Forex Major Currencies Outlook (June 10, 2014)

There have been no major reports released from the US economy yesterday while today has the JOLTS job openings and wholesale inventories data on tap. Both of these reports aren’t expected to have a huge impact on the US dollar, which might be driven mostly by risk sentiment throughout the day.

EUR

The euro suffered another sharp selloff at the start of the week, as traders digested the longer-term impact of the recent ECB easing announcement on the shared currency. Only the Sentix investor confidence index was released from the euro zone yesterday and this showed a weaker than expected reading of 8.5 versus the estimated 13.5 figure. For today, French and Italian manufacturing production numbers are due. Weaker than expected readings could lead to more euro weakness.

GBP

The pound was able to hold on to most of its recent gains as there were no reports released from the UK economy yesterday. Manufacturing production data is due today and a 0.4% uptick is expected to follow the previous 0.5% increase. A stronger than expected result might lead to more pound gains while a bleak reading could force it to return its recent wins.

CHF

The franc gave up most of its gains in recent trading as investor confidence fell sharply in the euro zone. Today, Switzerland will report its retail sales figure and possibly show a 2.2% annual reading, lower than the previous 3.0% figure. An even weaker than expected reading could lead to more franc weakness.

JPY

The yen had a mixed performance as it raked in huge gains to the euro but lost ground to the Aussie and consolidated against the Loonie. Data from Japan came in mixed over the weekend and yesterday’s consumer confidence release showed a stronger than expected result. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made decent recoveries in recent trading, with the Aussie, Kiwi, and Loonie advancing to the yen and dollar. This was spurred by positive risk sentiment and strong data from China, plus a better than expected housing starts figure from Canada. Earlier today, Australian data came in mixed as NAB business confidence held steady while home loans stayed flat. ANZ job advertisements slipped by 5.6% while the previous figure was downgraded. However, Chinese CPI came in stronger than expected and may be hinting of a pick up in the world’s second largest economy. There are no reports due from New Zealand and Canada today.

By Kate Curtis from Trader's Way