Forex Major Currencies Outlook (April 22, 2014)

Financial markets are reopening today and traders will return to their desks, leading to some movement among major pairs. US existing home sales and Richmond manufacturing index are on the docket today, with home sales expected to be lower and the manufacturing index likely to show an improvement.

EUR

The euro was ahead of the pack in terms of establishing direction for the week, as EUR/USD started breaking lower in yesterday’s New York trading session. Perhaps traders are starting to price in the prospect of additional easing from the ECB or expectations of bleak PMI data today. Germany and France are set to release their manufacturing and services PMI figures and possibly show small upticks, but weaker than expected figures could push the euro lower.

GBP

The pound continued to consolidate around the 1.6800 area to the dollar, waiting for a convincing market catalyst for a break higher or lower. There are no major reports due from the UK today so pound pairs might keep consolidating until the BOE meeting minutes are released later on this week.

CHF

The franc resumed its selloff to the dollar yesterday but managed to score gains against the euro. There have been no reports released from Switzerland recently and none are due today, which suggests further consolidation or currency-specific reactions from franc pairs.

JPY

Yen pairs saw a bit of action in recent trading as a news report indicated that the Japanese government is considering loosening lending restrictions in the country. The government is mulling about lowering the rate ceiling on loans in order to give small businesses better access to funding, possibly as an effort to compensate for the drag caused by the sales tax hike this month. Trade balance came in weaker than expected over the weekend, lending to yen weakness.

Commodity Currencies (AUD, NZD, CAD)

The comdolls regained ground in recent trading, particularly the Aussie which drew support from a 0.3% uptick in its February leading index. Canadian wholesale sales are due in today’s New York trading session and a 0.7% increase is eyed. Later on, New Zealand will release data on visitor arrivals and probably show another strong increase.

By Kate Curtis from Trader's Way