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Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Nov 08, 2017)

Postby katetrades » Wed Nov 08, 2017 5:43 am

USD

The US dollar took some hits during the New York session when rumors swirled that Senate would impose a one-year delay before implementing tax cuts. Medium-tier reports such as consumer credit and JOLTS job openings data turned out stronger than expected. There are no major reports lined up from the US today so the focus could remain on tax reform.

EUR

The euro had a mixed run as reports also came in mixed. German industrial production sank 1.6% versus the estimated 0.7% drop while the region's retail sales report printed a stronger than expected 0.7% gain. Only the French trade balance is lined up from the euro zone today.

GBP

The pound struggled to hold on to most of its gains as medium-tier reports barely provided support. The UK BRC retail sales monitor fell by 1.0% versus the earlier 1.9% gain while the Halifax HPI posted a stronger than expected 0.3% increase. There are no major reports due from the UK today.

CHF

The franc rallied upon seeing a small gain in SNB foreign currency reserves that wasn't enough to spook intervention fears. The reading climbed from 724B CHF to 742B CHF. There are no reports due from the Swiss economy today so the franc could take its cue from market sentiment and counter currency action.

JPY

The yen was able to gain a bit of ground when the dollar weakened in the latter trading sessions. It also helped that Japan's average cash earnings figure came in stronger than expected at 0.9% versus 0.6%. Only the Japanese leading indicators is due today and a small dip is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Loonie had an active trading session but was able to end positive as Poloz did not sound too dovish in his testimony. While he warned of weak wage growth due to slack in the labor market, he also expressed openness to the idea of seeing inflation overshoot their target. Meanwhile, the Kiwi dipped upon seeing another drop in dairy prices during the GDT auction. The RBNZ decision is due next.

By Kate Curtis from Trader's Way
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Forex Major Currencies Outlook (Nov 09, 2017)

Postby katetrades » Thu Nov 09, 2017 6:20 am

USD

The US dollar rallied then reversed as traders have been paying extra close attention to tax reform updates. Senators are gearing up to unveil their version of the tax bill today while Congress will vote on theirs next week. There have also been rumors that Senate might impose a one-year delay before implementing tax cuts. Only the initial jobless claims and final wholesale inventories data are due today, so the focus could still be on tax reform.

EUR

The euro weakened to the commodity currencies but managed to regain ground against the yen and pound. Only the French trade balance was released from the region and the actual figure came in line with expectations, leaving the shared currency reactive to its counterparts instead. German trade balance and EU economic forecasts are up for release today, but these aren't highly expected to cause huge swings for the euro.

GBP

The pound was one of the weakest performers for the day as fresh Brexit jitters popped up. There has been waning support for PM May's government and it doesn't help that the EU is suggesting pushing back future negotiations until unresolved major issues regarding citizen's rights in the post-Brexit period are settled. There were no major reports out of the UK yesterday and none are due today, so the focus could remain on Brexit uncertainties.

CHF

The franc slid mostly lower against its peers as risk-taking was in play. There were no major reports out of the Swiss economy yesterday while today has a speech by SNB head Jordan. Jawboning could be part of his testimony as usual but expressing less concern about franc strength could allow the currency to rebound.

JPY

The yen had a mixed run as it mostly reacted to country-specific factors. Data turned out weaker than expected as core machinery orders sank by 8.1% instead of just by 1.8% while the current account surplus was smaller than expected at 1.84T JPY. The Economy Watchers Sentiment index is due next and a fall from 51.3 to 50.7 is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi got its wings back when the RBNZ kept rates on hold as expected while adjusting its forecast for hitting the inflation target earlier. This also meant an adjustment to their OCR interest rate forecasts. Acting Governor Spencer also assured that government changes would have little effect on economic conditions. Chinese CPI readings turned out better than expected, which is also supporting the Kiwi at the moment, while US crude oil inventories rose by 2.2 million barrels instead of falling by 2.5 million.

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Forex Major Currencies Outlook (Nov 15, 2017)

Postby katetrades » Wed Nov 15, 2017 5:03 am

USD

The US dollar gave up ground to most of its rivals once more as fresh setbacks to tax reform loomed. Senator Paul Rand shared plans to abolish an Obamacare provision tied to tax legislation and this could mean more complications when it comes to working with the House version, which is scheduled to be voted on this week. US PPI came in stronger than expected with 0.4% gains for both headline and core figures. CPI and retail sales are due today and strong data could still be upstaged by tax reform updates.

EUR

The euro was the strongest performer as it raked in gains across the board on upbeat GDP data. The German economy grew 0.8% versus the projected 0.6% expansion while Italy's GDP came in line with estimates at 0.5%. The region's growth figure landed at 0.6% as expected. French final CPI and the region's trade balance are lined up next.

GBP

The pound dipped upon seeing weaker than expected UK inflation data. Headline CPI came in weaker than expected for October as the reading held steady at 3.0% instead of improving to the estimated 3.1% figure. Core CPI was also unchanged at 2.7% instead of rising to 2.8%. The claimant count change and the average earnings index are lined up next, with the latter expected to fall from 2.2% to 2.1%.

CHF

The franc also advanced against most of its peers as PPI beat expectations. Producer prices rose 0.5% versus the projected 0.2% uptick to signal stronger inflationary pressures down the line. There are no reports due from the Swiss economy today so market sentiment could push franc pairs around.

JPY

The Japanese yen advanced to the dollar and comdolls but was weaker against the European currencies. Japan's economy expanded by 0.3% in Q3 versus the projected 0.4% growth figure and the earlier 0.6% GDP reading. The GDP price index posted a 0.1% uptick as expected and the revised industrial production figure is due next.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was the weakest of the bunch as it got dragged lower by downbeat Chinese data and weak wage growth. Fixed asset investment, industrial production, and retail sales from China came in below consensus, signaling weaker demand for commodities. The quarterly wage price index came in at 0.5% versus 0.7%. US crude oil inventories data is due next.

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Forex Major Currencies Outlook (Nov 16, 2017)

Postby katetrades » Thu Nov 16, 2017 5:33 am

USD

Dollar pairs are treading carefully as traders are waiting for more updates on tax reform and the House vote this week. Data came in mixed, with headline and core CPI up 0.1% and 0.2%, respectively. Headline retail sales rose 0.2% instead of printing a flat reading while the core version of the report showed a 0.1% uptick. Initial jobless claims, import prices, industrial production, and the Philly Fed index are due today.

EUR

The euro retreated from its strong climb earlier in the week despite stronger than expected data. The region's trade balance turned out stronger than expected at a surplus of 25 billion EUR versus the estimated 21.2 billion EUR reading. Final CPI readings are due today and no revisions to the 1.4% and 0.9% estimates for the headline and core figures are expected.

GBP

The pound regained some ground upon seeing mostly stronger than expected jobs data. Claimant count rose by 1.1K versus the projected 2K increase in joblessness while the average earnings index came in at 2.2% versus the estimated 2.1% increase. The previous reading also enjoyed an upgrade to 2.3% to reflect stronger wage growth than initially reported. UK retail sales data is due today and a 0.1% uptick is eyed.

CHF

The franc continued to advance against most of its peers as it raked in safe-haven gains away from the dollar. There were no reports out of the Swiss economy yesterday but the previous ones have been mostly stronger than expected, easing fears of SNB intervention. There are still no reports due from Switzerland today so franc pairs could take their cues from market sentiment.

JPY

The yen also took advantage of dollar weakness and was able to get a boost from the upgraded industrial production figure. The reading was revised from a 1.1% decline to just 1.0% for September. There are no major reports due from Japan today so the yen could continue to wait for clues from the dollar or overall sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie was one of the weakest performers for the day as it was bogged down by weak wage growth. Earlier today, Australia's jobs figures turned out weaker than expected as the economy added only 3.7K jobs in October versus the projected 17.8K gain. However, the previous reading was upgraded while the unemployment rate ticked lower. Falling oil prices on rising inventories weighed on the Loonie. New Zealand will release its quarterly PPI next and slower quarterly gains are eyed.

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Forex Major Currencies Outlook (Nov 17, 2017)

Postby katetrades » Fri Nov 17, 2017 6:42 am

USD

The US dollar drew some support from news that Congress has been able to pass the tax bill in their vote this week. However, the currency quickly returned its wins as traders turned their attention to the challenges that lie ahead. For one, Senate has a very different version and it would take a while before both chambers come up with a unified one. Data turned out mixed, with industrial production and capacity utilization coming in better than expected. Import prices and the Philly Fed index, on the other hand, disappointed. Only building permits and housing starts are due today.

EUR

The euro retreated slightly against its peers as there were no major reports out and traders focused on the political uncertainty in Germany. Final CPI readings were unchanged at 1.4% for the headline figure and 0.9% for the core reading. ECB head Draghi has a speech today and Italy will release its trade balance, just after the release of the region's current account balance.

GBP

The pound got some support from stronger than expected UK retail sales. The report showed a 0.3% uptick versus the projected 0.1% gain. There are no reports due from the UK economy today so traders might be extra sensitive to Brexit updates.

CHF

The franc gave up some of its previous wins as risk-taking returned. There were no reports out of the Swiss economy then and the currency didn't draw any support from SNB member Maechler's speech. There are no reports due from the Swiss economy today so market sentiment is likely to stay in play.

JPY

The yen was also in a weak spot as risk appetite was present in the financial markets. There were also no reports out of Japan then and none are due today so risk sentiment could continue to push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar drew support from stronger than expected jobs data as the economy added only 3.7K jobs in October but saw a large upgrade in the earlier figure to 26.6K. Underlying data also showed that full-time hiring was actually strong but the gains were nearly wiped out by falling part-time hiring. Canadian CPI figures are due next and downbeat data could weigh on the Loonie. New Zealand's quarterly PPI readings came in below expectations at 0.1% gains for input and output prices.

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Forex Major Currencies Outlook (Nov 24, 2017)

Postby katetrades » Fri Nov 24, 2017 7:05 am

USD

The US dollar chalked up another losing day as market participants continued to adjust their positions to account for the Fed's less upbeat inflation outlook. There were no reports out of the US economy yesterday as markets were closed for the Thanksgiving holidays while today has the flash manufacturing and services PMIs due. Analysts are expecting to see improvements from both industries.

EUR

The euro advanced against most of its peers as PMI readings turned out mostly stronger than expected. Only the German flash services PMI disappointed but it still indicated an improvement from the earlier reading. The German Ifo business climate index is due today and a dip from 116.7 to 116.6 is expected.

GBP

The pound lagged behind most of its peers despite data coming in line with expectations. The second version of the GDP was unchanged at 0.4% while preliminary business investment showed a slightly weaker than expected 0.2% gain versus the projected 0.3% uptick. CBI realized sales jumped from -36 to +26 but an index of consumer confidence measured by YouGov slumped to its lowest post-Brexit level. High Street lending data is due next.

CHF

The franc was able to hold its ground even though SNB head Jordan stepped up to the podium. Instead of jawboning the franc like he usually does, he did have a couple of warnings on the high current account surplus. Although he clarified that this doesn't necessarily relate to currency movements, franc bulls seemed more comfortable buying up the currency afterwards.

JPY

The yen took advantage of dollar weakness once more but at a slightly slower pace as risk appetite was present. Japan's flash manufacturing PMI also turned out stronger than expected at 53.8 versus 52.6. There are no reports due from Japan today so the yen could take its cue from market sentiment.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi enjoyed some support during the risk-on sessions but the Kiwi gave up some ground upon seeing downbeat trade balance data. The deficit narrowed to 871 million NZD but was still larger than the projected 750 million NZD figure. The Loonie was bogged down by weaker than expected retail sales figures, preventing it from enjoying crude oil rallies. There are no other reports due from the comdoll economies for the rest of the day.

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Forex Major Currencies Outlook ( Nov 27, 2017)

Postby TradersWay » Mon Nov 27, 2017 3:44 am

USD

The US dollar had a rough run during the Thanksgiving holidays as traders continued to adjust positions on account of the less upbeat outlook on inflation shared by Yellen and most of the FOMC members. Flash manufacturing and services PMIs also fell short of consensus. New home sales and speeches by members Kashkari and Dudley are on today's docket.

EUR

The euro held on to most of its wins thanks to another set of upbeat data. The German Ifo business climate index ticked higher from 116.8 to 117.5 to reflect better optimism, which could then translate to stronger performance. There are no reports due from the region today.

GBP

The pound was able to chalk up some gains towards the end of the week but traders still seem wary of Brexit risks. High Street lending ticked lower from 41.6K to 40.5K versus the estimated 40.9K figure. MPC member Haldane has a speech scheduled today.

CHF

The franc continued to rake in gains against most of its peers as traders dumped the dollar and moved to other safe-haven holdings. There were no reports out of Switzerland but the improving sentiment in the euro region appeared to benefit the currency as well. There are still no reports lined up today, so the Swiss currency could take its cue from market sentiment and euro price action.

JPY

The yen weakened towards the end of the previous week as profit-taking seemed to be in play. However, the Japanese currency is off to a strong start this week as it ticked higher across the board. There are no major reports lined up from Japan but bond yields and market sentiment could still yield big moves for yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to advance against the dollar and yen towards the end of the previous week but appear to be off to a rocky start this week. There were no reports out of their economies then and none are lined up today, so market sentiment could be in the driver's seat. Pricing in ahead of the OPEC meeting could come into play, though.

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Forex Major Currencies Outlook (Nov 28, 2017)

Postby katetrades » Tue Nov 28, 2017 6:54 am

USD

The US dollar was off to a rocky start as North Korean jitters and some dovish remarks from FOMC member Kashkari weighed on the currency. However, it drew support from stronger than expected new home sales at 685K versus expectations at 627K, remarks from incoming Fed head Powell suggesting a continuation of the central bank's tightening pace, and Trump's tweet on tax reform. The CB consumer confidence index is up for release today, along with Powell's actual speech and a testimony by Treasury Secretary Mnuchin.

EUR

The euro was able to hold on to most of its gains as signs point to a coalition being formed in Germany. There were no reports out of the euro zone then, allowing traders to price in expectations for the data points in the next few days. Today has German import prices and the GfK consumer confidence index lined up.

GBP

The pound had a mixed run as it slid to the dollar and yen but managed to hold steady versus the comdolls. There were no major reports out of the UK economy other than BOE member Haldane's speech and today has the BOE Financial Stability Report due. Bank stress test results could incorporate Brexit risks but could still reassure market watchers that the UK financial sector might stay resilient.

CHF

The franc raked in a few gains against its rivals even though there were no reports out of the Swiss economy yesterday. Today has an empty docket as well, leaving the Swiss currency to take its cue from market sentiment or euro price action.

JPY

The yen caught pips against most of its rivals in recent session as traders still appeared hesitant to buy the dollar. There were no major reports out of Japan then and none are due today so market sentiment and global bond yields could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was the weakest of the bunch as news of the Keystone Pipeline reopening this week led to a drop in crude oil. This drove expectations of higher supply in the US, possibly making up for the previous draws. Traders also seem more cautious ahead of the OPEC meeting as Russia's participation in the deal could determine the market reaction. The Kiwi has been able to benefit from short-covering but is facing risks from the release of the RBNZ Financial Stability Report.

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Forex Major Currencies Outlook (Nov 29, 2017)

Postby katetrades » Wed Nov 29, 2017 5:08 am

USD

The US dollar was able to rake in gains versus most of its counterparts on strong data and Powell's confirmation as next Fed head. The US goods trade deficit widened but the Richmond manufacturing index and CB consumer confidence index both beat expectations. Today has the preliminary GDP due and an upgrade from 3.0% to 3.3% is eyed. Traders are also keeping their hopes up for progress on Senate's tax reform bill vote.

EUR

The euro dipped against some of its peers as Germany's GfK consumer climate index failed to impress. However, the German import prices report noted a stronger than expected 0.6% gain that could be positive for overall inflation. Today has the German preliminary CPI and French preliminary GDP, along with the Spanish flash CPI.

GBP

The pound had one of its more volatile days as rumors swirled that the UK and EU already reached a deal on the Brexit bill. Some government officials denied this but bulls still appear hopeful that progress could be made before the next set of official meetings. The BOE bank stress test results have also been mostly positive but wary of Brexit risks. Today has net lending to individuals and mortgage approvals due.

CHF

The franc had a mixed run as it mostly reacted to currency-specific factors. There were no reports out of the Swiss economy then while today has the UBS consumption indicator and Credit Suisse economic expectations index on tap. Stronger than expected reports could continue to give the franc support.

JPY

The yen weakened against some of its counterparts on news of another ICBM test from North Korea that landed off the coast of Japan. Japanese retail sales also fell short of estimates as it posted a 0.2% drop instead of the estimated 0.1% uptick. There are no reports due from Japan today as traders stay on edge on North Korea tensions.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was still in a weak spot as the API reported a small build in stockpiles while the BOC seemed to ease off its tightening bias. The OPEC meetings are starting today and traders are on the lookout for clues on how the output deal extension might go and if non-OPEC countries like Russia might join in. EIA crude oil inventories data is due next and a small build is also eyed.

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Forex Major Currencies Outlook (Nov 30, 2017)

Postby katetrades » Thu Nov 30, 2017 7:21 am

USD

The US dollar caught a few gains against most of its counterparts as the US GDP was upgraded, Yellen sounded upbeat in her testimony, and the Senate version of the tax bill cleared a hurdle. However, there are still several risks that remain, including the full vote that the Senate might have on the tax bill this week. The core PCE price index is also due today and a weak result could remind traders of the cautious inflation outlook in the FOMC. Initial jobless claims, Chicago PMI, and speeches from FOMC members Quarles and Kaplan are lined up.

EUR

The euro managed to hold on to most of its gains despite warnings from the ECB Financial Review on risks associated with a stronger euro and higher interest rates. German retail sales and unemployment rate are due today, along with French and Italian preliminary CPI. However, traders might pay closer attention to euro zone CPI flash estimates as strong gains could renew expectations for an ECB hike next year. The headline reading is projected to climb from 1.4% to 1.6% while the core figure could rise from 0.9% to 1.0%.

GBP

The pound continued to advance across the board on improving Brexit sentiment as negotiating parties seem more amenable to a compromise. Data also turned out upbeat while today has only the Nationwide HPI on tap. With that, the attention could still be on Brexit as traders weigh the odds ahead of the next official meeting on December 4.

CHF

The franc also chalked up strong gains across the board as medium-tier reports turned out stronger than expected. The UBS consumption indicator improved from 1.51 to 1.54 while the Credit Suisse economic expectations index rose from 32.0 to 40.7. Swiss GDP is due today and a higher growth figure of 0.6% is expected versus the earlier 0.3% uptick.

JPY

The yen was on weak footing as traders stayed wary of risks from North Korea. The rise in US bond yields also drew traders away from the lower-yielding yen. Japan's preliminary industrial production report turned out weaker than expected with a 0.5% uptick versus the estimated 1.9% gain. Housing starts data is due next.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was still in a weak spot despite a larger than expected draw of 3.4 million barrels in stockpiles reported by the EIA. Traders appear to be positioning for a large build later on as the Keystone Pipeline resumed operations this week. There are also jitters surrounding the OPEC meeting as Russia could push for a review of the output deal extension by June. Data from Australia came in mixed but the currency appeared to draw support from better than expected Chinese official PMI readings.

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