Forex Major Currencies Outlook (Feb 01, 2016)

The US advanced GDP reading was slightly weaker than expected at 0.7% versus the projected 0.8% growth figure and the previous 2.0% expansion. However, the Chicago PMI came in stronger than expected and indicated a return to industry expansion. US personal income and spending data, along with the core PCE price index, are up for release today. The ISM manufacturing PMI is also lined up and a rise from 48.2 to 48.6 is expected.

EUR

The euro returned some of its recent forex wins, despite mixed data from the euro zone. German retail sales and Spanish flash CPI came in weaker than expected but the region's core CPI estimate improved to 1.0%. Final manufacturing PMI readings from its largest economies are due today, followed by a testimony from ECB head Draghi. 

GBP

The pound suffered a sharp selloff before the markets closed on Friday, as traders probably priced in expectations of more dovish remarks in this week's BOE events. The Inflation Report, BOE statement, and MPC minutes are due on Thursday. UK manufacturing PMI and net lending to individuals figures are due today, along with mortgage approvals data.

CHF

The franc was also in a weak spot towards the end of last week's trading sessions, as traders lightened up on their positions. Swiss data was actually better than expected, as the KOF economic barometer rose from 96.8 to 100.3. The Swiss manufacturing PMI is due today and a drop from 52.1 to 51.0 is eyed.

JPY

The yen lost a lot of ground on Friday when the BOJ decided to implement negative deposit rates. Earlier today, Japan's manufacturing PMI reading was downgraded from 52.4 to 52.3 for January. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls took advantage of the yen selloff on Friday while also gaining ground on rising oil prices. Rumors of oil deals between Russia and OPEC nations propped prices up but these were dismissed by some Saudi officials. Earlier today, the Chinese official manufacturing PMI indicated a drop from 49.7 to 49.4 while the Caixin version showed an improvement from 48.2 to 48.4.

By Kate Curtis from Trader's Way