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Forex Forum to Share, Discuss, Communicate and Trade Forex • Daily Market Outlook by Kate Curtis from Trader's Way
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Forex Major Currencies Outlook (July 31, 2017)

PostPosted: Mon Jul 31, 2017 3:48 am
by katetrades
USD

The US dollar regained some ground to its peers on Friday when GDP data beat expectations. The advanced reading for Q2 showed a 2.6% growth figure versus the projected 2.5% expansion. However, the price index and employment cost index both came short of estimates. Chicago PMI and pending home sales are due today.

EUR

Euro zone data turned out mixed on Friday as German and French preliminary CPI beat expectations while French consumer spending fell short. Euro zone flash CPI readings are due today, with the headline figure projected to hold steady at 1.3% and the core reading projected to stay unchanged at 1.1%. German retail sales is also due and a meager 0.1% uptick is eyed.

GBP

There were no reports released out of the UK economy on Friday. Only the net lending to individuals and mortgage approvals data are lined up today so there might not be much volatility for pound pairs unless traders start pricing in expectations for the BOE decision later in the week.

CHF

Switzerland printed stronger than expected economic data on Friday, with the KOF economic barometer up from 105.8 to 106.8 versus the projected 105.9 reading. There are no major reports due from the Swiss economy today so the franc could move according to market sentiment or SNB intervention threats.

JPY

Japanese reports turned out mostly stronger than expected on Friday, except for the retail sales reading which came in at 2.1% versus 2.3%. Household spending jumped 2.3% year-over-year versus the estimated 0.6% uptick while the Tokyo core CPI showed a 0.2% gain versus the estimated 0.1% increase. Earlier today, the preliminary industrial production report showed a 1.6% rebound as expected.

Commodity Currencies (AUD, NZD, CAD)

Canada's monthly GDP reading showed 0.6% growth, stronger than the projected 0.2% uptick. Over the weekend, New Zealand reported a 1.0% drop in building consents. China's official manufacturing PMI dipped from 51.7 to 51.4 while the non-manufacturing component fell from 54.9 to 54.5. New Zealand reported a dip in ANZ business confidence from 24.8 to 19.4.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 01, 2017)

PostPosted: Tue Aug 01, 2017 2:55 am
by katetrades
USD

The Greenback was under pressure due to internal chaos in the White House and brewing tensions with North Korea. According to two intelligence officials, the latest successful ICBM test signals that the hermit nation could hit most of the US. Data was mixed, with the Chicago PMI posting a larger than expected drop to 58.9 and pending home sales showing a 1.5% rebound. Personal spending and income, along with the core PCE price index, are lined up next.

EUR

The euro continued to advance against most of its peers when the core CPI flash estimate printed stronger than expected results. The headline reading was unchanged at 1.3% as expected but the core version rose from 1.1% to 1.2%. German retail sales also beat expectations with a 1.1% jump versus the 0.1% estimate. Final manufacturing PMIs from its top economies and the euro zone's flash GDP reading are due today.

GBP

The pound is holding steady leading up to the release of June PMI readings and the BOE decision. Data turned out stronger than expected yesterday as net lending to individuals rose to 5.6 billion GBP while mortgage approvals held steady at 65K. Nationwide HPI is due today, along with the manufacturing PMI which could recover from 54.3 to 54.4.

CHF

The franc kept tumbling against its peers as pairs have been breaking technical levels and drawing more sellers in. There were no reports out of the Swiss economy yesterday but the monetary policy divergence with the ECB is probably keeping franc bears in the game. Swiss banks are closed for the holiday today.

JPY

The Japanese yen had a mixed run as it mostly reacted to currency-specific events. The safe-haven currency appears to be regaining its lost ground to the dollar as the latter faces falling bond yields on the chaos in Washington. The final manufacturing PMI was downgraded slightly from 52.2 to 52.1.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was unable to hold on to its gains even though crude oil ticked higher. Underlying inflation data from Canada printed downbeat results, dashing hopes of another BOC hike in the near future. RMPI fell 3.7% versus the projected 3.2% fall while the IPPI slipped by 1.0%. The RBA decision is due next and no changes to the 1.50% benchmark rate is eyed as the central bank might issue a neutral statement.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 02, 2017)

PostPosted: Wed Aug 02, 2017 8:38 am
by katetrades
USD

The dollar recovered slightly against its peers when a bit of risk aversion returned to the markets and US data came in mostly in line with estimates. The core PCE price index posted another 0.1% as expected while personal spending ticked up by 0.1% as well, even while personal income was flat. The ISM manufacturing PMI slipped from 57.8 to 56.3, slightly lower than the 56.4 estimate. The ADP report is due next and a 187K gain in hiring is eyed.

EUR

The euro was off to a good start as European stocks rallied on the region's flash GDP report. However, the shared currency retreated when the German bond auction resulted to lower yields. The German unemployment change report showed a larger 9K drop in joblessness while the region's GDP showed a 0.6% expansion. The Spanish unemployment change report is due next.

GBP

The pound was able to hold its ground thanks to upbeat manufacturing PMI. The reading recovered from 54.2 to 55.1, outpacing the consensus at 54.4. The construction PMI is due next and a dip from 54.8 to 54.3 is eyed but another stronger than expected read could mean more pound gains ahead of the BOE decision later this week.

CHF

The franc was still in a weak spot but managed to recoup its losses when risk aversion returned. There were no major reports out of the Swiss economy then while today has retail sales, manufacturing PMI, and the SECO consumer climate index. Retail sales are expected to recover by 1.3% while the manufacturing PMI could fall from 60.1 to 58.9. The SECO index is projected to climb from -8 to -3.

JPY

The yen had a mixed performance as it reacted mostly to currency-specific events rather than establishing its own direction. The BOJ core CPI held steady at 0.3% instead of dipping to the projected 0.2% figure and the consumer confidence index is due today. Analysts are expecting to seen an improvement from 43.3 to 43.5.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their gains as crude oil and dairy prices dipped. The API reported a surprise build in stockpiles while the GDT auction showed a 1.6% drop in dairy prices. New Zealand also reported a surprise 0.2% drop in hiring for Q2 but the unemployment rate improved from 4.9% to 4.8%. The RBA kept rates unchanged at 1.50% as expected while issuing a relatively neutral statement.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 03, 2017)

PostPosted: Thu Aug 03, 2017 4:33 am
by katetrades
USD

The US dollar had a mixed run as it reacted mostly to currency-specific data and was tossed around by Fed commentary. A couple of Fed officials warned that weak inflation should keep gradual tightening in place while Bullard emphasized that the balance sheet runoff should start this fall. The ADP report showed a weaker than expected 178K gain in hiring versus the projected 187K figure but the previous reading saw a large upgrade from 159K to 191K. Challenger job cuts and the ISM non-manufacturing PMI are due today.

EUR

The euro carried on with its climb to the dollar but at a slower pace. The Spanish unemployment change report showed a smaller than expected 26.9K drop in joblessness versus the projected 66.5K drop and the earlier 98.3K reduction. Final services PMI readings are due today, along with the region's retail sales figure.

GBP

The pound struggled to hold its ground after the UK construction PMI posted a steeper than expected fall from 54.8 to 51.9. The BOE is set to make their policy statement today and also release its MPC meeting minutes. Three members voted for a hike in the previous meeting so traders are eager to find out if this hawkish bias is sustained. The BOE Inflation Report and UK services PMI are also lined up.

CHF

The franc had a mixed run but was mostly in a weak spot against its counterparts. The SECO consumer climate index improved from -8 to -3 while Swiss retail sales posted a stronger than expected 1.5% year-over-year rebound. The manufacturing PMI was also stronger than expected as it rose from 60.1 to 60.9 instead of falling to 58.9. There are no reports due from the Swiss economy today.

JPY

The yen also had a mixed round as it reacted to market sentiment and currency-specific factors. There were no reports out of Japan then and none are due today so global bond yields and overall risk sentiment could continue pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)

The EIA reported a draw of 1.5 million barrels in crude oil stockpiles, smaller than the estimated reduction of 3.2 million barrels but a draw nonetheless. Comdolls were a bit weaker for the day as risk aversion was in play for the most part. Earlier today, Australia reported a weaker than expected trade surplus of 0.86 billion AUD.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 04, 2017)

PostPosted: Fri Aug 04, 2017 4:44 am
by katetrades
USD

The US dollar had a mixed run as it reacted to currency-specific events. Traders seemed hesitant to take large positions ahead of the NFP release since leading indicators have been hinting at a slowdown in hiring. The ISM non-manufacturing PMI fell from 57.4 to 53.9 while the Challenger job cuts report showed a larger 37.6% drop in layoffs. Analysts are expecting to see a 181K increase in hiring for July, enough to bring the jobless rate down from 4.4% to 4.3%. Average hourly earnings could post a stronger 0.3% uptick.

EUR

The euro continued its rally against most of its counterparts even as final services PMI readings turned out mixed. The readings from Spain and Germany saw downgrades while Italy reported an upgrade. German factory orders, Italian retail sales, and the region's retail PMI are due next.

GBP

The pound suffered a sharp selloff after the BOE statement as fewer policymakers voted to hike rates compared to last time, signaling a shift to a less hawkish bias. The central bank also downgraded its growth forecast while maintaining its positive outlook on inflation. There are no reports due from the UK economy today.

CHF

The franc was still in a weak spot against most of its counterparts, mostly due to the SNB's dovish stance and the threat of central bank intervention. There were no reports out of the Swiss economy yesterday and none are due today so market sentiment and SNB expectations could stay in play.

JPY

The Japanese yen was able to take advantage of dollar weakness and risk aversion even as Japanese average cash earnings data printed a weaker than expected 0.4% drop versus the projected 0.5% gain. There are no other reports due from Japan for the rest of the day so yen pairs could take their cues from bond yields and the NFP release.

Commodity Currencies (AUD, NZD, CAD)

Risk-off flows dampened gains for the commodity currencies as shifting policy biases weighed on sentiment. Australia reported a smaller than expected trade surplus of 0.86 billion AUD compared to the estimated 1.78 billion AUD figure while previous reading was downgraded. Earlier today, Australian retail sales beat expectations with a 0.3% gain. Canada will release its jobs report next and might show weaker hiring growth of 11.7K compared to the previous 45.3K increase.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (August 7, 2017)

PostPosted: Mon Aug 07, 2017 3:18 am
by katetrades
USD

The US dollar got a boost upon seeing stronger than expected July NFP data. The economy added 209K jobs during the month versus the estimated 187K gain while the June reading enjoyed an upgrade to 231K. Average hourly earnings came in line with expectations of a 0.3% uptick while the jobless rate dipped to 4.3% as expected. Only the Fed labor market conditions index is due today, along with a speech by dovish FOMC member Kashkari.

EUR

The euro returned some of its gains to its peers on profit-taking at the end of the week. Data from the euro zone was actually better than expected as German factory orders surged 1.0% versus the projected 0.6% increase while Italian retail sales printed a higher than expected 0.6% increase. German industrial production data and the region's Sentix investor confidence index are lined up next.

GBP

The pound held its ground against some of its rivals at the end of the week as traders booked profits off their post-BOE short positions. There were no major reports out of the UK economy on Friday and today has the Halifax HPI lined up. Analysts are expecting to see a 0.3% rebound in house prices.

CHF

The franc had a mixed run as it mostly reacted to currency-specific factors. There were no reports out of the Swiss economy on Friday while today has the SNB foreign currency reserves data due. An increase from the earlier 693B CHF reading could be evidence of central bank intervention. The CPI is also lined up and a 0.3% drop in price levels is eyed.

JPY

The yen gave up some ground to its peers when US bond yields ticked higher after the NFP release. Data from Japan was also weaker than expected then as average cash earnings fell 0.4% versus the estimated 0.5% gain. Leading indicators data is due next and an improvement from 104.6% to 106.2% is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls returned some of their recent gains to the dollar on Friday. Canada reported a 10.9K gain in hiring versus the projected 13.1K increase and the earlier 45.3K jump. Their unemployment rate fell from 6.5% to 6.3% on weaker labor force participation while the trade balance also disappointed. The Ivey PMI, on the other hand, printed a smaller dip from 61.6 to 60.0 versus the projected 59.2 reading.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 08, 2017)

PostPosted: Tue Aug 08, 2017 4:47 am
by katetrades
USD

The US dollar was off to a slow start for the week as there were no major reports released. Two Fed officials shared their thoughts on future policy moves, with both Kashkari and Bullard urging to start the balance sheet runoff soon since this won't harm the markets. US consumer credit shrank from $18.3 billion to $12.4 billion. The NFIB small business index is due, along with the JOLTS job openings data and IBD/TIPP Economic Optimism index.

EUR

The euro retreated against most of its counterparts as traders started having doubts on ECB tapering. German industrial production was weaker than expected with a 1.1% fall versus the projected 0.2% uptick. German and French trade balance are due next and upbeat results could lift the shared currency once more.

GBP

The pound was still on weak footing as traders continued adjusting their portfolios to the less hawkish BOE bias and Brexit concerns. The Halifax HPI posted a larger than expected 0.4% gain versus the projected 0.3% uptick. There are no reports due from the UK economy today.

CHF

The franc also tumbled to most of its peers as the SNB foreign currency reserves figure grew from 694 billion CHF to 714 billion CHF, hinting that the central bank may be increasing its forex holdings to keep the franc weak. Swiss CPI posted the estimated 0.3% drop in price levels, following the earlier 0.1% downtick. Swiss jobless rate is due today and no changes from the earlier 3.2% reading is expected.

JPY

The yen regained some ground to its peers as tensions with North Korea drove demand for safe-havens. Japan's leading indicators improved from 104.6% to 106.3%, slightly higher than the 106.2% consensus. The country's current account surplus also widened from 1.40T JPY to 1.52T JPY. The Economy Watchers Sentiment index is due next.

Commodity Currencies (AUD, NZD, CAD)

The comdolls advanced against most of their European counterparts while struggling to the dollar and yen. New Zealand's quarterly inflation expectations figure slipped from 2.2% to 2.1% while Canadian banks were closed for the holiday. China's trade balance is up for release next and no changes are eyed.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 09, 2017)

PostPosted: Wed Aug 09, 2017 3:19 am
by katetrades
USD

The US dollar staged a strong rally after seeing another round of upbeat medium-tier data. The JOLTS job openings figure came in at a record high of 6.16 million, signaling plenty of hiring opportunities and a likely pickup in employment in the coming months. The NFIB Small Business Index and the IBD/TIPP Economic Optimism Index also came in stronger than expected. Final wholesale inventories, preliminary non-farm productivity, and unit labor costs are lined up next.

EUR

The euro retreated to the dollar and yen but managed to advance against commodity currencies as risk appetite weakened. German and French trade balance came in slightly higher than expected to support ECB tapering speculations. Only the Italian industrial production report is due today and analysts are expecting to see a 0.2% uptick.

GBP

The pound was weighed down by risk aversion and Brexit jitters since there were no major reports to keep it supported. There are still no reports due from the UK economy today so it's likely that market sentiment could push pound pairs around.

CHF

The franc gave up more ground to the dollar even after the Swiss jobless rate came in line with expectations at 3.2%. It managed to hold its ground against its other rivals since risk-off flows also tend to support the Swiss currency. There are no reports due from Switzerland today.

JPY

The yen was the biggest winner for the day as it benefitted from risk aversion stemming from the tension with North Korea. The hermit nation has threatened to launch a missile strike on the nearby U.S. territory of Guam. Japanese preliminary machine tool orders are up for release but all eyes and ears are on U.S. and North Korea.

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up a lot of ground as risk aversion returned to the markets. Traders are also pricing in downbeat expectations for the RBNZ decision as hiring and inflation have been weak for the past quarter. Australia reported a 1.2% drop in Westpac consumer sentiment data while Chinese CPI fell short of estimates at 1.4% versus 1.5%. The API reported another large draw in crude oil stockpiles so traders are waiting to see if the EIA report will follow suit.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 10, 2017)

PostPosted: Thu Aug 10, 2017 3:19 am
by katetrades
USD

The US dollar raked in some gains on risk-off flows but returned some of these when markets calmed down. Data indicated that wage pressures could remain subdued as unit labor costs posted a weaker than expected 0.6% uptick versus the projected 1.1% climb while non-farm productivity picked up. Initial jobless claims and PPI are due today, along with a speech by FOMC member Dudley.

EUR

The euro had a mixed run as it acted as a safe-haven in Europe but weakened to the likes of the yen and dollar. Italy reported a stronger than expected industrial production figure of 1.1% versus the projected 0.2% uptick. French industrial production and Italian trade balance are due next.

GBP

The pound also had a mixed run but was mostly weaker to the euro and the franc. There were no reports out of the UK economy yesterday while today has the manufacturing production and goods trade balance due. These are considered leading indicators of growth and might have a strong impact on pound direction, especially if reports come in weaker than expected.

CHF

The franc carried on with its strong risk-off rally but paused later on in the day as traders grew wary of SNB intervention again. There were no reports out of the Swiss economy yesterday and none are due today so market sentiment related to the North Korean situation could push franc pairs around.

JPY

The yen was also a big winner thanks to risk-off flows from North Korea's missile threats but it also paused from its rally on profit-taking towards the end of the US session. Japanese core machinery orders posted a weaker than expected 1.9% slide versus the estimated 3.6% rebound while PPI came in stronger than expected at 2.9%.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest of the bunch as risk-taking was dampened by threats of a strike from North Korea. Crude oil ticked slightly higher when the EIA report printed a larger than expected draw of 6.5 million barrels but the Loonie failed to draw much support. The RBNZ kept interest rates on hold at 1.75% as expected while signaling the need for a lower NZD.

By Kate Curtis from Trader's Way

Forex Major Currencies Outlook (Aug 11, 2017)

PostPosted: Fri Aug 11, 2017 2:49 am
by katetrades
USD

The US dollar was in a weak spot against its peers, weighed down by weak PPI, downbeat Fed rhetoric, and threats from North Korea. US equity indices chalked up large losses for the day as investors are starting to get worried about an actual strike from Pyongyang while Trump refuses to take a more diplomatic stance. Headline and core PPI fell 0.1% and the CPI readings are due today.

EUR

The euro was unable to make much headway after seeing a miss in French industrial production. The report chalked up a 1.1% drop versus the estimated 0.6% dip but the Italian trade balance managed to beat forecasts. Final CPI readings from Germany and France are due today so upgrades or the lack of downgrades could still be a plus for the shared currency.

GBP

UK economic reports turned out mixed as manufacturing production came in line with estimates, the goods trade balance printed a larger deficit, and the industrial production report beat expectations. Traders still seem to be seeing some signs of resilience in the economy and the lack of top-tier UK data today could keep this sentiment in place.

CHF

The franc was able to score some gains on risk-off moves even as traders are wary of SNB intervention. There were no reports out of the Swiss economy then and none are due today so market sentiment could keep pushing franc pairs around.

JPY

The yen was the consistent winner for the day since it took its share of the dollar's safe-haven flows. Core machinery orders saw a worse than expected 1.9% drop while PPI jumped from 2.2% to 2.6%, keeping positive inflation expectations supportive of yen gains. Japanese banks are closed for the holiday today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls continued to reel from risk aversion as traders moved their holdings to safe-havens in light of the tension with North Korea. The Kiwi also got dragged lower during RBNZ head Wheeler's speech when he threatened currency intervention if NZD keeps rallying. There are no major reports due from the comdoll economies for the rest of the day so market sentiment could be the main driver.

By Kate Curtis from Trader's Way