Forex Major Currencies Outlook (Jan 10, 2017)

USD

The US dollar was unable to establish a clear direction in recent sessions as US data came in mixed. Consumer credit showed strong gains in November while the Fed’s labor market conditions index slumped back to negative territory at -0.3. JOLTS job openings data and NFIB small business index are lined up today.

EUR

The euro advanced to the dollar, slumped against the yen, and consolidated against the commodity currencies. Data from the region has also been mixed as German trade balance and Sentix investor confidence beat expectations while German industrial production and Italy’s unemployment rate fell short. For today, French industrial production data is due and a 0.5% rebound is eyed.

GBP

The pound was the weakest of the bunch as Brexit-related headlines weighed on the currency. Over the weekend, PM May hinted that they’re willing to forego access to the single market in exchange for closing UK borders while Chancellor Hammond reiterated their plans to conclude Brexit talks by April 2019. Halifax HPI beat expectations with a 1.7% gain and the BRC retail sales monitor posted a stronger 1.0% gain.

CHF

The franc tossed and turned against the dollar but was able to rake in strong gains against the pound. Swiss retail sales came in stronger than expected with a 0.9% gain versus the projected 0.4% uptick and earlier 0.7% drop. Swiss jobless rate is due today and no change from the earlier 3.3% reading is eyed.

JPY

The yen was one of the strongest performers as it took advantage of the selloff in higher-yielding currencies. Japanese banks were closed for the holiday yesterday while today has the consumer confidence index on tap. A climb from 40.9 to 41.3 is expected.

Commodity Currencies (AUD, NZD, CAD)

The comdolls struggled to hold on to their gains in recent sessions, giving up ground against the Japanese yen. Crude oil took a hit while Australia reported a smaller than expected 0.2% gain in retail sales versus the projected 0.4% increase. Chinese CPI came up short with a 2.1% gain instead of the 2.2% figure but PPI beat expectations at 5.5% versus 4.6%. Canadian building permits and housing starts are due next.