Forex Major Currencies Outlook (June 16, 2014)

Headline PPI slipped by 0.2% instead of showing the estimated 0.1% uptick while core PPI showed a 0.1% dip instead of the projected 0.2% increase. Consumer sentiment dipped from 81.9 to 81.2 instead of improving to 83.2, reflecting a downturn in optimism. US TIC long-term purchases, Empire State manufacturing index, and industrial production data are due today.

EUR

The euro made a quick bounce from its sharp selloff when traders booked profits off their euro shorts at the end of the week. There have been no reports released from the euro zone then while today has the CPI reports on tap. Recall that weak CPI forecasts have pushed the ECB to implement several rate cuts and that a weak round of CPI figures could lead to speculations of further easing. Headline CPI could see a 0.5% reading while core CPI could stay at 0.7%.

GBP

The pound continued its ascent on the heels of hawkish remarks from BOE Governor Carney earlier in the week. There have been no reports released from the UK economy on Friday while today also has an empty economic schedule. Do keep in mind though that there are several top-tier events lined up from the UK this week, including the BOE meeting minutes, which might lead to pricing in of upbeat data results and additional volatility.

CHF

The franc showed further signs of weakness as traders started positioning ahead of this week’s SNB rate statement. There have been no reports released on Friday and none are due today, but the odds are high that the Swiss central bank could jawbone or intervene after EUR/CHF edged closer to their floor.

JPY

The yen was able to gain support from the upbeat BOJ rate decision, during which BOJ Governor Kuroda and his men decided to keep policy unchanged. According to him, the economy remains resilient amidst the sales tax hike but they are ready to ease further if necessary. There are no reports due from Japan today.

Commodity Currencies (AUD, NZD, CAD)

The comdolls drew support from Chinese data on Friday, as both retail sales and industrial production came in line with expectations and hinted of a rebound in the world’s second largest economy. Over the weekend, New Zealand reported a dip in Westpac consumer sentiment from 121.7 to 121.2 but barely led to Kiwi weakness. As for Canada, manufacturing sales showed a bleak result on Friday but the Loonie continued to gain ground. Data on Canada’s foreign securities purchases is due today.

By Kate Curtis from Trader's Way