Forex Major Currencies Outlook (Apr 12, 2018)

Fed policymakers agreed that gradual rate hikes should be maintained as the economic outlook has improved in recent months and annual inflation could keep rising. However, CPI data hasn't been so impressive as the headline figure posted a 0.1% dip instead of staying flat, keeping tightening doubts in play. Initial jobless claims and import prices data are due next.

EUR

The euro had a mixed run as it caved to the comdolls but advanced to the yen and dollar. Draghi also had some hawkish remarks to say as he expressed confidence that inflation will hit their targets soon, adding to upbeat remarks from other ECB officials earlier in the week. Italian retail sales beat expectations with a 0.4% uptick and the ECB minutes are due next.

GBP

The pound took hits on weaker than expected manufacturing and industrial production data. The former showed a 0.2% drop versus the estimated 0.2% gain while the previous reading was downgraded. The latter posted a meager 0.1% uptick versus the 0.4% consensus. MPC member Broadbent has a speech lined up and the BOE Credit Conditions Survey is due.

CHF

The franc gave up ground as risk appetite returned on cooling trade tensions but the lower-yielding currency managed to draw a bit of support from geopolitical tensions in Syria. There are no reports due from the Swiss economy today so sentiment could keep pushing franc pairs around.

JPY

The yen also drew some support from geopolitical risks but was still no match to comdoll strength on easing trade war jitters. BOJ Governor Kuroda maintained an optimistic view on inflation in his latest testimony and the lack of other top-tier catalysts could keep risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)

The Loonie was among the top performers as it was boosted by risk appetite and higher crude oil. Tensions in Syria spurred speculations of supply outages in the Middle East, which propped price up despite the surprise build in US stockpiles. Australia's MI inflation expectations and home loans data were slightly weaker. Canada's NHPI and New Zealand's Business NZ manufacturing index are lined up next.

By Kate Curtis from Trader's Way