected. Flash manufacturing and services PMIs from Germany and France are lined up today and strong figures could set the tone for an upbeat ECB decision later this week.

GBP

The pound managed to hold its ground despite dovish remarks from BOE MPC member Cunliffe. While he acknowledged that the economy has seen improvements, he also warned that a hike is still an "open question" on timing since real incomes are being squeezed by subdued wage growth and imported inflation on sterling weakness. The CBI industrial order expectations index fell from 7 to -2 instead of improving to 9, hinting at weaker business conditions down the line.

CHF

The franc was able to regain its bearings later in the day when risk aversion peeked back in the markets. There were no reports out of the Swiss economy yesterday and none are due today, so the franc could take its cue from euro zone data or overall market sentiment once more.

JPY

The yen gapped down over the weekend then filled this gap later in the day as risk-off flows returned. There were no reports out of Japan yesterday but the aftermath of Abe's victory weighed on the currency in anticipation of another tax hike in 2019 and a continuation of the BOJ's easy monetary policy. Today has the flash manufacturing PMI lined up and a gain from 52.9 to 53.1 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent gains to their lower-yielding counterparts when risk-taking took a step back in the latter sessions. Canadian wholesale sales rose 0.5% versus the projected 1.1% gain while Australia's leading index chalked up a 0.1% uptick, lower than the previous 0.2% increase. There are no major reports due from the comdoll economies today.

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Forex Major Currencies Outlook (Oct 25, 2017)

Postby katetrades » Wed Oct 25, 2017 3:43 am

USD

The US dollar tossed and turned as the lack of top-tier data left traders extra sensitive to updates from Washington. Fears that the Trump tax plan could lose votes from a couple of GOP Senators displeased with the US President dragged the currency down at the start of the session, but hints that Trump could pick Taylor as his next Fed Chief spurred gains. US flash services and manufacturing PMI readings from Markit also beat expectations while the Richmond manufacturing index disappointed. Durable goods orders data and new home sales are lined up next.

EUR

The euro was mostly stronger for the day as traders are starting to price in upbeat expectations for the ECB decision. PMI readings from Germany and France came in better than expected, with only the region's flash services PMI missing the mark. German Ifo business climate data is due next and no change from the 115.2 figure is eyed.

GBP

The pound was mostly weaker against its counterparts as traders focused on Brexit updates while there were no major reports out of the UK economy. Today has the preliminary GDP reading due and another 0.3% growth figure is expected, but downbeat results could undermine confidence that the UK can stay resilient throughout Brexit.

CHF

The franc held steady against most of its peers since there were no major reports out of the Swiss economy. Today has the UBS consumption indicator due and a gain from the earlier 1.53 figure could spur franc strength. The Credit Suisse Economic Expectations index is also lined up and an improvement over the earlier 28.0 reading could also provide a boost.

JPY

The yen was still in a weak spot against most of its counterparts while retracing from its drop against others. Japan's flash manufacturing PMI was weaker than expected as it fell from 52.9 to 52.5 instead of improving to 53.1. There are no reports due from Japan today so risk sentiment could stay in play or the currency could take its cue from bond yields.

Commodity Currencies (AUD, NZD, CAD)

The Aussie tumbled sharply upon seeing downbeat CPI readings, with the headline figure at 0.6% versus 0.8% and the core reading at 0.4% versus 0.5%. Canada's monetary policy statement is due next and no rate changes are eyed. Instead traders are likely reading between the lines to gauge if another hike is in the cards before the end of the year. New Zealand's trade deficit is due in the next Asian session and a smaller deficit of 900 million NZD is expected.

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Forex Major Currencies Outlook (Oct 26, 2017)

Postby katetrades » Thu Oct 26, 2017 5:34 am

USD

The US dollar was mostly supported by stronger than expected housing data, along with strong contributions from durable goods orders. However, uncertainties surrounding the Trump tax plan and the next Fed head are keeping the dollar's gains in check. Only medium-tier reports like the goods trde balance, preliminary wholesale inventories, and pending home sales are due next.

EUR

The euro was able to hold its ground against most of its peers, except against the British pound. German Ifo business climate data was stronger than expected as the reading rose from 115.3 to 116.7 instead of dipping to 115.2. Traders are sitting tight ahead of today's ECB decision as the central bank is widely expected to announce the size of its taper.

GBP

The pound got a strong boost from better than expected Q3 preliminary GDP. The economy expanded 0.4% during the quarter, a notch higher than the estimated and previous 0.3% growth figure. Only the CBI realized sales index is due today and a fall from 42 to 14 is expected, possibly hinting at weaker business conditions down the line.

CHF

The franc regained ground against most of its rivals, except for the British pound. Data from Switzerland showed improvements as the UBS consumption indicator rose from 1.50 to 1.56 while the Credit Suisse Economic Expectations index climbed from 28.0 to 32.0. There are no reports due from Switzerland today so the currency could be sensitive to the ECB decision and its impact on EUR/CHF.

JPY

The yen recovered against most of its peers, except the pound. There were no major reports out of Japan but uncertainties looming over the dollar rendered the yen as the preferred safe-haven currency for the day. There are still no major reports due today so traders could be sensitive to market sentiment in trading yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was dragged lower by the BOC's less hawkish tone during their rate statement. The central bank kept rates unchanged at 1.00% as expected but mentioned inflation concerns and the Loonie strength one too many times even in the presser. BOC head Poloz and policymaker Wilkins also noted the uncertainties stemming from NAFTA renegotiations. New Zealand printed a larger than expected trade deficit at 1143 million NZD versus the estimated 900 million NZD shortfall.

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Forex Major Currencies Outlook (Oct 27, 2017)

Postby katetrades » Fri Oct 27, 2017 3:46 am

USD

The dollar has gotten a boost from news that the House passed a budget resolution to allow the tax bill to clear Senate without achieving a supermajority. US advance GDP data for Q3 is due next and hopes are running high after the durable goods orders report suggested a stronger contribution from the business sector for the period. Analysts are expecting to see a 2.6% growth figure, slower than the earlier 3.1% expansion. News on Trump's Fed Chair pick could also lead to big moves for the dollar.

EUR

The euro suffered a strong selloff during the ECB decision, which was seen as a dovish taper. The ECB plans to maintain its 60 billion EUR monthly asset purchase program until the end of the year then tapering it down to 30 billion EUR per month from January to September 2018 or beyond if necessary. Draghi admitted that the decision was not unanimous and that inflation has not been encouraging but expressed optimism that growth could continue. Data on German import prices is due next.

GBP

The pound commiserated with the euro after the ECB announcement as this also sparked concerns that the upcoming BOE decision might not be so hawkish. Besides, the CBI realized sales index posted a surprise tumble from 42 to -36 versus the estimated dip to 14. This signals that business conditions aren't looking too good, following the disappointment in the CBI industrial order expectations index earlier in the week. There are no reports due from the UK economy today.

CHF

The franc gave up ground to some of its peers as EUR/CHF did not rally strongly after the ECB decision, keeping traders wary of future intervention by the SNB. There were no reports from Switzerland yesterday and none are due today so market sentiment could push franc pairs around.

JPY

The yen lost ground to the dollar but managed to advance against most of its rivals. Data from Japan has been slightly better than expected, with the Tokyo core CPI beating expectations with a 0.6% uptick versus the projected 0.5% gain. The national core CPI came in at 0.7% as expected. There are no other reports lined up from Japan so the yen might take its cue from bond yields, sentiment, and dollar demand.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker, except against the euro, as the gang is not likely to see any rate hikes from their respective central banks anytime soon. In Australia, quarterly PPI disappointed with a meager 0.2% uptick versus the estimated 0.4% gain. There are no other reports due from the comdoll economies next so market sentiment could take control.

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Forex Major Currencies Outlook (Nov 6, 2017)

Postby katetrades » Mon Nov 06, 2017 4:46 am

USD

The US dollar dipped upon seeing downbeat NFP results but recovered before the week closed. Employment rose by 261K in October versus the estimated 312K gain, but the earlier figure was upgraded from -33K to +18K. The unemployment rate fell from 4.2% to 4.1% while the ISM non-manufacturing PMI improved to 60.1. There are no major reports due from the US today but FOMC member Dudley has a speech lined up.

EUR

The euro gave back most of its recent gains as traders likely booked profits during the market holidays. German factory orders data is due next and a 1.0% decline is eyed, following the earlier 3.6% increase. The Sentix investor confidence index is also lined up and an improvement from 29.7 to 31.2 is expected.

GBP

The pound was in recovery mode on Friday when the services PMI beat expectations. The reading rose from 53.6 to 55.6 versus the consensus at 53.3. BOE Governor Carney's remarks on how Brexit could limit the central bank's ability to cut rates also kept the currency supported. There are no major reports due from the UK economy today.

CHF

The franc had a mixed run as the lack of top-tier data from Switzerland left the currency sensitive to country-specific events and market sentiment. Swiss CPI is due today and analysts are expecting to see a 0.1% uptick in price levels, following the earlier 0.2% gain.

JPY
The yen also had a mixed run as it reacted mostly to currency-specific factors. Japanese banks were closed on Friday for the holiday and there are no major reports due from Japan today. This signals that the currency could take its cue from sentiment and its counterparts once more.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was one of the weakest performers at the end of the week as it continued sliding against most of its peers. Australian retail sales came in flat instead of posting the estimated 0.4% uptick. In Canada, employment rose by 35.3K versus the estimated 15.3K increase and earlier 10K gain. New Zealand's quarterly inflation expectations fell from 2.1% to 2.0% and Canada's Ivey PMI is due next.

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Forex Major Currencies Outlook (Nov 07, 2017)

Postby katetrades » Tue Nov 07, 2017 5:20 am

USD

The dollar was off to a good start but gave up its gains during the latter part of the London session and throughout the US session after FOMC member Dudley confirmed his retirement plans. He is one of the more hawkish members of the Fed so the change could weigh on rate hike odds next year. Newly-appointed member Quarles is set to give a testimony today and traders are eager to find out about his policy biases. Fed Chair Yellen also has a speech due and US consumer credit data will be released.

EUR

The euro was in a weak spot against most of its peers as final services PMI readings turned out weaker than expected. On a less downbeat note, the Sentix investor confidence index improved from 29.7 to 34.0 versus the consensus at 31.2. Euro zone retail PMI and retail sales are due today, after Governor Draghi gives a testimony that is expected to shed more light on future central bank action. German industrial production data is also due.

GBP

The pound was one of the better-performing currencies for the day even though there were no major UK reports released. Earlier today, the UK BRC retail sales monitor showed a 1.0% slide versus the previous 1.9% gain, signaling weakness in domestic spending owing to inflation. The Halifax HPI is due next and a 0.2% uptick is eyed, slower than the earlier 0.8% gain.

CHF

The franc had a mixed run as the currency simply reacted to its counterparts. Swiss CPI came in line with expectations of a 0.1% uptick and traders are looking to SNB head Jordan's testimony next. SNB foreign currency reserves data is also due and a huge gain over the previous 724 billion CHF level could signal intervention.

JPY

The yen weakened to most of its peers, except against the euro and the dollar. BOJ minutes and Governor Kuroda's speech sent dovish vibes on a continuation of the central bank's easy monetary policy. Earlier today, Japan's average cash earnings figure came in better than expected at 0.9% versus 0.6% and the earlier 0.7% figure. 

Commodity Currencies (AUD, NZD, CAD)

The Loonie drew a bit more support from rising crude oil prices amid the political purge in Saudi Arabia. Data also turned out better than expected as the Ivey PMI rose from 59.6 to 63.8 versus the consensus at 60.2. The RBA decision is coming up next and no changes to the 1.50% interest rates are eyed but traders are keen to find out if there was any shift in the central bank's bias. BOC Governor Poloz has a speech coming up and New Zealand will have its GDT auction next.

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