Forex Major Currencies Outlook (Nov 10, 2014)

Hiring picked up by 214K when analysts were expecting to see a 235K gain, although the jobless rate improved from 5.9% to 5.8% in the same month. Underlying labor components also showed improvements, as the participation rate stabilized while the under-employment rate ticked lower. Wage growth remains a concern, as average hourly earnings marked a mere 0.1% gain instead of the expected 0.2% increase. For today, there are no major reports up for release from the US. 

EUR 

The euro took advantage of dollar weakness in recent trading, as data from the euro zone wasn’t all disappointing. The German industrial production figure fell short of expectations with a mere 1.4% gain instead of the estimated 2.1% rebound while the French industrial production saw a flat reading instead of the projected 0.1% decline. Italian industrial production and euro zone Sentix investor confidence data are up for release today. 

GBP

The pound made a strong recovery to the dollar on Friday, even though UK data was weaker than expected. The trade deficit widened from 9.0 billion GBP to 9.8 billion GBP, suggesting a weak export performance. For today, there are no major reports up for release from the UK, which suggests that consolidation could be seen or that risk sentiment might be the main driver of price action. 

CHF 

The franc advanced towards the end of the week, even though Swiss retail sales turned out to be a disappointment. The report showed a mere 0.3% gain instead of the projected 2.2% increase while the previous reading was downgraded to 1.4%. Foreign currency reserves declined while the jobless rate held steady at 3.2% as expected. There are no reports due from Switzerland today. 

JPY 

The yen recovered to the dollar, as the US jobs report headline figures were disappointing. Japanese officials’ comments on how the weak yen might result to economic damage also forced the currency to take a break from its dive. There are no reports up for release from Japan today, leaving risk appetite in the driver’s seat. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls all took advantage of dollar weakness last week, as profit-taking also took place. Canada saw a stronger than expected jobs report, with a hiring gain of 43.1K in October and a jobless rate decline from 6.8% to 6.5%. Earlier today, Australia’s home loans report showed a worse than expected 0.7% drop while Chinese CPI came in line with expectations at 1.6%. The PPI was weaker than expected though, as it marked a 2.2% drop and hinted of weaker price pressures down the line. 

By Kate Curtis from Trader's Way