Forex Major Currencies (June 17, 2014)

The Empire State manufacturing index improved from 19.0 to 19.3 instead of dipping to the estimated 15.2 reading. Industrial production came in line with expectations of a 0.6% increase while capacity utilization data showed stronger than expected results. US CPI and housing starts data are due today and another round of good figures might extend the Greenback’s rally.

EUR

The euro paused from its recent recovery as it stalled below the 1.3600 mark to the dollar. Euro zone headline and core CPI came in line with expectations of 0.5% and 0.7% gains respectively. German and euro zone ZEW figures are up for release today and considerable improvements are expected, although this might set the stage up for disappointment. Weaker than expected figures could remind traders that the ECB is still ready to ease further and push the euro back in selloff mode.

GBP

The pound rallied against most of its counterparts, driven by positive CPI expectations for today’s release. There have been no reports released yesterday but it appears that traders are already bracing themselves for good UK data this week. CPI could slide from 1.8% to 1.7%, but the housing price inflation figures might draw more attention as strong gains could reinforce Carney’s view that rate hikes might take place earlier than expected.

CHF

The franc continued to show signs of weakness, as some market participants are already starting to place their bets for the SNB rate decision later on in the week. Swiss PPI data is due today and a flat reading is expected to follow the previous 0.3% decline. A weaker than expected reading could convince more traders that SNB easing is needed to ward off deflationary pressures.

JPY

The Japanese yen lost ground to some of its trading rivals as risk sentiment turned positive recently. There have been no reports released from Japan yesterday and none are due today, but the upcoming BOJ monetary policy meeting minutes in the next Asian trading session could renew yen strength if they show confidence in the economy.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar gave up a lot of ground when the RBA meeting minutes turned out dovish, indicating that policy might stay accommodative. This dashed hopes of a rate hike for the RBA this year. The Kiwi also followed suit, although the selloff was weaker since the RBNZ is more inclined to hike rates again. Canadian foreign securities purchases data was stronger than expected, providing some support for the Loonie. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader's Way