Forex Major Currencies Outlook (July 30, 2014)

The CB consumer confidence index showed a climb to 90.9, higher than the estimated 85.5 reading, while the previous report showed an upgrade from 85.2 to 86.4. Today, the US dollar could be a big mover again, as the US advanced GDP report and FOMC statement are lined up. A growth figure of 3.1% is eyed, which would be enough to erase the 2.9% contraction in the previous quarter. The FOMC is expected to continue with their taper program and possibly acknowledge the improvements in the labor sector and inflation, although there is no press conference scheduled after the event.

EUR

The euro continued to slide lower against most of its major counterparts in recent trading. Data from the euro zone was weaker than expected, as German import prices showed a mere 0.2% uptick versus the estimated 0.3% gain. German preliminary CPI is up for release today, along with Spanish flash CPI and GDP data. Strong results could allow the euro to rebound while another round of weak figures could lead to more euro weakness.

GBP

The pound retreated further to its forex counterparts, even as UK data came in slightly stronger than expected. Net lending to individuals came in as expected at 2.5 billion GBP while mortgage approvals climbed from 62K to 67K. There are no reports due from the UK today, which suggests that the pound might keep sliding or might be in for consolidation.

CHF

The franc simply followed the euro’s footsteps in recent trading, as there were no reports released from Switzerland yesterday. For today, Swiss KOF economic barometer and UBS consumption indicator are due, with improvements likely to result to support for the franc.

JPY

The yen was in for a bit of consolidation against its forex counterparts but it lost ground to the dollar. Japanese data came in mixed, with retail sales and jobs data printing weaker than expected results and household spending showing a smaller than expected decline. Preliminary industrial production came in weaker than expected earlier today as it marked a 3.3% decline versus the estimated 1.0% drop. There are no other reports up for release from Japan today.

Commodity Currencies (AUD, NZD, CAD)

New Zealand reported a 3.5% rebound in building consents for June but this was not enough to keep the Kiwi strongly supported, as news of Fonterra’s lower milk payout weighed on the currency. Canada’s underlying inflation data, namely RMPI and IPPI, are up for release today.

By Kate Curtis from Trader's Way