Forex Major Currencies Outlook (Sept 8, 2014)

The economy added only 142K jobs in August versus the estimated 226K in hiring gains. Meanwhile, the jobless rate still managed to improve from 6.2% to 6.1% while average hourly earnings saw a 0.2% uptick as expected. There are no major reports due from the US economy for today, which suggests that market sentiment might continue to push dollar pairs around.

EUR

The euro edged lower to most of its major counterparts towards the end of the trading week, as traders adjusted positions to the ECB easing announcements. German industrial production was stronger than expected at a 1.9% gain versus the projected 0.5% uptick but the euro was barely able to gain from this release. German trade balance and euro zone Sentix investor confidence data is due today and more signs of weakness might drive the euro lower.

GBP

The pound had a sharp gap lower against its counterparts in the start of this week’s trading as the possibility of Scottish independence spelled downbeat prospects for the UK economy. Consumer inflation expectations saw an improvement from 2.6% to 2.8% but did very little to support the pound. UK Halifax HPI is due today and it might print a 0.2% uptick.

CHF

The franc lost a lot of ground recently as traders speculated about a potential currency intervention from the SNB, now that EURCHF is edging closer to its 1.2000 floor. Swiss CPI, retail sales, and jobless rate are all due today and weak data might push the franc lower. The CPI might show a 0.1% decline in prices while retail sales could improve from 3.4% to 3.7%. The jobless rate is slated to stay unchanged at 3.2% for the time being.

JPY

Yen pairs gapped down over the weekend but most gaps have been filled except for GBPJPY. Japanese current account was weaker than expected but the final GDP was unchanged at -1.8% as expected. Japan’s Economy Watchers sentiment report is due today and a downturn in confidence might be negative for the yen.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to extend their gains recently as most traders booked profits off their trades. New Zealand quarterly manufacturing sales slipped by 1.9% for the previous quarter, following a flat reading. Chinese trade balance was stronger than expected, giving the Aussie a bit of a boost. Meanwhile, the weaker than expected Canadian jobs release and Ivey PMI are currently weighing on the Loonie. Hiring fell by 11K instead of increasing by the estimated 10.3K while the manufacturing PMI slipped from 54.1 to 50.9. Canadian building permits is due today.

By Kate Curtis from Trader's Way