USD
The dollar bounced back to action against some of its counterparts on Friday, as traders booked profits off their short trades ahead of the weekend. There were no major reports released from the US then, but the wholesale inventories release which turned out stronger than expected may have also lifted the Greenback. For today, only the Federal budget balance is up for release from the US and this isn’t likely to cause huge waves among dollar pairs, unless there are significant surprises.EUR
EUR/USD retreated after reaching the 1.3400 major psychological level on Friday, but the pair could be ready to resume its climb this week. Weaker than expected data from France and Italy were responsible for the euro’s slide that day, although traders remain optimistic that the improvements in Germany could still provide support for the entire region. There are no reports due from the euro zone today though.
GBP
The pound was stuck in consolidation last Friday, even though the UK trade balance came in better than expected. The deficit stood at 8.1 billion GBP, smaller than the estimated 8.4 billion GBP shortfall and the previous 8.7 billion GBP deficit. There are no reports due from the UK today, which suggests that further consolidation could be in the cards.
CHF
The franc was able to hold on to its recent gains against the US dollar last week. There were no reports released from Switzerland on Friday yet the pair was able to take advantage of risk appetite and dollar weakness. Swiss retail sales are up for release today and an improvement from 1.8% to 1.9% is eyed. If the actual figure comes in strong, the franc could be in for more gains.
JPY
Japan printed weaker than expected consumer confidence last week, as the figure dipped from 44.3 to 43.6 instead of improving to 45.3. This reveals that not all Japanese citizens are confident that the economy is seeing improvements, in contrast to what government officials and BOJ policymakers believe. Earlier today, Japan’s preliminary GDP figure fell short of consensus as it printed 0.6% growth, lower than the estimate at 0.9%. Revised industrial production and preliminary machine tool orders data are due later today.
Commodity Currencies (AUD, NZD, CAD)
The comdolls continued to flex their muscles on Friday, as AUD/USD climbed to the .9200 mark while NZD/USD kept inching higher. What’s surprising though is that Chinese CPI came in weaker than expected at 2.7% instead of the 2.8% estimate while Canada’s jobs data fell short of consensus. Hiring fell by 39.4K in July instead of rising by 6.2K, bringing the unemployment rate up from 7.1% to 7.2%. There are no reports due from these economies today.
By Kate Curtis from Trader’s Way.