Forex Major Currencies Outlook (Oct 11, 2016)


The US dollar resumed its climb against its peers during the US session even as traders were out for the holiday. Only low-tier reports such as the NFIB Small Business Index and labor market conditions index are due from the US today, although strong figures could still fuel the dollar’s rally.


The euro was in a weak spot on Monday even after economic data came in stronger than expected. Germany’s trade surplus widened from 19.4B EUR to 22.2B EUR while Italy’s industrial production rebounded by 1.7%. Euro zone Sentix investor confidence was up from 5.6 to 8.5, higher than the estimated rise to 6.2. German and euro zone ZEW economic sentiment figures are due today.


The pound gapped down over the weekend and resumed its slide after filling the gaps. The UK BRC retail sales monitor showed a 0.4% rebound but traders seem to be shrugging off these upbeat reports to focus on Brexit uncertainties. There are no major reports due from the UK today.


The franc regained a bit of ground when the Swiss jobless rate held steady at 3.3% instead of rising to the projected 3.4% reading. There are no reports due from Switzerland today so the franc could take its cue from market sentiment or euro price action.


The yen made a correction from its recent selloff but soon resumed its slide against its peers. Japanese banks were closed for the holiday yesterday. Earlier today, Japan’s current account balance printed a larger than expected surplus of 1.98T JPY from the earlier 1.45T JPY reading. The Economy Watchers sentiment index is due next.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi were no match to dollar strength but the Loonie was able to put up a fight when crude oil prices rallied. Another informal OPEC meeting is scheduled this week and investors are optimistic that their resolve to stabilize the markets will be stronger after Putin mentioned that Russia is willing to cooperate with any deal to cut or cap production. Australia reported no change in its NAB business confidence index at 6 while home loans posted a sharper than expected 3% drop.