The US dollar was back with a vengeance on Friday, as traders booked profits of their short dollar trades after the FOMC statement. There were no major reports out of the US economy then while today has the existing home sales and a speech from FOMC member Lockhart. Any remarks favoring a rate hike this year could keep the US currency supported while cautious comments suggesting a delay in the liftoff could spur losses.
The euro barely reacted to the Greek election results, as the shared currency is still being weighed down by the dovish rhetoric from the ECB. Greek Prime Minister Tsipras has been able to stay in power, ensuring that the bailout program can be implemented in time for the creditors’ international review before the end of the year. Only the German PPI report is due from the euro zone today and producer prices are slated to show a 0.3% decline.
The pound retreated against most of its rivals on Friday, despite the lack of top-tier releases from the UK. BOE member Haldane gave a speech then and assured that the UK economy is staying resilient amid the downturn in other parts of the globe. There are no reports lined up from the UK today.
The franc returned its recent wins to the dollar on Friday, as there were no reports to give the franc any support. There are still no reports lined up from Switzerland today, which suggests that franc pairs might be sensitive to risk sentiment.
The yen gave up ground to the dollar and even gapped down over the weekend, but the Japanese currency has been able to advance against the rest of its peers when risk aversion stayed in play. There were no reports released from Japan on Friday and none are due today, suggesting that sentiment could stay in control of price action.
Commodity Currencies (AUD, NZD, CAD)
The comdolls returned their recent wins to the dollar and gave up further ground to the Japanese yen when risk aversion came back in play. Canada’s inflation reports came in line with expectations, as the headline CPI showed a flat reading while the core CPI printed a 0.2% uptick. Over the weekend, New Zealand’s Westpac consumer sentiment index showed a drop from 113 to 106, indicating a sharp decline in optimism. Visitor arrivals ticked up by 0.2% while credit card spending improved from 9.8% to 10.5%. BOC Governor Poloz is set to give a testimony later today.