Forex Major Currencies Outlook (Nov 6, 2014)

The ADP non-farm employment change figure saw a 230K gain versus the estimated 214K increase while the previous month’s reading was revised higher. The ISM non-manufacturing PMI showed a lower than expected reading though, as the figure fell from 58.6 to 57.1. Despite that, traders still seem to be gearing up for an upside NFP surprise later this week. For today, initial jobless claims and preliminary non-farm productivity and labor costs data are due.

EUR

The euro revisited its previous lows to the dollar, as euro zone retail sales showed a massive 1.3% decline instead of the projected 0.6% dip. The Spanish services PMI came in slightly weaker than expected while the Italian services PMI beat expectations. For now, traders might be bracing themselves for a downbeat ECB rate statement, although no actual changes are expected. Draghi might announce the actual scope and size of their ABS purchases, which many deem to be a form of quantitative easing.

GBP

The pound lost ground to its major counterparts when the UK printed a bleak services PMI reading. The figure fell from 58.7 to 56.2, reflecting a slower pace of expansion in the industry. The BOE is set to announce its monetary policy decision today and possibly keep rates and asset purchases unchanged. There is no press conference scheduled so traders might still wait for the minutes to be released a couple of weeks from now before deciding on their pound bias.

CHF

The franc gave up a bit of ground to the dollar despite better than expected CPI data. The report showed a flat reading instead of the projected 0.1% decline, easing deflation fears for a while. SECO consumer climate data is due today and a drop from -1 to -4 is expected, which would reflect increased pessimism. Other than that, the franc might also take its cue from euro price action for today.

JPY

The yen resumed its slide to its major counterparts, as the lack of data from Japan kept the currency weak. The BOJ minutes released earlier today seemed to spark another leg higher for yen pairs, as traders were reminded of the central bank’s dovish bias and deflation concerns. No other reports are up for release from Japan today. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls weakened to the dollar once more, weighed mostly by falling commodity prices. Apart from that, the Australian dollar lost ground earlier today as the jobs report reflected weakness in the sector, which saw downward revisions in previous data. Canadian Ivey PMI is up for release today and analysts are expecting to see an improvement from 58.6 to 59.2, which might be positive for the currency.

By Kate Curtis from Trader's Way