Forex Major Currencies Outlook (Sept 26, 2014)

Data from the US was mostly in line with expectations, as the core durable goods orders report showed a 0.7% gain while the initial jobless claims came in at 293K. However, the headline durable goods orders figure fell short of consensus as it marked an 18.2% drop versus the estimated 17.7% decline. For today, US final GDP data could determine Greenback price action, as the figure could be upgraded from 4.2% to 4.6%. 

EUR 

The euro struggled to recoup its recent losses to the dollar but wound up weaker to the pound and most of its other forex counterparts. Medium-tier data from the euro zone came in line with expectations while the Italian retail sales report showed disappointing results. German GfK consumer climate data is due today and a drop from 8.6 to 8.5 is expected. Weaker than expected figures could lead to more losses for the euro.

 GBP

The pound tried to head higher in recent trading, despite the sharper than expected decline in CBI realized sales. The reading slipped from 37 to 31, lower than the estimated 34 figure. There are no reports due from the UK today so the pound might move to the tune of risk sentiment.

CHF

The franc lost ground to the dollar but continued to move sideways to the euro, as there were no major reports released from Switzerland yesterday. There are still no event risks lined up for today, which means that the franc could just take its cue from the euro or market sentiment. 

JPY

The yen suffered another round of selling in today’s Asian session as the Japanese inflation readings fell short of expectations. Core CPI in Tokyo fell from 2.7% to 2.6% instead of holding steady while the national core CPI dipped from 3.3% to 3.1%, lower than the estimated drop to 3.2%. Without the effect of the sales tax hike, core inflation is just at 1.1%, which is just over half the central bank’s 2% target. There are no other reports due from Japan today but the weak inflation readings could boost calls for more easing, which might weigh on the yen for the rest of the day. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls gave up ground to their counterparts, mostly due to RBNZ Wheeler’s remarks favoring a weaker Kiwi. He said that he welcomes a move to more sustainable exchange rate, which might see NZDUSD at .7500 eventually. RBA Governor Stevens expressed concerns about housing sector investment, which also led to a bit of Aussie weakness.

By Kate Curtis from Trader's Way