Forex Major Currencies Outlook (July 11, 2013)

Not all policymakers agree that the central bank should start reducing the level of its bond purchases by the end of the year, as improvements in the labor market are not that significant enough. USD/JPY fell back below the 100.00 level while EUR/USD climbed above the 1.3000 handle. The initial jobless claims release is the only event from the US today. 

EUR 

The euro was able to stage a successful rebound against the dollar in yesterday’s trading, as the FOMC minutes turned out to be a bit of a surprise. As for data, medium-tier reports printed weaker than expected results, with the French industrial production report showing a 0.4% decline. Manufacturing production also posted a decline while their current account deficit widened. More medium-tier reports are due from the euro zone today but this might not be enough to derail EUR/USD from its recent rallies. 

GBP 

The pound recovered against the US dollar in yesterday’s trading, as the FOMC minutes disappointed the dollar bulls. There were no reports released from the UK and none are due for today. The only event on the UK schedule is the speech by MPC member Miles, and this should shed some light on whether he supports Carney’s pledge of keeping monetary policy loose for the foreseeable future. 

CHF 

The franc rallied against the Greenback in yesterday’s trading, pushing USD/CHF down by more than 300 pips. There were no reports printed from Switzerland then and none are due today, leaving USD/CHF vulnerable to dollar behavior. 

JPY 

The yen managed to pocket huge gains against the US dollar yesterday, eventually pushing USD/JPY down the 100.00 level and back to the 98.50 area of interest. Earlier today, the BOJ had its monetary policy announcement and Governor Kuroda made no changes to its current level of easing.

Commodity Currencies (AUD, NZD, CAD) 

The commodity currencies outpaced the Greenback yesterday, with USD/CAD breaking below the 1.0500 barrier and AUD/USD climbing back above .9200. New Zealand’s manufacturing index showed a drop in industry activity but this wasn’t enough to derail the Kiwi’s rally against the dollar. Australia’s jobs report came in mixed, with a better than expected employment change reading of 10.3K but a worse than expected jobless rate of 5.7%. No other reports are due from the comdoll economies in the upcoming trading sessions. 

By Kate Curtis from Trader's Way