Forex Major Currencies Outlook (May 9, 2014)

EUR

The euro had a volatile time during the ECB interest rate decision and press conference but eventually settled lower to most of its major counterparts. The ECB refrained from making an actual monetary policy adjustment but Draghi hinted that they could make a move in June if the CPI forecasts to be released earlier that month come in weak. Only medium-tier data are up for release from the euro zone today and this might not be enough to stop the shared currency’s selloff.

GBP

The pound retreated to most of its counterparts in the latest trading sessions when the BOE didn’t turn out to be as hawkish as some expected. Traders might need to wait for the minutes of the meeting to be released before understanding the monetary policy bias of the UK central bank and whether they’re ready to hike before the UK general elections, as Carney hinted. UK manufacturing production numbers are up for release today and a 0.3% uptick is eyed to follow the previous 1.0% increase.

CHF

The franc gave up its recent gains to the dollar when volatility picked up in the US trading session. Swiss CPI came in line with expectations of a 0.1% uptick but the SECO consumer climate fell from 2 to 1 instead of improving to 3 as expected. No reports are lined up from Switzerland today so it could be range-bound behavior for most Swissy pairs.

JPY

The yen had a mixed performance in recent trading sessions, as the lack of data from Japan left the currency reactive mostly to risk sentiment. The currency lost ground to the comdolls but gained against the euro, pound, and the US dollar. There are still no reports lined up from Japan today so more risk moves could be seen among yen pairs.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a bit of a rebound in recent trading, as the Kiwi and Aussie staged recoveries from their recent losses. The Australian dollar got a stronger boost from upbeat jobs figures, as the economy added 14.2K jobs and kept the unemployment rate steady at 5.8%. Chinese trade balance also gave the Aussie support throughout most of the trading day. However, Chinese CPI came in slightly weaker today yet the Aussie remained steady. Canadian jobs data are due in today’s US trading session and an employment change figure of 12.8K is expected.

By Kate Curtis from Trader's Way