Forex Major Currencies Outlook (April 9, 2013)

There are no reports due from the U.S. once more, which suggests possible quiet trading for the New York session. Do keep close tabs on Q1 earnings reports though as this could affect U.S. equities and overall market sentiment. Take note that fundamentals have been driving the dollar lately and that weak earnings reports could put the dollar back on its downtrend.

EUR

 Minor euro zone reports came in mixed during yesterday’s trading as the Sentix investor confidence figure fell below consensus while the German industrial production report in strong. Investor confidence dipped from -10.6 to -17.3 in April, reflecting increased pessimism in the euro zone region. Meanwhile, Germany’s industrial production rose by 0.5% in February while the previous month’s figure suffered a downward revision from 0.0% to -0.6%. There are no major reports due from the euro zone today.

GBP

 The pound retraced from its recent gains against the U.S. dollar on Monday as the 1.5350 minor psychological level acted as resistance for the pair. Today’s U.K. data could push GBP/USD back on an uptrend if the actual figures come in strong. The manufacturing production report could show a 0.4% rebound from the 1.5% drop seen before while the trade deficit is expected to widen from 8.2 billion GBP to 8.7 billion GBP.

CHF

 USD/CHF stayed mostly in consolidation during yesterday’s trading sessions as the pair was able to keep its head below the .9400 handle. Today’s Swiss reports could determine whether the pair will bounce back up .9400 or head further south. Switzerland will print its monthly CPI figure and possibly show another 0.3% uptick and will also release its latest retail sales report, which is expected to jump by 2.9% on a year-to-year basis.

JPY

 Once again, the Japanese yen continues to lose ground against its major counterparts as the BOJ’s aggressive easing measures will have a long-term effect on their currency. Analysts are saying that USD/JPY could reach 100.00 as early as this week, with a potential target of 110.00 in the longer-term. Only the monetary policy meeting minutes were released from Japan today and this didn’t have such a huge impact on yen action as the selloff remains underway.

Commodity Currencies (AUD, CAD, NZD)

 Commodity currencies appear poised to test significant inflection points as AUD/USD is on its way back to 1.0500 while NZD/USD is testing .8500. Earlier today, New Zealand printed an improvement in its NZIER business confidence as the figure climbed from 20 to 23 in the first quarter of the year. Chinese CPI is due later today and would probably result in a quick selloff if the actual figure comes in below 2.5%, which is already lower than the previous 3.2% reading. Keep an eye out for the release of Canadian building permits and housing starts during the New York session as this could determine whether USD/CAD will stay on its downtrend or not.

By Kate Curtis from Trader's Way