Forex Major Currencies Outlook (Apr 05, 2016)

Factory orders turned out weaker than expected with a 1.7% decline versus the projected 1.5% fall while the labor market conditions index rose from -2.5 to -2.1. For today, the US trade balance and ISM non-manufacturing PMI are up for release.

EUR

The euro was able to score some gains against the comdolls and the dollar despite mixed data from the region. Spain's unemployment change figure showed a large reduction in joblessness of 58.2K versus the projected 28K gain while the euro zone Sentix investor confidence index rose from 5.5 to 5.7, short of the estimated climb to 6.9. German factory orders and services PMI readings from Spain and Italy are due today. 

GBP

The pound was able to recover against its peers when the UK construction PMI came in line with expectations and held steady at 54.2. The services PMI is due today and a rise from 52.7 to 53.9 is expected, with stronger than expected data likely to yield more gains for the UK currency. 

CHF

The franc was supported by risk aversion but its gains were limited when SNB head Thomas Jordan acknowledged the possibility of negative interest rates. There were no reports out of Switzerland yesterday and none are due today. 

JPY

The yen gained ground against the commodity currencies and the dollar when risk aversion came back in play. Average cash earnings in Japan showed a 0.9% gain versus the projected 0.2% uptick and the previous flat reading. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls retreated from their rallies when news of Saudi Arabia blocking Iranian oil shipments broke out. Crude oil fell below $36/barrel on these reports, weighing on the oil-related Loonie. In New Zealand, the NZIER business confidence index slumped from 15 to 2 while ANZ commodity prices showed a 1.3% drop. The RBA statement and Australian trade balance are lined up next while NZ will have a dairy auction later on. 

By Kate Curtis from Trader's Way