Forex Major Currencies Outlook (Dec 09, 2016)

Initial jobless claims came in line with expectations at 258K. The preliminary UoM consumer sentiment index is up for release today and a rise from 93.8 to 94.3 is expected.

EUR

The euro tossed and turned during the ECB statement and press conference, as the reduction of monthly bond purchases lifted the shared currency but the extension of the end-date to December next year and the possibility of pushing this deadline much further forced a larger drop. ECB staff upgraded forecasts for next but Draghi cited that these estimates are different from their targets, suggesting that more easing action could be in the cards. German trade balance and French industrial production numbers are due.

GBP

The pound also tanked to most of its counterparts even though there were no major reports out of the UK. Today has the goods trade balance and construction output report due, with the former slated to show a smaller deficit of 11.9 billion GBP and the latter expected to print a 0.2% uptick.

CHF

The franc sold off against most of its peers, except against the euro. There were no reports out of the Swiss economy then while today has the unemployment rate on tap. No change from the earlier 3.3% figure is eyed and the franc might function as a counter currency once again.

JPY

The yen resumed its slide against its counterparts as the ECB announcement led traders to anticipate some form of easing from the BOJ as well. Data from Japan has been mostly weaker than expected, with the Q3 GDP downgraded from 0.6% to 0.3% although medium-tier reports such as the BSI manufacturing index and M2 money stock beat expectations.

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of euro and yen weakness but caved to dollar strength. Australia and China printed weak headline trade figures but components showed gains in both imports and exports. China's inflation numbers were mixed, as the CPI beat expectations with a 2.3% reading while PPI fell short at only 1.5%.

By Kate Curtis from Trader's Way