Forex Major Currencies Outlook (May 29)

Initial jobless claims data came in below expectations, showing a 282K increase versus the estimated 271K gain. Pending home sales came in better than expected though, as the report printed a 3.4% rise versus the projected 0.8% uptick. The US preliminary GDP reading is up for release today and the initially reported 0.2% expansion might be downgraded to show a 0.8% contraction. Also lined up today are the Chicago PMI and preliminary consumer confidence index from the University of Michigan.

EUR

The euro recovered to its currency counterparts in recent trading sessions, as traders still crossed their fingers that Greece can avoid defaulting on its loans. Data from the euro zone came in better than expected, with German import prices showing a larger than expected 0.6% increase. For today, German retail sales, French consumer spending, and Spanish preliminary GDP data are due.

GBP

The pound sold off slightly against some of its rivals when the UK GDP stayed unchanged at 0.3% during the release of the second estimate. Analysts had been expecting to see an improvement to 0.4%. GfK consumer confidence was also subpar, as the reading fell from 4 to 1 instead of holding steady as expected. There are no reports due from the UK today.

CHF

The franc managed to recover from its recent tumble, after the Swiss trade balance came in better than expected and showed a wider surplus of 2.86 billion CHF versus the projected 2.77 billion CHF surplus. Swiss GDP is due today and a flat reading is eyed. Also lined up is the Swiss KOF economic barometer, which might show a climb from 89.5 to 90.1.

JPY

The yen struggled to regain ground in recent trading sessions, getting an additional boost from today’s set of data. The national core CPI came in stronger than expected with a 0.3% uptick versus the projected 0.2% increase, still lower than the previous 2.2% reading, while the unemployment rate improved from 3.4% to 3.3%. Tokyo core CPI came in line with expectations of a 0.2% increase while household spending still disappointed with a 1.3% decline.

Commodity Currencies (AUD, NZD, CAD)               

The comdolls were in a much weaker spot in recent trading, as Austraila and New Zealand printed weak data. In Australia, the private capital expenditure report showed a worse than expected 4.4% slide for the first quarter. In New Zealand, Fonterra announced a milk payout forecast downgrade, which means lower earnings for dairy farmers. Canada’s current account balance came in better than expected, shielding the Loonie from worse losses. Earlier today, New Zealand reported a drop in its ANZ business confidence index from 30.2 to 15.7. Canadian monthly GDP is due later today and a flat reading is eyed for March.

By Kate Curtis from Trader's Way