Forex Major Currencies Outlook (Jan 15, 2015)

Against the franc and euro, consolidation was seen. Data from the US economy was weaker than expected, as both headline and core retail sales figures posted sharp declines. The headline retail sales report showed a 0.9% drop instead of the estimated 0.2% gain while the core retail sales figure indicated a 1.0% decline versus the projected 0.1% uptick. For today, PPI figures are due and negative readings are eyed due to the continuous slide in oil prices. Initial jobless claims and the Philly Fed index are also up for release.

EUR

The euro struggled to hold steady against the dollar while recovering against the Japanese yen. Euro zone industrial production was better than expected with a 0.2% gain instead of the expected flat reading. For today, only the euro zone trade balance and a speech by German central bank head Weidmann are lined up and might not have much of an impact on euro movement.

GBP

The pound managed to recover against the dollar and the yen in yesterday’s trading sessions after BOE Governor Carney assured that the UK economy will not fall into deflation. He also assured that the UK is more financially stable compared to the euro zone. There are still no major reports due from the UK economy today, which suggests that risk sentiment might be the main driver of pound price action. 

CHF

The franc held steady to the dollar as the Swiss currency simply took its cue from euro movements. There have been no reports released from Switzerland then and none are due today. 

JPY

The yen gave up some of its recent gains to its counterparts when risk appetite seemed to return to the markets yesterday. After all, the US printed a weak retail sales report and assured most traders that the Fed won’t be tightening policy just yet. There have been no actual reports released from Japan though and none are due today. 

Commodity Currencies (AUD, NZD, CAD)

The Aussie was able to make a strong bounce in today’s Asian trading session after Australia printed a stronger than expected employment report. Hiring picked up by 37.4K in December versus the projected 5.3K increase while the November reading was upgraded. The jobless rate improved to 6.1% even as the participation rate also improved. There have been no reports released from New Zealand and Canada so far and none are lined up for today. 

By Kate Curtis from Trader's Way