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Daily Market Outlook by Kate Curtis from Trader's Way

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Forex Major Currencies Outlook (Aug 29, 2017)

Postby katetrades » Tue Aug 29, 2017 8:55 am

USD

The dollar dipped lower against its rivals at the start of the week as Hurricane Harvey weighed heavily on energy stocks and US equity indices. Data from the US also turned out weaker than expected as the goods trade deficit widened from $64 billion to $65.1 billion versus the projected $64.5 billion shortfall on weaker exports of motor vehicles. The CB consumer confidence index is due today and a dip from 121.1 to 120.3 is eyed.

EUR

The euro was mostly higher against its peers as the shared currency acted as safe-haven in the European region. Data was actually weaker than expected but traders are still bullish on the euro after Draghi refrained from talking down the currency. The German GfK consumer climate index is due today, along with French consumer spending and preliminary GDP data.

GBP

The pound was able to bounce back as Brexit jitters started to fade while talks are underway. There were no reports out of the UK economy so far as banks are closed for the Summer Day holiday and only the Nationwide HPI is lined up today. Analysts are expecting to see a 0.1% uptick in house prices, lower than the earlier 0.3% gain.

CHF

The franc had a mixed run as it reacted mostly to currency-specific events and market sentiment. There were no reports out of the Swiss economy on Monday and none are lined up today so the same behavior could be seen for franc pairs.

JPY

The yen gave up some ground to its peers but was able to rake in gains against the Canadian dollar on weaker oil prices. Japanese household spending data is due today and a slowdown from 2.3% to 0.8% is eyed. The unemployment rate is also due and no change from the earlier 2.8% figure is expected. The BOJ will also print its core CPI figure and a sizeable gain could revive expectations of more reduction in JGB purchases.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were mostly stuck in consolidation, waiting for bigger market catalysts for the time being. The Loonie, meanwhile, was bogged down by a sharp fall in oil prices due to Hurricane Harvey's impact on refineries in the US Gulf Coast and talks of NAFTA termination. Underlying inflation reports are due from Canada today.

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Forex Major Currencies Outlook (Sep 05, 2017)

Postby katetrades » Tue Sep 05, 2017 3:00 am

USD

US banks were closed on Labor Day Monday so markets were off to a slow start. The US currency did stay supported even with rising tensions with North Korea as the White House issued a statement reiterating that the government has plenty of options on the table. Headlines of another hurricane about to hit the US could keep a lid on equity and dollar gains but today's set of FOMC speaker could push the currency around.

EUR

The euro struggled to stay afloat as data came in mixed. Spain's unemployment change turned out weaker than expected with a 46.4K increase in joblessness versus the projected 16.3K rise. Meanwhile, the Sentix investor confidence index rose from 27.7 to 28.2 versus the consensus at 27.4. Final services PMI and euro zone retail sales are due today.

GBP

The pound staged a sharp selloff around the end of the US session likely due to reports that Norway is investing more in the UK economy, something that investors thought might be the wrong move. UK construction PMI was weaker than expected at 51.1 versus the consensus at 52.1 and the earlier 51.9 figure. Services PMI is due today and a dip from 53.8 to 53.5 is eyed.

CHF

The franc was able to chalk up more gains across the board on risk-off flows. There were no reports out of the Swiss economy yesterday while today has GDP and CPI on tap. Analysts expect the economy to have expanded by 0.5% in Q2, stronger than the earlier 0.3% growth figure. CPI is expected to stay flat after previously recording a 0.3% dip.

JPY

The yen also raked in gains on risk aversion stemming from renewed tensions with North Korea. There were no major reports out of Japan yesterday while today also has an empty economic calendar, leaving market sentiment to be the main driver of price action.

Commodity Currencies (AUD, NZD, CAD)

The commodity currencies had a mixed run as they were pushed and pulled by market sentiment. Data from Australia was mixed, with company operating profits down 4.5% in Q2 and job advertisements up 2.0% versus the earlier 1.6% gain. Australia also reported a drop in its AIG services index from 51.9 to 51.1. The RBA decision is coming up next but no actual rate changes are expected. New Zealand will have its GDT auction in the next Asian session.

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Forex Major Currencies Outlook (Sep 11, 2017)

Postby katetrades » Mon Sep 11, 2017 2:21 am

USD

The dollar pulled off Friday with some gains on profit-taking while medium-tier reports came in mixed. Final wholesale inventories rose 0.6% versus the projected 0.4% uptick while consumer credit rose from 11.8B USD to 18.5B USD versus the consensus at 15.1B USD. There are no reports due from the US today so traders would likely keep close tabs on the impact of Hurricane Irma on US markets and other political updates.

EUR

The euro had a mixed run at the end of the week as traders booked profits off the post-ECB rallies while medium-tier data came in mostly in line with expectations. Only the German trade balance was a disappointment as the surplus narrowed from 21.2B EUR to 19.5B EUR. French industrial production rose 0.5% as expected. Italian industrial production data is due today and a 0.5% dip is eyed.

GBP

The pound ended Friday on a positive note as data came in mostly stronger than expected. Manufacturing production rose 0.5% versus the 0.3% forecast while industrial production posted the estimated 0.2% uptick. The goods trade deficit came in at 11.6 billion GBP versus the projected 11.9 billion GBP shortfall. There are no reports due from the UK economy today.

CHF

The franc was in consolidation mode at the end of the week as the Swiss jobless rate came in line with expectations at 3.2%. There wasn't much in the way of catalysts for risk sentiment either, so traders likely held off any large positions in anticipation of potential weekend risk. There are no reports due from Switzerland today.

JPY

The yen scored some gains on Friday but gapped down against its peers over the weekend on the lack of any negative updates from North Korea. The situation is still fluid, though, and traders are awaiting another round of sanctions and Pyongyang's reaction. Japan's final GDP reading was downgraded from 1.0% to 0.6%. Core machinery orders, preliminary machine tool orders, and tertiary industry activity index are due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent gains on profit-taking at the end of the previous week since traders likely lightened their risk-on holdings to avoid weekend risk. Canada's headline jobs figures came in better than expected at 22.2K in hiring gains but this was mostly due to part-time positions. Over the weekend, China printed stronger than expected CPI and PPI. Canada's housing starts is due next.

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Forex Major Currencies Outlook (Sep 12, 2017)

Postby katetrades » Tue Sep 12, 2017 9:06 am

USD

The US dollar was able to start the week on a good note on easing geopolitical tensions and the weakening Hurricane Irma. Officials have reportedly scaled down their sanctions on the hermit nation in order to get the vote from China and Russia, but this could still be met with actual strikes from North Korea based on their foreign ministry's statements. There have been no reports out of the US economy but the upbeat stock market performance has lifted the dollar. Only the NFIB Small Business Index and JOLTS job openings are due from the US today.

EUR

The euro retreated against some of its peers as traders appear hesitant to take the shared currency any higher without fresh catalysts. Italy's industrial production report was stronger than expected with a 0.1% uptick instead of the estimated 0.5% decline. French final non-farm payrolls for Q2 and the Italian quarterly unemployment rate are lined up next.

GBP

The pound had a quiet start to the trading week as traders are positioning ahead of the top-tier events. UK CPI is up for release next and both headline and core CPI could post stronger price pressures, which might then revive expectations of an upbeat BOE statement later in the week. Headline CPI could advance from 2.6% to 2.8% while the core reading could tick up from 2.4% to 2.5%.

CHF

The franc returned some of its recent gains as risk appetite improved and traders lightened up on their lower-yielding holdings. There were no reports out of the Swiss economy on Monday and none are due today so market sentiment could be the primary driver of franc price action.

JPY

The yen was one of the biggest losers so far in the week as improving risk appetite led traders to dump the lower-yielding currency. Data from Japan was mixed, with core machinery orders up 8.0% versus the 4.2% forecast and tertiary industry activity up 0.1% as expected. Preliminary machine tool orders rose 36.3% on a year-over-year basis. There are no reports due from Japan today so risk sentiment could be key.

Commodity Currencies (AUD, NZD, CAD)

The Loonie had another big win as rumors of another OPEC extension were floated after Saudi Arabia's energy minister met with his counterparts in Venezuela, UAE, and Kazakhstan. Canadian housing starts also turned out better than expected, rising from 222K to 223K instead of declining to the estimated 216K figure. Australia's NAB business confidence index is due next.

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Forex Major Currencies Outlook (Sep 13, 2017)

Postby katetrades » Wed Sep 13, 2017 6:19 am

USD

The US dollar scored another day in the green as upbeat stock market performance on tax reform remarks and easing concerns about North Korea was the main driver. Medium-tier reports also turned out stronger than expected, with the NFIB Small Business index posting a surprise uptick and the JOLTS job openings figure for July hinting at more hiring growth down the line. US PPI numbers are due today and the headline figure could show a 0.3% rebound while the core reading could see a 0.2% uptick.

EUR

The euro had a mixed run as it mostly reacted to its counterparts. Data was mixed, with French private payrolls falling short of the estimated 0.5% gain and printing a 0.4% increase while the Italian quarterly jobless rate improved to 11.2% versus the 11.3% consensus. German final CPI and WPI are up for release next.

GBP

The pound enjoyed a strong kick higher when the UK printed higher than expected inflation reports. Headline CPI jumped from 2.6% to 2.9% versus the 2.8% consensus while core CPI rose from 2.4% to 2.7%. Underlying inflation figures also beat expectations, reviving hopes that the BOE could consider hiking interest rates in their upcoming statement. But before that, the UK jobs report is up for release next and a 0.8K increase in claimants is eyed. The average earnings index could recover from 2.1% to 2.3%.

CHF

The franc gave up more ground to most of its peers as risk-taking was in play. There were no reports to keep the franc supported in earlier sessions while today has the PPI lined up. Analysts are expecting to see a 0.2% increase after the previous flat reading, but downbeat data could keep traders wary of SNB jawboning in their statement later this week.

JPY

The yen was also in the red as risk appetite led traders to dump lower-yielding currencies. There were no reports from Japan then and today has the BSI manufacturing index and PPI on the docket. The former could show an improvement from -2.9 to +4.8 while the latter could rise from 2.6% to 3.2%.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to put up a fight against the dollar on risk-taking, with the Kiwi leading the pack on easing political uncertainty ahead of the elections. A poll revealed that the Green Party might not end up with enough votes to secure a seat in parliament, which might leave the National Party to run off with a majority. In Australia, the NAB business confidence index fell from 12 to 5 and the Westpac consumer sentiment index is due next. Both the EIA and OPEC downgraded oil demand forecasts for this year, with the latter reporting weaker compliance in its output deal for August.

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Forex Major Currencies Outlook (Sep 14, 2017)

Postby katetrades » Thu Sep 14, 2017 8:19 am

USD

The US dollar gained more momentum on its recent rally, closing out another day in the green. PPI readings actually came in slightly weaker than expected at a 0.2% gain for the headline reading and a 0.1% uptick for the core figure, but this still kept bulls hopeful for an upbeat CPI result later this week. Apart from that, sustained focus on tax reform and small steps in the right direction in the absence of North Korean provocations have also allowed the US currency to edge higher. Headline CPI could show a 0.3% gain while the core reading could show a 0.2% uptick today.

EUR

The euro was also able to hold on to some of its gains thanks to mostly upbeat medium-tier data from the region. German final CPI was unchanged at 0.1% as expected but the WPI printed a higher 0.3% rebound versus the projected 0.1% uptick and the earlier 0.1% dip. The euro zone quarterly employment change report printed a 0.4% gain versus the projected 0.3% increase. Euro zone industrial production was up 0.1% as expected and the only report due today is the French final CPI reading.

GBP

The pound struggled to establish a clear direction as it was bogged down by some misses in the UK jobs report. Although the claimant count fell by 2.8K instead of increasing by 0.8K, the earlier figure was revised to show a larger 2.9K drop while the average earnings index didn't budge from 2.1% instead of advancing to the estimated 2.3% figure. Still, the unemployment rate improved from 4.4% to 4.3%. The BOE decision is due today and a hawkish tilt is expected after seeing the upbeat CPI figures earlier in the week.

CHF

The franc resumed its slide to its peers as risk appetite extended its stay in the financial markets. Swiss PPI was actually better than expected at 0.3% versus the projected 0.2% uptick, but traders seem to be wary of additional SNB jawboning in their upcoming monetary policy announcement.

JPY

The yen continued to give up ground on improving market sentiment and dollar strength. Data from Japan was better than expected as the BSI manufacturing index jumped from -2.9 to +9.4, outpacing the consensus at +4.8. Only the revised industrial production report is due from Japan today and no changes from the initial -0.8% reading is eyed.

Commodity Currencies (AUD, NZD, CAD)

The Loonie had another positive day as the oil-related currency managed to shrug off the buildup in stockpiles as reported by the EIA and API. OPEC reported weaker compliance in its output deal for the month of August but saw production fall by 79K barrels per day in the same month. Australia's jobs report is due next and a 17.5K increase in hiring is eyed, lower than the earlier 27.9K figure. Chinese data could also push comdolls around as industrial production and retail sales are expecting gains.

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Forex Major Currencies Outlook (Sep 15, 2017)

Postby katetrades » Fri Sep 15, 2017 8:15 am

USD

The US dollar carried on with its rally, supported by stronger December Fed rate hike odds after seeing the upbeat headline CPI figure. The reading climbed from 0.1% to 0.4% versus the 0.3% consensus while the core version of the report came in line with expectations of a 0.2% uptick. Retail sales data is due next and the headline figure could show a 0.1% uptick while the core reading could come in at 0.5%.

EUR

The euro gave up some ground to its counterparts as traders flocked to the dollar, pound, and Swiss franc. There were no major reports out of the euro zone but its usual rivals drew more investor attention and led to some unwinding in long positions. Only the region's trade balance is due today and a narrower surplus of 20.3 billion EUR is eyed.

GBP

The pound got a strong boost from a hawkish BOE statement, even though the central bank refrained from hiking in a 2-7 vote. Majority of members saw scope for reducing stimulus in the coming months, fueling expectations that a rate increase would happen before the end of the year. The central bank also projected that inflation could overshoot their 2% target and come in at 3% next month, supporting the case for tightening. Only the BOE Quarterly Bulletin and CB leading index are lined up today.

CHF

The franc enjoyed a bit of support after the SNB signaled that the franc was no longer as overvalued as it used to be. SNB head Jordan did reiterate that currency intervention remains an option but traders judged that it wasn't such an urgent matter now that the euro is strengthening against the Swiss currency on taper expectations.

JPY

The yen regained some lost ground on rumors that North Korea is gearing up for another test of a missile, which might be an ICBM this time. Japan's industrial production was kept unchanged at -0.8% as expected and there are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were slightly lower for the day as risk-off vibes appeared to be creeping in. The Kiwi was the weakest of the bunch as it reacted the most to downbeat data from China. Australia printed stronger than expected jobs figures while the Loonie drew some support from oil price gains. New Zealand is set to print its Business NZ manufacturing index next.

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Forex Major Currencies Outlook (Sep 18, 2017)

Postby katetrades » Mon Sep 18, 2017 4:59 am

USD

The dollar was mostly weaker against its peers on Friday as economic reports disappointed. Headline retail sales slipped 0.2% instead of posting the estimated 0.1% uptick while the core version of the report indicated a smaller than expected 0.2% gain versus the 0.5% consensus. Industrial production and capacity utilization also disappointed while the preliminary UoM consumer sentiment index dipped to 95.3. Only a couple of medium-tier reports are lined up today, keeping traders' attention on the North Korea situation and more updates on tax reform.

EUR

The euro had a mixed run as it reacted mostly to currency-specific events. The region's trade surplus was below consensus at 18.6 billion EUR versus 20.1 billion EUR while the previous reading was downgraded to 21.7 billion EUR. Final CPI readings and the Italian trade balance are up for release today.

GBP

The pound got another boost on Friday and carried on with its post-BOE rally when MPC member Vlieghe refrained from jawboning the currency. He signaled a shift from his usual dovish tone to a more hawkish bias, leading many to speculate that it's only a matter of time before the central bank hikes rates. Earlier today, the Rightmove HPI showed a 1.2% drop in house prices.

CHF

The Swiss franc also had a mixed performance as the lower-yielding currency mostly reacted to its counterparts and was also hit by some profit-taking at the end of the week. There were no major reports out of the Swiss economy on Friday and none are due today so the week could be off to a slow start for franc pairs.

JPY

The yen lost ground to most of its peers as bulls now seem to be worried about the potential repercussions of a North Korean missile strike on the Japanese economy. Traders also lightened up on their holdings ahead of the BOJ statement this week. Japanese banks are closed for the holiday today, though

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a bit of ground on Friday as risk aversion peeped back in the financial markets on renewed threats from North Korea. There were no major reports out of Australia, New Zealand and Canada today so comdolls could be off to a slow start or sensitive to market sentiment ahead of top-tier events later on.

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Forex Major Currencies Outlook (Sep 19, 2017)

Postby katetrades » Tue Sep 19, 2017 6:13 am

USD

The dollar is off to a strong start against its peers as traders must be adjusting their positions ahead of the FOMC decision later in the week. Data printed on Friday came in weaker than expected as headline consumer spending fell 0.2% instead of rising by the estimated 0.1% uptick. US building permits and housing starts, as well as the current account balance and import prices, are up for release.

EUR

The euro was also off to a good start this week as it bounced against most of its counterparts when final CPI readings were unchanged. Keep in mind that both the headline and core reading have indicated a pickup in price levels over the past month, supporting ECB tapering expectations next month or in December. Canadian manufacturing sales data is due today and a 1.4% drop is eyed.

GBP

The pound made a bit of a retreat from its strong surge on Friday as traders probably booked profits ahead of the UK retail sales release later this week. The Rightmove HPI showed a 1.2% decline in house prices, following the earlier 0.9% slide. There are no major reports due from the UK for now so bulls might take a bit of a pause.

CHF

The franc weakened to the dollar but made a bit of a rebound against some of its peers as the SNB dialed down its intervention threats. There were no reports out from the franc so far this week and none are due today so market sentiment or currency-specific action could push franc pairs around.

JPY

The yen was off to a weak start as risk appetite extended its stay on the lack of moves from North Korea so far. At the same time, traders are also likely adjusting their positions ahead of the BOJ decision later this week. Japanese banks were closed for the holiday on Monday and there are no major reports due today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were on the back foot as the gang corrected from their strong rallies last week. Canada's foreign securities purchase came in stronger than expected while BOC member Lane reiterated that rates are still relatively low. New Zealand's Westpac consumer sentiment index is due next and the RBA will be printing its meeting minutes next.

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Forex Major Currencies Outlook (Sep 20, 2017)

Postby katetrades » Wed Sep 20, 2017 4:06 am

USD

The dollar was one of the weaker currencies for the day even as data came in better than expected. Building permits came in at 1.30 million versus the 1.22 million consensus while housing starts fell from 1.19 million to 1.18 million, still higher than the estimate at 1.17 million. Import prices rose 0.6% versus the estimated 0.4% uptick. The dollar's dip was likely due to profit-taking ahead of the FOMC decision as many are anticipating to see downgrades in growth forecasts on account of the recent hurricanes.

EUR

The euro managed to stay in the green, except against the Aussie and Kiwi, as data turned out strong. The current account surplus grew from 22.8 billion EUR to 25.1 billion EUR while the German ZEW economic sentiment index rose from 10 to 17, outpacing the consensus at 12.3. The region's ZEW figure rose from 29.3 to 31.7, just short of the 32.4 consensus. Only the German PPMI is due today and a 0.1% uptick is eyed.

GBP

The pound had a mixed run as it seemed to get pushed around by its counterparts on the lack of top-tier UK data. Retail sales is due next and a 0.2% uptick is expected, slightly lower than the earlier 0.3% gain. Stronger than expected results could revive BOE rate hike hopes, although the rally could be subdued after Carney previously mentioned that they're hiking was mostly due to the rise in global interest rates.

CHF

The franc was in a weak spot as risk appetite was present in the markets and there were no major reports out of the Swiss economy. The SNB Quarterly Bulletin is up for release today but this doesn't normally lead to big moves for the Swiss currency, leaving it sensitive to market sentiment once more.

JPY

The yen also gave up some ground on risk-taking and the lack of top-tier reports to keep it supported. Traders are also likely adjusting their positions ahead of the BOJ decision this week. For today, the trade balance is due and a 0.41 trillion JPY surplus is eyed, up from the earlier 0.32 trillion JPY reading.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were mostly in the lead as the RBA minutes didn't turn out too downbeat while the GDT auction yielded a 0.9% gain in dairy prices. New Zealand's current account balance is due next and a deficit of 0.82 billion NZD is eyed after the earlier surplus of 0.24 billion NZD. Canadian manufacturing sales sank 2.6% versus the projected 1.7% drop. New Zealand's quarterly GDP is due in the next Asian session and a 0.8% growth figure is eyed.

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