Forex Major Currencies Outlook (June 25, 2014)

There were no major reports released from the US economy except for the CB consumer confidence and new home sales report, which both came stronger than expected. For today, durable goods orders and final GDP data are due. Recall that the US GDP had been downgraded to show a 1.0% contraction in the first quarter and a deeper contraction of 1.8% might be shown and lead to a dollar selloff.

EUR

The euro seemed immune to bleak figures, as the German Ifo business climate report came in below expectations but failed to usher in more euro weakness. The index fell from 110.4 to 109.7 instead of just dipping to 110.3. German GfK consumer climate data is due today and an improvement from 8.5 to 8.6 is eyed, although it is unlikely. Weaker than expected data could lead the euro selloff to resume.

GBP

The pound returned most of its recent gains when BOE Governor Carney didn’t sound so hawkish in the latest BOE inflation report hearings. Some officials noted that he is giving mixed signals, but the BOE head clarified that he is simply taking his cues from economic data. Lower expectations of a rate hike for this year have been priced in, but the fact remains that the BOE is considering reducing its stimulus sooner or later.

CHF

The franc was able to take advantage when higher-yielders retreated in recent trading sessions. There have been no reports released from Switzerland then and only the UBS consumption indicator is due today. An improvement from the previous 1.72 reading could lead to more franc gains while weak data could force the selloff to return.

JPY

The yen was able to advance when risk appetite pulled back in recent trading sessions but traders still seemed unimpressed with the BOJ’s monetary policy stance. There have been no reports released from Japan then and none are due today, which suggests that yen pairs could be sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls also took a turn for the worse in recent trading when risk appetite retreated. There have been no reports released from Australia, New Zealand and Canada then and none are due today, which means that sentiment could continue to dictate the movement of these higher-yielders.

By Kate Curtis from Trader's Way