The US dollar regained some ground against its peers on Friday when reports came in line with expectations. Capacity utilization rose 77.5% while industrial production dipped by only 0.1% as expected. The preliminary UoM consumer sentiment report showed a rise to 92.1 from an upgraded 87.2 reading, indicating stronger optimism. For today, FOMC member Brainard is set to give a speech and usually highlights the reasons why the Fed should stand pat.
The euro gave up ground to most of its forex peers when the final CPI readings confirmed that the region suffered deflation in September. No changes were made to the headline CPI of -0.1% and the core CPI of 0.9%. There are no reports due from the euro zone today, leaving traders to price in expectations for the ECB statement later on this week.
The pound consolidated to the dollar and regained some ground on Friday, even though there were no major reports out of the UK. For today, there are still no reports lined up, although the weekend release of the Rightmove HPI indicated at 0.6% gain in house prices.
The franc returned some of its recent wins, as traders probably booked profits off their long trades by the end of the week. Weak inflation in the euro zone increases the odds of further ECB easing, which could mean more intervention from the SNB to keep the franc weak. There are no reports due from Switzerland today.
The yen struggled to hold on to its recent gains when profit-taking took place by the end of last week. Comments from BOJ Governor Kuroda suggesting that they plan to continue easing until Japan reaches its 2% inflation target kept the yen’s gains limited. There are no reports due from Japan today, although the safe-haven currency appears to be giving up ground after China’s data dump.
Commodity Currencies (AUD, NZD, CAD)
The comdolls made a quick bounce upon seeing the latest reports from China, which indicated that the slowdown wasn’t so bad for now. The GDP showed 6.8% growth versus the projected 6.9% figure and the previous 7.0% expansion while retail sales came in better than expected. Industrial production and fixed asset investment both came in below expectations. In Canada, manufacturing sales and foreign securities purchases beat expectations. Canada’s federal election is scheduled today.