Forex Major Currencies Outlook (May 1, 2015)

Initial jobless claims came in better than expected at 262K versus the estimated 290K figure while the quarterly employment cost index also showed a stronger than expected increase of 0.7%. The core PCE price index, which is the Fed’s preferred inflation measure, posted a weaker than expected 0.1% uptick while personal spending and personal income data fell short. US ISM manufacturing PMI is up for release today and a climb from 51.5 to 52.1 is expected.

EUR

The euro managed to extend its gains to its forex counterparts, despite mixed reports from the euro zone. German retail sales came in weaker than expected with a 2.3% decline versus the projected 0.5% rebound while the unemployment change showed a smaller than expected 8K decline. The euro zone headline CPI estimate was flat at 0.0% as expected while the core CPI estimate was unchanged at 0.6%. There are no reports lined up from the euro zone today.

GBP

The pound stalled in its recent climb to its forex rivals, as there were no reports released from the UK economy. Today has the manufacturing PMI on tap and a small improvement from 54.4 to 54.6 is eyed. Stronger than expected data could allow the pound to resume its climb while a weak reading could spur more losses for pound pairs.

CHF

The franc consolidated after its recent rallies, as traders are awaiting more clues from the Swiss economy. The KOF economic barometer came in weaker than expected at 89.5, down from the previous 90.5 reading and lower than the projected 91.6 figure. For today, there are no economic reports lined up from the Swiss economy and more consolidation could be seen.

JPY

The yen printed a few stronger than expected readings in today’s Asian trading session, allowing yen pairs to bounce back and risk appetite to take hold. Household spending showed a smaller than expected 10.6% slide versus the projected 11.7% drop while the national core CPI climbed from 2.0% to 2.2%. The unemployment rate also improved from 3.5% to 3.4%, although average cash earnings showed a mere 0.1% uptick.

Commodity Currencies (AUD, NZD, CAD)

The Kiwi was in a weak spot for most of the day, as the RBNZ indicated that they could still cut rates if needed. Canada posted better than expected monthly GDP data with a flat reading instead of the estimated 0.1% contraction. In Australia, the PPI showed a better than expected 0.5% uptick. No other reports are lined up from these economies today.

By Kate Curtis from Trader's Way