Forex Major Currencies Outlook (September 26, 2013)

Core durable goods orders turned out to be a disappointment with a 0.1% decline for August while the headline figure was only slightly better than expected at its 0.1% uptick. New home sales were slightly below expectations at 421K versus the consensus at 422K. For today, initial jobless claims are up for release along with pending home sales, which could see a 0.9% decline. More weak figures could reinforce the dollar selloff. 

EUR

The euro recovered against the Greenback but continued to lose to the yen. Risk aversion was still in play yesterday, although traders showed preference for the lower-yielding yen instead of the dollar, which is plagued by debt ceiling concerns. Germany’s GfK consumer climate report came in line with expectations and showed a 7.1 reading, up from the previous 7.0 figure. For today, M3 money supply and Italian retail sales are up for release and not expected to have a huge impact on euro price action. 

GBP

The pound was able to bounce back after hitting the 1.6000 area against the Greenback. The CBI realized sales figure came in much better than expected at 34 versus the estimate of an increase from 24 to 27. UK revised GDP figures are up for release today but no changes are expected. A stronger than expected reading might allow the pound to sustain its rallies though. 

CHF

The franc finally made some headway against the U.S. dollar as USD/CHF dipped below the .9100 major psychological level. However, data from Switzerland showed a bit of weakness as the UBS consumption indicator dipped from 1.41 to 1.34. The SNB quarterly bulletin is up for release today and it should shed light on why the central bank upgraded its growth forecasts recently. 

JPY

The yen continued to soar against its major counterparts, as improving medium-tier economic data from Japan lifted the currency. Risk aversion also helped fuel the yen’s rallies, as traders preferred the Japanese currency over the U.S. dollar. There are no reports due from Japan today but watch out for updates on the government’s plans to offset the impact of the increased sales tax. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls were unable to join the anti-dollar rallies yesterday, as AUD/USD and NZD/USD sank lower while USD/CAD stayed stuck in consolidation around 1.0300. The lack of major data from these economies was probably one of the main reasons why the Aussie, Kiwi, and Loonie failed to rally. For today, their economic schedule is empty once again so these currencies might simply be driven by risk flows again. 

By Kate Curtis from Trader's Way