Forex Major Currencies Outlook (April 3, 2014)

The actual figure showed a 191K increase in payrolls, leading traders to price in a good NFP release for Friday. The previous month’s figure also enjoyed an upward revision, which spells good prospects for the US labor market. The factory orders reported printed a stronger than expected 1.6% increase versus the estimated 1.3% gain. US initial jobless claims and ISM non-manufacturing PMI are up for release today.

EUR

The euro lost ground to the dollar in recent trading, as the US economy printed strong data. The shared currency lost ground to its other counterparts as well, despite better than expected Spanish jobs data. This was because euro zone final GDP was revised down from 0.3% to 0.2%, indicating that growth in the region was weaker than initially reported. The ECB rate decision is scheduled today and this should show whether the central bank is ready to ease further or not.

GBP

The pound saw another round of weakness yesterday when the construction PMI came in weaker than expected. The figure dipped from 62.6 to 62.5 instead of improving to 63.1, but the selloff was not so bad since traders are still waiting for the services PMI to be released today. The figure is expected to hold steady at 58.2 but another weak reading might lead to a deeper pound selloff. Earlier today BOE Governor Carney was quoted saying that a rate hike might take place before the general elections, leading to pound strength.

CHF

The franc gave up most of its recent gains to its counterparts as there were no reports from Switzerland to give it support yesterday. There are still no reports due from Switzerland today which suggests that franc pairs could be more sensitive to currency-specific data.

JPY

The yen recovered a bit against most of its counterparts as some traders booked profits off key resistance levels. There have been no reports released from Japan yesterday and none are due today, suggesting that yen pairs might be sensitive to risk sentiment for the rest of the week.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were no match to the dollar in recent trading, as AUD and NZD extended their losses. Data from Australia was mixed today, as the retail sales release came in weak but the trade balance report showed a stronger than expected surplus. Canadian trade balance is due in today’s US trading session and the previous 0.2 billion CAD deficit is expected to turn into a 0.2 billion CAD surplus.

By Kate Curtis from Trader's Way