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Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (July 16, 2013)

Postby katetrades » Tue Jul 16, 2013 5:25 am

USD

The US dollar lost its legs in yesterday’s trading as it was weighed down by weaker than expected US retail sales. The headline figure posted a mere 0.4% uptick while the core version of the report showed a flat reading. This was lower than the estimated 0.7% increase in headline retail sales and the projected 0.5% growth in core retail sales. Apparently, US consumers cut back on purchases of gadgets and food while upping spending on automobiles and home furnishings. For today, the CPI figures are due and consumer price levels are expected to rise by 0.3% while core price levels could show another 0.2% increase.

EUR

EUR/USD was mostly stuck in consolidation for yesterday’s trading as there were no major reports released from the euro zone. German and euro zone ZEW figures are due today and small improvements are expected. German ZEW economic sentiment could climb from 38.5 to 39.8 while the region’s figure is slated to rise from 30.6 to 31.8, reflecting a rise in optimism.

GBP

The pound was off to a weak start in the Asian session but soon found support at the 1.5050 minor psychological level before rebounding back to the 1.5100 area. There were no economic reports released from the UK, as the country is set to print its CPI figures today. Annual inflation is set to climb from 2.7% to 3.0%, way above the central bank’s 2% inflation target. This should mean that the BOE would have less scope for monetary policy easing, which might be positive for the pound in the near term.

CHF

The Swiss PPI report fell below expectations as it showed a mere 0.1% uptick in producer price levels. However, the franc still managed to hold on to its recent gains against the dollar, as USD/CHF stayed around the .9500 handle. There are no major reports from Switzerland today, which suggests that USD/CHF action could be mostly dependent on US data.

JPY

Even though Japanese traders were on a holiday yesterday, the yen managed to score gains against the US dollar mostly during the New York session. There are no reports due from Japan again today, which suggests that the movement of yen pairs could be dependent on currency-specific data.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar was bogged down by weaker than expected Chinese GDP in yesterday’s Asian session, as the country grew by only 7.5% for the second quarter. Meanwhile, quarterly inflation in New Zealand also disappointed, as the figure showed a mere 0.2% uptick instead of the estimated 0.3% rise. Canadian manufacturing sales are on tap for today and a 0.7% rebound is eyed to follow the 2.4% drop recorded previously.

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Forex Major Currencies Outlook (July 17, 2013)

Postby katetrades » Wed Jul 17, 2013 6:48 am

USD

The US dollar had a mixed performance yesterday, as it lost ground to some counterparts but managed to advance against others. US CPI was mostly in line with expectations, as the core figure printed the estimated 0.2% uptick while the headline CPI showed a higher than expected 0.5% increase. Industrial production was better than expected at 0.3% while capacity utilization came in line with consensus at 77.8%. US building permits and housing starts are due today but the bigger market mover could be Fed head Bernanke’s speech, as the Chairman is expected to set the record straight regarding the stimulus taper plan.

EUR

EUR/USD broke to the upside in yesterday’s trading, as the pair landed back above the 1.3100 handle. Data from the euro zone was mixed, as the German ZEW disappointed while the euro zone ZEW was better than expected. The German ZEW figure dipped from 38.5 to 36.3 while the euro zone ZEW reading climbed from 30.6 to 32.8. Only the German bond auction is scheduled for the euro zone today.

GBP

The pound had a choppy trading day, as the UK CPI release did very little to provide direction for pound pairs. The actual figure fell a little short of consensus at 2.9%, higher than the previous 2.7% reading. For today, the claimant count change is up for release and it is slated to show a 7.5K decline in unemployment claimants for June. Also due today is the MPC votes for asset purchases and interest rates, and it would be interesting to see how Carney voted in this meeting.

CHF

No reports released from Switzerland yesterday yet the franc still managed to post some gains against the US dollar. For today, the Swiss ZEW economic expectations report is due and it is expected to show an improvement from the previous 2.2 reading.

JPY

The yen gained against the dollar but lost ground to the pound in yesterday’s trading. EUR/JPY managed to stay stuck in consolidation though. Only the monetary policy meeting minutes were released from Japan and it revealed that BOJ policymakers are starting to see some notable improvements in the Japanese economy. There are no reports due from Japan for the next 24 hours, which suggests that the movement of yen pairs could depend on currency-specific events.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar got a strong boost from the RBA minutes, which showed that the central bank is happy that the Aussie depreciation is contributing positively to economic activity. Only medium-tier business sentiment data is due from Australia in the coming trading hours while Canada is set for the BOC interest rate decision. This is Poloz’s first rate statement so it should be indicative of how monetary policy will fare in the future.

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Forex Major Currencies Outlook (July 18, 2013)

Postby katetrades » Thu Jul 18, 2013 6:26 am

USD

The US dollar experienced a lot of volatility during the US session, as Ben Bernanke’s speech had a confusing impact on dollar pairs. At first, the transcript of his speech was interpreted by some market watchers to say that the Fed’s stimulus taper plan by the end of the year is still uncertain. However, when the press conference took place and Bernanke was able to clarify some remarks, the markets realized that the central bank is still on track to reduce bond purchases by Q4, as long as inflation and employment continue to improve. As for data, building permits and housing starts both disappointed. For today, initial jobless claims and the Philly Fed index are due.

EUR

The euro consolidated against the dollar for most of the day then encountered additional volatility during the New York session. In the euro zone, the Bank of Italy reduced its growth forecasts for the year, adding to selling pressure on the euro. Only the current account balance release and the Spanish bond auction are scheduled for the euro zone today.

GBP

The pound managed to score huge gains in yesterday’s trading sessions as the MPC vote turned out better than expected. Apparently, MPC members voted unanimously to keep interest rates and asset purchases unchanged, different from the expected 2-0-7 vote or the previous 3-0-6 vote. It appears that the improvements in the UK economy have convinced some dovish members to decide that the current level of monetary policy is appropriate. Claimant count change figures also came in better than expected and showed a larger decrease in claimants for June. UK retail sales are up for release today and a 0.2% uptick is expected.

CHF

The franc was unable to hold on to most of its gains against the dollar, as USD/CHF landed back above the .9400 handle. Swiss ZEW economic expectations improved from 2.2 to 4.8 but Bernanke’s speech had a bigger impact on the pair’s movement. For today, Swiss trade balance is up for release and it isn’t likely to have a strong effect on the franc’s direction.

JPY

The yen lost ground to its counterparts when the BOJ minutes revealed that policymakers are in disagreement when it comes to retaining long-term bond purchases as part of their stimulus efforts. For some, this is necessary in controlling volatility in Japanese markets but others cautioned that it could lead to a spike in borrowing costs later on. No other reports are due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls lost ground to the dollar in yesterday’s trading, as Bernanke confirmed that the Fed is still on track to reduce bond purchases. The Australian dollar got a heavier blow earlier today when the NAB quarterly business confidence figure sank from 2 to -1. As for Canada, the BOC kept monetary policy unchanged although Poloz did alter some of the lines in the previous statements. In addition, he adopted forward guidance by giving the markets some clues as to when they could start normalizing interest rates. There are no other reports due from the comdoll economies for the rest of the day.

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Re: Daily Market Outlook by Kate Curtis from Trader's Way

Postby katetrades » Fri Jul 19, 2013 5:50 am

Forex Major Currencies Outlook (July 19, 2013)

USD

The dollar regained ground when the US printed better than expected Philly Fed manufacturing data, with the index climbing from 12.5 to 19.8 instead of dipping to the consensus of 8.5. This goes to show that the Fed is still on track to taper in September and the economy could draw support from the manufacturing sector. Initial jobless claims were also better than expected at 334K, lower than the estimated 344K reading. No reports are due from the US today but be wary of profit-taking prior to the weekend’s G20 meetings.

EUR

Euro zone’s current account balance was weaker than expected, with the surplus shrinking from 23.8B to 19.6B. The ECB decided to ease collateral rules for acceptable asset-backed securities in hopes of spurring lending further. Medium-tier reports such as German PPI and Spanish housing price index are on tap from the euro zone today, both of which are unlikely to spur one-directional moves from euro pairs.

GBP

UK retail sales came in line with consensus as the report showed a 0.2% uptick. This was weaker than the previous 2.1% increase, but the positive figure was still able to lift the pound. Only the public sector borrowing report is due from the UK today, and given the state of their finances, it would be helpful to see a decline in the public deficit. Otherwise, the pound might give up some of its gains.

CHF

Swiss trade balance was better than expected at a surplus of 2.73B CHF, higher than the estimated 2.41B CHF. The previous month’s figure was revised to 2.12B CHF though. No reports are due from Switzerland today so we might see sideways movement for franc pairs.

JPY

The yen lost more ground to its counterparts in yesterday’s trading as Abe’s political party showed a strong lead in early polls. This means that Japan could be in for more aggressive structural reforms, which would include policies to keep the yen weak. All industries activity data is on tap for today and weak figures could lead to further yen weakness.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies struggled to hold on to their recent gains against the dollar, with the Canadian dollar showing some success. Canadian wholesale sales were much better than expected at 2.3%, higher than the estimated 0.4%, while the previous month figure enjoyed an upward revision. Meanwhile, Australian CB leading index was flat and the NAB quarterly business confidence report dipped from 2 to -1. Credit card spending in New Zealand rose by 5.4%, which helped lift the Kiwi. Canadian CPI data are up for release in today’s US session.

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Forex Major Currencies Outlook (July 22, 2013)

Postby katetrades » Mon Jul 22, 2013 8:23 am

USD

The US dollar lost ground to most of its major counterparts on Friday, as EUR/USD broke out from its consolidation and reached the 1.3150 area. There were no reports released from the US then, as the selloff was possibly a result of profit-taking ahead of the weekend’s G20 Summit. There were no surprises from the actual meetings, although the leaders did pledge to push for a banking union in Europe. For today, only the existing home sales is up for release from the US and it is set to show a reading of 5.27 million, up from the previous 5.18 million figure.

EUR

The euro edged higher against its counterparts on Friday as German PPI came in better than expected. Producer prices in euro zone’s largest economy stayed flat instead of falling by the estimate of 0.2%. This was also better than the previous reading of -0.3%. However, Spain posted a huge decline in house prices for the past quarter as the HPI showed a reading of -2.4%. There are no reports due from the euro zone today.

GBP

The pound made some gains against the Greenback on Friday, pushing GBP/USD closer to the 1.5300 handle. Public sector borrowing in the UK was higher than estimated, as the actual reading showed a 10.2 billion GBP deficit. On top of that, the previous month’s report was revised to show a larger public deficit of 12.4 billion GBP. There are no reports due from the UK today.

CHF

The franc managed to extend its wins against the US dollar on Friday, as there were no reports released from both the US and Switzerland then. USD/CHF edged below the .9400 handle and appears to be headed lower for the week. There are no reports due from Switzerland today.

JPY

The yen edged lower against its counterparts on Friday but managed to recover in today’s Asian session as Japanese Upper House elections showed that Prime Minister Abe’s party is set to take majority of the seats. All industries activity index printed a 1.1% increase, lower than the estimated 1.3% increase. The previous figure was also revised lower. There are no reports set for release from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies moved mostly sideways on Friday but managed to end a little higher against its lower-yielding counterparts. Canadian core CPI showed a 0.2% decline while the headline CPI came in below expectations and printed a flat reading. No reports are due from the comdoll economies today.

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Re: Daily Market Outlook by Kate Curtis from Trader's Way

Postby katetrades » Tue Jul 23, 2013 5:45 am

Forex Major Currencies Outlook (July 23, 2013)

USD

The US dollar was off to a weak start for the week, as the existing home sales report turned out to be a disappointment. The actual report posted a 5.08 million figure instead of the estimated 5.27 million reading. This was also lower than the previous 5.18 million figure. For today, only the Richmond manufacturing index is due from the US and while this doesn’t normally induce a strong reaction from the dollar, it could leave a lasting impact today. After all, it is the only US release on deck. The reading is slated to dip from 8 to 7 but a strong reading could be positive for the dollar.

EUR

The euro managed to score more gains against the US dollar in yesterday’s trading but it gave way to yen strength. In Portugal, the coalition government was still unable to reach an agreement yet Silva announced that early elections are no longer necessary. There are no major reports due from the euro zone today, as the only release is the consumer confidence report. The figure is expected to post a small improvement from -19 to -18, which could still be positive for the euro.

GBP

The pound was able to end the day higher against the US dollar and euro while struggling to hold on to its recent gains against the yen. There were no reports released from the UK yesterday but the upbeat sentiment from the previous week’s release of monetary policy votes. BBA mortgage approvals are up for release today and a 38.5K figure is expected, which is higher than the previous 36.1K reading. A strong figure could allow the pound to extend its rallies.

CHF

There were no reports released from Switzerland yesterday yet the franc managed to score gains against the dollar, which was sold off because of weak existing home sales. There are no reports again from the Switzerland today, which could mean quiet trading for USD/CHF as there are no major reports from the US.

JPY

The yen continued to benefit from the recently concluded elections in Japan, which showed that Abe and his party was able to secure a landslide victory. There are no reports due from Japan today, which suggests that the yen could be in for quiet trading or could be sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

Comdolls were able to benefit from the rise in commodity prices on Monday, as AUD/USD climbed past the .9200 handle while USD/CAD broke below the short-term support. Canada is set to print retail sales data today and small improvements are expected while New Zealand will release its trade balance in the upcoming Asian session. A trade deficit of 102 million NZD is expected to follow the previous 71 million NZD surplus, which might be negative for the Kiwi.

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Forex Major Currencies Outlook (July 24, 2013)

Postby katetrades » Wed Jul 24, 2013 6:38 am

USD

Dollar weakness was still evident in yesterday’s trading, as EUR/USD broke higher while the commodity currencies extended their wins against the Greenback. Only the Richmond manufacturing index was released from the US and it showed a disappointing -11 reading instead of improving from 8 to 7. This revealed that there are still some inherent weaknesses in the US economy, which reminded traders that the Fed taper isn’t set in stone just yet. For today, new home sales and crude oil inventories are up for release. Remember that existing home sales came in weak earlier this week, which increases the chance for a downside surprise in new home sales.

EUR

The euro ended the day higher against the dollar again, despite the lack of data from the euro zone. Euro zone PMIs from Germany and France are up for release today and markets are expecting tiny improvements in the manufacturing and services sectors of both economies. Although most of the figures are projected to stay below 50.0 and indicate contraction, strong data could help lift the euro against its counterparts.

GBP

The pound managed to pocket some gains against the dollar yesterday, even though the BBA mortgage approvals report came in weak. The figure logged in a 37.3K increase, higher than the previous 36.3K reading but lower than the estimate at 38.5K. Still, an increase is an increase, and this was received positively by pound traders as it indicates that the government’s Funding for Lending Scheme is bearing fruit. CBI industrial orders expectations are due today and the figure is estimated to improve from -18 to -12, indicating that the decline was slower during the period.

CHF

No reports were released from Switzerland yet the franc continued its winning ways. Switzerland’s schedule is still empty for today, which suggests that USD/CHF and EUR/CHF could take their cues from US data and euro zone reports respectively.

JPY

The yen had a mixed performance as it remained sensitive to currency-specific data of its counterparts. The good news from Japan though is that the BOJ upgraded their growth forecasts for the third month in the row, revealing that the central bank believes their stimulus efforts are working out. The trade balance came in slightly below consensus as it printed a -0.6T JPY reading instead of the estimate at -0.58T JPY, but was still better than the previous -0.78T JPY figure.

Commodity Currencies (AUD, NZD, CAD)

Not even the drop in commodity prices was able to keep the comdolls from ending with wins, as AUD/USD reached the .9300 area while USD/CAD dipped to 1.0300. New Zealand’s trade balance came in much better than expected at 414M instead of the estimate at 5M, allowing NZD/USD to come close to .8000. Canadian retail sales also posted a strong upside surprise while Australian quarterly CPI came in as expected. Chinese flash manufacturing PMI from HSBC was weaker than estimated though, as it slipped from 48.2 to 47.7 instead of improving to 48.6.

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Forex Major Currencies Outlook (July 25, 2013)

Postby katetrades » Thu Jul 25, 2013 6:34 am

USD

The US dollar regained its strength in yesterday’s trading as a combination of risk aversion and strong US new home sales boosted the safe-haven currency. The actual new home sales figure showed a 497K reading, higher than the estimated 482K figure. However, the previous month’s report was revised down to show a 459K figure. US durable goods orders data are scheduled for release today and the headline figure is slated to print a 1.1% increase while the core version of the report could show a 0.5% uptick. Stronger than expected data could lift the dollar against its counterparts once more.

EUR

Euro zone PMI figures all came in stronger than expected for July, with Germany’s reports showing an expansion in its manufacturing and services industries. This was enough to push the region’s manufacturing PMI above the 50.0 mark as well, showing that the industry grew for the month. Spanish jobs data and German Ifo business climate index are up for release today. Germany’s business climate reading is expected to improve from 105.9 to 106.3 while Spain’s jobless rate could hold steady at 27.2%.

GBP

The pound was unable to hold on to its recent gains against the dollar as GBP/USD failed to break past the 1.5400 handle. UK CBI industrial orders expectations came in line with consensus, as it improved from -18 to -12. The UK preliminary GDP figure is up for release today and a 0.6% growth figure is expected. Stronger than expected data could push GBP/USD past 1.5400 while weak data could trigger a sharper selloff.

CHF

There were no reports released from Switzerland yesterday, leaving the franc victim to dollar strength. Switzerland’s schedule is empty again today, which suggests that USD/CHF could move according to US data once more.

JPY

Japanese CSPI came in weaker than expected at 0.4% instead of the estimated 0.7% increase. Inflation data is coming up in the next Asian session and these could be crucial in determining if the BOJ’s stimulus plans are still working or if additional easing is needed.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi gave way to dollar strength yesterday, as both commodity currencies were weighed down by weak Chinese PMI. HSBC reported a deeper contraction of 47.7 for July as the index was expected to improve from 48.2 to 48.6. Australian quarterly CPI came in line with consensus at 0.4%, which suggests that the RBA doesn’t need to implement additional stimulus anytime soon. As for the Loonie, CAD bulls continued to push the currency higher against most of its other counterparts thanks to strong Canadian retail sales for May.

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Forex Major Currencies Outlook (July 26, 2013)

Postby katetrades » Fri Jul 26, 2013 5:02 am

USD

The US dollar continued to cave under the higher-yielding currencies in yesterday’s trading, as mixed durable goods orders data led traders to believe that the U.S. recovery is unsustainable. The headline figure showed a 4.2% jump, mostly driven by automobile sales, while the core figure remained flat. No reports are due from the U.S. today, which opens up the possibility of profit-taking ahead of the weekend.

EUR

The euro continued to edge higher against the dollar, as EUR/USD tapped the 1.3300 area during the U.S. session. German Ifo business climate came in line with consensus at 106.2, which is a good improvement from the previous month’s figure. For today, there are no major reports from the euro zone. Only the German consumer prices report is up for release at 7:00 am GMT.

GBP

The pound had a choppy trading day, especially after the release of the UK preliminary GDP figure. The actual report showed a 0.6% uptick as expected, but this appeared to disappoint pound traders as the currency suffered a quick selloff against most of its counterparts upon the release. No reports are due from the U.K. today.

CHF

There were no reports released from Switzerland yesterday and none are due today, which suggests that the franc could continue to take advantage of the ongoing dollar weakness.

JPY

The yen enjoyed some gains against the dollar, as Japan printed another round of increases in consumer price levels. Tokyo showed a 0.3% uptick as expected while the national core CPI printed a 0.4% increase, higher than the estimated 0.3% rise. This reflects how the BOJ’s massive stimulus efforts are working and that no additional stimulus is needed for now.

Commodity Currencies (AUD, NZD, CAD)

NZD/USD enjoyed a strong rally in yesterday’s trading when the RBNZ adopted forward guidance in announcing that the low rates would last until 2014 only. This prompted speculations of a rate hike, which pushed NZD/USD to the .8100 mark. Meanwhile, the Australian dollar was able to recover most of its recent losses to the dollar as it edged back above the .9200 handle.

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Forex Major Currencies Outlook (July 29, 2013)

Postby katetrades » Mon Jul 29, 2013 9:21 am

USD

Dollar pairs were stuck in consolidation last Friday, as there were no major reports released from the United States. The University of Michigan consumer sentiment figure was revised a bit higher, but it did very little to support the US dollar. For today, the pending home sales figure is up for release and a 1.1% decline is expected. A larger than expected drop could be very negative for the dollar, although traders might be hesitant to take large dollar positions ahead of the FOMC statement and GDP release on Wednesday.

EUR

The euro consolidated against the dollar on Friday, as there were no reports released from euro zone then. The euro zone schedule is still empty again for today, which suggests more quiet trading for EUR/USD. The main event for the euro this week is the ECB rate statement scheduled during the latter half. Until then, euro traders might refrain from pushing the shared currency in a particular direction.

GBP

After the volatile behavior midweek, GBP/USD stayed inside its ranges on Friday as there were no major reports from the U.K. then. Only medium-tier reports, such as mortgage approvals, net lending to individuals, and CBI realized sales are due from the UK today. Strong data could provide support for the pound while weak reports could undermine its strength.

CHF

The franc consolidated against the dollar on Friday but USD/CHF selling pressure still appears strong. The pair is on track to test the support around the .9200 major psychological level at the moment. There are no reports up for release from Switzerland again today, which suggests that USD/CHF could stay in consolidation.

JPY

The yen continues to enjoy support from improved Japanese data. The Tokyo core CPI showed a 0.3% uptick as expected while the national core CPI printed a higher than expected 0.4% increase in price levels. Earlier today, Japan released its retail sales figure and showed a 1.6% increase, close to the consensus of 1.7%. More reports from Japan, such as the household spending and industrial production figures, are due in the upcoming Asian session.

Commodity Currencies (AUD, NZD, CAD)

Comdolls stayed in consolidation on Friday, as though waiting for more clues before resuming their recent action. Only the building consents data is due from New Zealand later today and it is expected to show another positive figure.

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