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Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Jan 19, 2018)

Postby katetrades » Fri Jan 19, 2018 4:37 am

USD

The dollar lost ground to its peers once more as the threat of a government shutdown weighed on investor sentiment. Data also turned out mostly weaker than expected, with housing starts posing a huge drop from 1.30M to 1.19M as the weather-related demand was not sustained. Preliminary UoM consumer sentiment data and inflation expectations are due next, but the focus could be on the funding bill.

EUR

The euro gave up ground once more when the likelihood of a German coalition dropped. There were also no major reports out of the region and today only has the current account balance on tap, which suggests that political updates could determine the shared currency's direction. Failure by Merkel to strike a coalition could be bearish for the euro.

GBP

The pound held its ground against most of its counterparts despite the lack of top-tier data from the UK. Today has the retail sales report due and a 0.8% decline is eyed, erasing part of the earlier 1.1% increase. Stronger than expected data, however, could prove bullish for the pound.

CHF

The franc was the main beneficiary of risk-off action and dollar weakness, as well as the selloff in the euro. There were no major reports out of the Swiss economy then and none are due today, so sentiment could continue to push franc pairs around.

JPY

The yen also took advantage of dollar weakness but was slightly weaker to the commodity currencies. Japan's industrial production reading was revised down from 0.6% to 0.5% and there are no reports due today, leaving sentiment and bond yields as potential drivers for yen price action.

Commodity Currencies (AUD, NZD, CAD)

The Aussie drew some support from better then expected jobs data but gave up some of its gains when China's data failed to impress. Most of the readings came in line with estimates, as fixed asset investment was unchanged at 7.2% instead of falling to 7.1% while industrial production ticked slightly higher. Canadian manufacturing sales is lined up next.

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Forex Major Currencies Outlook (Jan 22, 2018)

Postby katetrades » Mon Jan 22, 2018 2:21 am

USD

The dollar is on weaker footing owing to the US government shutdown, which threatens to drag equities and bonds while it lasts. There are no major reports lined up for today and futures are pointing to a weak open for US markets as the dollar has also gapped down over the weekend.

EUR

The euro had a stronger open as German coalition talks had positive updates over the weekend. As it turned out, SPD is backing talks with Merkel but no agreement has been struck yet. Still, these could push the shared currency around over the next few days before euro zone PMIs and the ECB decision take the spotlight.

GBP

The pound held on to most of its gains from the previous week despite the 1.5% slump in retail sales and is eyeing the UK preliminary GDP report this week. Another major report lined up is the claimant count change and average earnings index, which would provide some clues on inflation and consumer spending. There are no major releases from the UK today.

CHF

The franc has been able to take advantage of dollar weakness despite the lack of top-tier data from Switzerland. SNB officials have been mum about currency intervention, so traders don't appear too wary of sudden shocks. There are still no reports due today so sentiment could keep pushing franc pairs around.

JPY

The yen has been supported thanks to dollar weakness but is behind overall to higher-yielding currencies as risk-taking is present. The BOJ decision is coming up tomorrow and yen traders might be looking to liquidate some of their positions ahead of an event risk.

Commodity Currencies (AUD, NZD, CAD)

Comdolls have held their ground and continued to advance to the dollar as China's data still showed promise. Canadian wholesale sales data is due today and a 1.0% gain is eyed. Retail sales and CPI figures are lined up throughout the week and might influence BOC hike expectations as the central bank sounded optimistic in last week's announcement.

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Forex Major Currencies Outlook (Jan 23, 2018)

Postby katetrades » Tue Jan 23, 2018 5:40 am

USD

The US dollar caught a bid on reports that Congress passed another temporary funding measure to reopen the government. However, the lower-yielding currency barely held on to its gains as risk appetite took over. Only the Richmond manufacturing index is due today and a dip from 20 to 19 is eyed.

EUR

The euro was able to stand its ground as the SPD agreed to start coalition talks with Merkel's party. There were no reports from the euro zone on Monday's London session while today has the ZEW economic sentiment report. Germany could show a gain from 17.4 to 17.8 in its reading while the region could see a rise from 29.0 to 29.7.

GBP

The pound also carried on with its climb despite the lack of top-tier data as the government continued to make progress in its Brexit transition plans. UK public sector borrowing data is due next and a fall from 8.1 billion GBP to 4.2 billion GBP is eyed. The CBI industrial order expectations index is also due  and a drop from 17 to 13 is expected.

CHF

The franc gave up some ground after SNB head Jordan mentioned that the currency is still overvalued despite the recent drop. Another SNB official Weber contended that the currency is highly valued but moving in the right direction. Apart from that, risk-taking has weighed on the Swiss currency as well. There are no reports due from Switzerland today.

JPY

The yen is on edge ahead of the BOJ decision as some expect the central bank to take a more upbeat tune after their adjustment on long-term bond purchases earlier this month. However, BOJ head Kuroda has also previously reiterated their commitment to their aggressive easing program. In any case, yen pairs are expecting additional volatility during the announcement and presser.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were big winners for the day thanks to risk-taking. The Aussie and Kiwi have already been on a tear for the most part of the day on upgraded growth forecasts by the IMF while the Loonie trailed behind as NAFTA concerns and a fall in crude oil lingered. Canadian wholesale sales also came in weaker than expected with a 0.7% gain versus the projected 1.0% uptick. There are no reports due from the comdoll economies today.

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Forex Major Currencies Outlook (Jan 24, 2018)

Postby katetrades » Wed Jan 24, 2018 9:49 am

USD

The US dollar was the weakest currency for yet another day as risk-taking and weak data dragged it down. Safe-haven flows also moved to the Japanese yen and Swiss franc instead. The Richmond manufacturing index slumped from 20 to 14 versus the consensus at 19. Flash manufacturing and services PMI are due next, along with existing home sales data.

EUR

The euro had a mixed run as it advanced to the dollar but weakened to the pound and comdolls. Data turned out stronger than expected as the ZEW readings from both Germany and the entire region beat estimates. Flash manufacturing and services PMIs are due next, and small dips are eyed. Updates on the German coalition talks should continue to influence the shared currency as well.

GBP

The pound was able to hold its ground on stronger than expected public sector net borrowing and CBI industrial order expectations data. UK jobs data is due next and a lower claimant count change of 2.3K is eyed compared to the previous month's 5.9K increase in joblessness. The average earnings index could hold steady at 2.5% while the unemployment rate could stay unchanged at 4.3%.

CHF

The franc took its share of safe-haven gains despite the lack of top-tier data from Swizterland. There are still major reports due from the Swiss economy today, so market sentiment could push franc pairs around.

JPY

The yen gained ground after the BOJ was slightly more hawkish than expected. Still, the central bank decided to keep rates and bond purchases at current levels. Apart from that, the lower-yielding Japanese currency took advantage of dollar weakness. The flash manufacturing PMI is due next.

Commodity Currencies (AUD, NZD, CAD)

The higher-yielding comdolls once again gained ground on risk rallies, with the Loonie drawing additional support from NAFTA developments. Key members of the negotiating groups acknowledged that some progress is being made, although Trump still seems prepared to walk away without a deal. EIA crude oil inventories data and New Zealand's quarterly CPI report are lined up next.

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Forex Major Currencies Outlook (Jan 25, 2018)

Postby katetrades » Thu Jan 25, 2018 4:55 am

USD

The dollar suffered yet another selloff after Treasury Secretary Mnuchin remarked in the Davos summit that a weaker dollar is good for trade. US data such as services PMI and existing home sales also turned out mostly weaker than expected, keeping traders doubtful about the Fed's tightening plans this year.  New home sales, initial jobless claims, and the goods trade balance are up for release today.

EUR

The euro continued to rake in gains despite fears of jawboning from ECB head Draghi during the policy statement later today. A handful of the PMI readings from Germany and France still posted upside surprises, keeping traders positive about the improvements in the region lasting for much longer. No actual rate changes are expected today but strong remarks against currency appreciation could mean losses for the shared currency.

GBP

The pound was the strongest currency for the day thanks mostly to Brexit developments and positive jobs figures. The claimant count was weaker than expected at 8.6K versus 2.3K, though, while the previous reading was revised to show a larger increase in joblessness. The average earnings index held steady at 2.5% as expected while the unemployment rate was also unchanged at 4.3%.

CHF

The franc also caught a bid in recent sessions as it took over the safe-haven flows from the yen and dollar. There were no major reports out of the Swiss economy yesterday while today has an empty schedule as well, leaving market sentiment to stay in play.

JPY

The Japanese yen had a mixed round as it gave up ground to the pound but managed to outpace its other rivals, particularly the dollar. Japan's flash manufacturing PMI improved from 54.0 to 54.4 versus the consensus at 54.3. Japanese CPI readings are up for release in tomorrow's Asian session and this could impact BOJ tapering expectations.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of dollar weakness but were slightly weaker to the yen and especially against the European currencies. New Zealand's quarterly CPI came in weaker than expected with a meager 0.1% uptick versus the estimated 0.4% gain or the earlier 0.5% increase. Canadian retail sales data are lined up next and the headline figure could show a 0.7% gain while the core reading might be up by another 0.8%.

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Forex Major Currencies Outlook (Jan 26, 2018)

Postby katetrades » Fri Jan 26, 2018 6:12 am

USD

The US dollar dollar drew some support in the New York session as US President Trump said that he sees the currency getting stronger and stronger. He also said that Treasury Secretary Mnuchin's remarks on a weaker dollar being good for trade as taken out of context. Data turned out mixed as the initial jobless claims rose from 216K to 233K but was better than the estimated 239K figure. New home sales sank from a downgraded 689K figure to 652K versus the estimated drop to 627K. Advance GDP data is due next and a 3.0% growth figure is eyed.

EUR

Volatility picked up for the euro after the ECB statement as the central bank kept policy unchanged as expected but Draghi had a few more insights to share. He cited that risks remain balanced and that uncertainty is stemming from possible changes in US policy. He also explained that the central bank is not targeting exchange rates. There are no major reports due from the euro zone today.

GBP

The pound was able to score some gains against its peers despite the lack of top-tier UK data. High Street lending sank from 39K to 36.1K while the CBI realized sales index fell from 20 to 12. The UK preliminary GDP reading is due today and analysts expect to see another 0.4% expansion for Q4 2017.

CHF

The franc continued its advance even though SNB head Jordan warned that they could intervene in the forex market to curb currency strength if necessary. So far it looks like the franc is still taking some of the safe-haven flows from the dollar. There were no reports out of the Swiss economy then and none are due today, so market sentiment could push franc pairs around.

JPY

The yen regained some ground after the release of the CPI and BOJ minutes. The national CPI held steady at 0.9% as expected but the Tokyo core CPI fell from 0.8% to 0.7%. Meanwhile the BOJ minutes didn't contain any surprises and even had a few upbeat remarks. Dollar demand and sentiment could push yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to hold their ground as risk-taking was in play but gave up some ground to the dollar when it surged. Canadian retail sales turned out mixed as the headline figure came in at 0.2% while the core figure showed a 1.6% gain versus the 0.8% consensus. Canada's CPI reports are due next.

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Forex Major Currencies Outlook ( Jan 29, 2018)

Postby katetrades » Mon Jan 29, 2018 3:11 am

USD

The dollar regained some ground towards the end of the previous week despite weaker than expected GDP. The advance reading for Q4 2017 came in at 2.6% versus the estimated 3.0% expansion. Goods trade balance also disappointed but durable goods orders and preliminary wholesale inventories beat expectations. Today has the core PCE spending and personal spending and income data due.

EUR

The euro gave up some more ground towards the end of the previous week as a few more officials remarked on the currency's strength. In particular ECB member Villeroy remarked that currency volatility has been a source of uncertainty. Only the German import prices report is due today while the rest of the week has mostly preliminary CPI and GDP data.

GBP

The pound was one of the strongest currencies ending the week as progress on the Brexit transition plans and stronger than expected preliminary GDP of 0.5% lifted the currency. Medium-tier reports such as net lending to individuals, mortgage approvals, and the BRC price shop index are lined up over the next few days before the release of UK manufacturing and construction PMI data later on.

CHF

The franc was able to hold on to its wins as the currency shrugged off intervention threats from SNB head Jordan. Dollar weakness also drove the lower-yielding franc higher as a safe-haven alternative. There are no reports due from Switzerland today so sentiment could push franc pairs around.

JPY

The yen regained some ground as the dollar resumed its slide towards the end of the week. Japan has its household spending, retail sales, and the unemployment rate due in the next Asian session. Strong data could reinforce calls for BOJ tapering, although market sentiment would likely remain the driver for yen price action.

Commodity Currencies (AUD, NZD, CAD)

Canada's CPI reports showed some improvement, keeping Loonie traders hopeful for another BOC hike soon. Baker Hughes reported an increase in oil rig counts, though, and this could mean more output and downside pressure on the commodity. New Zealand has its trade balance due in the next Asian session and a smaller deficit is eyed.

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Forex Major Currencies Outlook (Jan 30, 2018)

Postby katetrades » Tue Jan 30, 2018 4:57 am

USD

The US dollar staged a decent recovery during the New York session on revived expectations of Fed tightening. This was spurred by remarks from several central bank officials highlighting the shift to tightening mode across the globe. Economic data turned out mostly upbeat, with the core PCE price index rising from 0.1% to 0.2% and the personal income figure up by 0.4% versus the 0.3% forecast. Personal spending, however, fell short at 0.4% versus the 0.5% consensus. The CB consumer confidence index is due today.

EUR

The euro weakened against most of its counterparts on risk-off vibes for the most part of the European session and on remarks from an ECB official highlighting the shift to global tightening. German import prices came in line with estimates of a 0.3% uptick. German preliminary CPI, French consumer spending, Spanish flash GDP, and the region's flash GDP are all lined up today.

GBP

The pound was one of the weaker performers as infighting in PM May's party ahead of the announcement on the EU's negotiating stance in the Brexit transition. There were no reports out of the UK economy then while today has net lending to individuals and mortgage approvals data on tap.

CHF

The franc took advantage of risk-off flows during the European session as the euro was also in a weak spot. There were no reports out of the Swiss economy then while today has the trade balance and KOF economic barometer on the docket. A smaller surplus of 2.54 billion CHF is eyed while the KOF reading could dip from 111.3 to 110.9. 

JPY

The yen struggled to hold on to its recent gains as some of the risk-off flows returned to the dollar. Japanese data also turned out mostly weaker than expected as both household spending and unemployment rate missed forecasts, although the latter was due to higher labor force participation. Retail sales beat expectations with a 3.6% gain versus the estimated 2.1% increase.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up some ground to the dollar but stayed resilient to the European currencies. In Australia, the NAB business confidence index improved from 7 to 11 while New Zealand's trade balance switched to a surplus of 640 million NZD versus the estimated 125 million NZD shortfall on stronger exports. There are no reports due from the comdoll economies today.

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Forex Major Currencies Outlook (Jan 31, 2018)

Postby katetrades » Wed Jan 31, 2018 5:12 am

USD

The US dollar rallied and reversed on profit-taking towards the end of the month and ahead of the State of the Union address and FOMC statement. No actual policy changes are expected but traders will be keeping their eyes and ears peeled for clues on the pace of tightening this year. The ADP non-farm employment change figure is also due and analysts expect to see a 186K gain in hiring.

EUR

The euro had a mixed run as data also came in mixed. French flash GDP up by 0.6% versus the estimated 0.5% expansion. German preliminary CPI turned out below expectations with a 0.7% drop, though, lower than the estimated 0.5% dip. The region's flash GDP came in line with estimates of a 0.6% growth figure. German retail sales and preliminary CPI readings are due today and stronger than expected results could revive ECB hike forecasts.

GBP

The pound was able to regain ground on BOE Governor Carney's optimistic remarks. In his speech, he said that inflation could stay above target longer as the pass-through effects of a weaker pound are just being seen. He also cited that wages are up, the labor market is tight, and that productivity and investment could still pick up. There are no major reports from the UK today.

CHF

The franc continued to rake in gains against its peers on risk-off flows and hesitation to buy the dollar. The Swiss trade balance came in stronger than expected with a 2.63 billion CHF surplus versus the estimated 2.54 billion CHF figure. However, the KOF economic barometer disappointed with a fall from 111.4 to 106.9. The UBS consumption indicator and Credit Suisse economic expectations index are lined up today.

JPY

The yen also managed to chalk up some wins on risk-off flows and dollar weakness. Japan's preliminary industrial production report turned out stronger than expected with a 2.7% gain versus the estimated 1.5% increase and the earlier 0.5% uptick. Japanese consumer confidence index and housing starts are lined up next.

Commodity Currencies (AUD, NZD, CAD)

The Loonie managed to stand its ground despite another down day for oil prices due to the API buildup of 3.2 million barrels. In Australia, the headline CPI was slightly weaker than expected at 0.6% versus 0.7% while the trimmed mean CPI came in at 0.4% versus 0.5%. Canadian monthly GDP and underlying inflation data are due today.

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Forex Major Currencies Outlook (Feb 01, 2018)

Postby katetrades » Thu Feb 01, 2018 4:53 am

USD

The FOMC statement led to a bit of a boost for the dollar on stronger inflation expectations and the addition of the word "further" in projecting more tightening moves. Data also turned out mostly upbeat, with the ADP beating expectations for January even as the previous reading was downgraded. ISM manufacturing PMI is due today and a fall from 59.7 to 58.7 is expected.

EUR

The euro held its ground against most of its peers as CPI figures came in line with expectations. The headline estimate dipped from 1.4% to 1.3% while the core reading rose to 1.0%. Final manufacturing PMI readings are due from the region's top economies today.

GBP

The pound gave up some ground earlier in the day on reports that the EU might reject a trade proposal that would have little barriers for the UK in accessing the shared market. UK manufacturing PMI is due today and an uptick from 56.3 to 56.5 is eyed, with strong data likely boosting sterling once more.

CHF

The franc had a mixed run but was mostly in the green as it advanced to the yen, dollar, and commodity currencies. Swiss reports were weak, though, with both the UBS consumption indicator and Credit Suisse economic expectations index sliding lower. Swiss retail sales, manufacturing PMI, and SECO consumer climate figures are due next.

JPY

The yen was in a weak spot as risk appetite improved for the most part of the day and the dollar took back its share of safe-haven gains. Japan's final manufacturing PMI enjoyed an upgrade from 54.4 to 54.8 to reflect a stronger pace of expansion than initially reported. The bond auction is due next.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were in rally and reverse mode, particularly against the dollar. Data from Australia was mixed, with the CPI figures showing slight dips but business indicators stayed strong. China's manufacturing PMI also dipped slightly based on official data but the Caixin figure was unchanged. Crude oil managed to hold its ground despite the surprise build in EIA stockpiles as the OPEC showed strong compliance to its output deal. 

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