Forex Major Currencies Outlook (November 11, 2013)

. The actual figure showed a 204,000 rise in net hiring instead of falling to 120,000 because of the government shutdown. Aside from that, the previous month’s figure was revised up to 163,000, showing a good trend in hiring. Traders took this as a sign that the Fed could start reducing stimulus before the year ends, which provided support for the dollar. This positive sentiment could carry on today as US banks are on holiday because of Veterans Day. 

EUR

The euro gave up ground to the dollar on Friday again when the US non-farm payrolls release turned out better than expected. Data from the euro zone was mostly weaker than expected then, as French industrial production and trade balance both missed expectations. Only the German trade balance turned out stronger than expected but it wasn’t enough to keep the euro afloat. For today, there are no reports from the region as banks are on holiday. 

GBP

The pound gave way to dollar strength on Friday as data from the UK was weaker than expected. The trade balance report showed a wider deficit of 9.6 billion GBP instead of the estimated drop from 9.6 billion GBP to 9.1 billion GBP. There are no reports due from the UK today, which suggests that pound pairs might keep moving sideways or resume their previous selloff. 

CHF

The franc was no match to dollar strength last week, pushing USD/CHF way past the .9200 resistance level. Swiss retail sales turned out to be a huge disappointment with a mere 1.0% increase, much lower than the estimated 2.6% figure. Analysts were expecting to see a small improvement from the previous month’s 2.4% reading. There are no reports due from Switzerland today so USD/CHF might keep heading higher on broad dollar strength. 

JPY

USD/JPY finally showed signs of breaking out form the long-term consolidation pattern as the US showed a strong jobs figure. There were no reports released from Japan then, leaving the yen at the mercy of market sentiment. For today, Japan released a weaker than expected current account deficit of 0.13 trillion JPY versus the estimated at 0.10 trillion JPY. No other reports are due from Japan for the rest of the day. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls caved to the dollar on Friday, although the Loonie did enjoy some resiliency thanks to better than expected Canadian jobs data. The employment change figure for Canada was up by 13.2K versus the consensus of a 12.7K rise while the jobless rate improved to 6.9%. Over the weekend, Chinese data came in mostly below consensus and weighed on the Australian dollar. CPI was at 3.2%, lower than the 3.3% estimate, while PPI printed a larger than expected 1.5% decline. There are no reports due from the comdoll economies today as the currencies could consolidate or be sensitive to risk sentiment. 

By Kate Curtis from Trader's Way