Forex Major Currencies Outlook (Feb 24, 2015)

Although a four-month extension has been granted, EU officials have yet to approve the latest list of reforms passed by the Greek government and these are due today. Data from the US was weaker than expected yesterday, as the existing home sales figure fell from 5.07M to 4.82M. Today, the CB consumer confidence index is due and a drop from 102.9 to 99.6 is eyed. Also lined up for today is Fed head Yellen’s testimony, which should shed more light on the central bank’s policy bias.

EUR

The euro gave up its gains from last Friday, as the anti-austerity Greek government didn’t pass its list of reforms to the EU yet. Greece is set to submit its proposals today and these are still up for approval by their creditors, keeping euro gains in check for the time being. Data from Germany was weaker than expected yesterday, as the Ifo business climate index climbed from 106.7 to 106.8, short of the consensus at 107.4. Euro zone final CPI readings are also due today, along with ECB Governor Draghi’s speech. 

GBP

The pound managed to stay strong in recent trading, despite weaker than expected UK data. The CBI realized sales index slipped from 39 to 1 instead of improving to 42, indicating a drop in consumer spending. Inflation report hearings are scheduled today and more optimistic remarks on the UK economic recovery could keep the pound afloat. 

CHF

The franc had a bit more action in recent trading, although it lost ground to most of its counterparts. There have been no reports released from Switzerland but it seems that franc traders are anticipating euro declines and a potential intervention move from the SNB. The Swiss employment level reading is due today and a drop from 4.23M to 4.22M is expected. 

JPY

The yen was stuck in consolidation for the most part, as traders are sitting on the edge of their seats and awaiting more data from Japan later this week. Risk sentiment has been uneasy as well, with market watchers still figuring out what might happen if Greece defaults on its debt.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi got a boost in yesterday’s Asian trading session when financial institutions started projecting Fonterra milk price upgrades later this week. Quarterly inflation expectations in New Zealand fell from 2.1% to 1.8% though, forcing the Kiwi to return its recent wins. News that the OPEC might call for an emergency meeting to cut oil production soon also supported the Loonie for a while. No other reports are lined up from the comdoll economies today, but BOC Governor Poloz is set to give a speech and might lead to Loonie volatility. 

By Kate Curtis from Trader's Way