Forex Major Currencies Outlook (May 30, 2014)

However, weak data from the US economy led to a bit of a selloff, as the GDP reading was revised down from 0.1% to show a 1.0% economic contraction. Initial jobless claims were better than expected but pending home sales were weak. For today, data on personal spending and income, core PCE price index, revised consumer sentiment, and Chicago PMI are due. Another round of weak figures could lead to a deeper dollar selloff.

EUR

Euro bears ganged up on the shared currency in recent trading sessions, despite the absence of most London session traders who were on an Ascension Day holiday. There were no reports released from the euro zone then while today has German retail sales on tap. Given that jobs data in the euro zone’s largest economy was much weaker than expected, consumer spending reports might also show weak figures. Analysts expect to see a 0.4% uptick to follow the previous month’s 0.7% decline.

GBP

The pound made a bit of a recovery but was unable to hold on to most of its recent gains. There were no reports released from the UK yesterday, suggesting that the bounce was due to profit-taking, and there are no reports due today. Pound pairs might consolidate or keep weakening in light of the change in BOE rhetoric to a less hawkish bias.

CHF

The franc slid lower to the dollar in recent trading, as Swiss traders took off on a holiday yesterday. The KOF economic barometer is up for release today and a small improvement from 102.04 to 102.05 is eyed. Weaker than expected data could lead to more losses for the franc while a strong rebound could lead to a rally.

JPY

The yen gave up some of its recent gains when most reports from Japan showed weakness due to the sales tax hike. Household spending and retail sales were both much weaker than expected while core CPI surged to a record high level of 3.2%. However, these are just knee-jerk reactions to the sales tax hike and the data could level off in the next few months.

Commodity Currencies (AUD, NZD, CAD)

The comdolls made a bit of recovery in the past few trading hours, possibly due to profit-taking ahead of the weekend and end of the month. There were no major reports from both Australia and New Zealand, but Canada has its monthly GDP reading on tap. A 0.1% growth figure is eyed, which might be enough to lead to a 1.7% quarterly growth. Strong figures could add support to the Loonie in the next few days.

By Kate Curtis from Trader's Way