Forex Major Currencies Outlook (Jan 29, 2018)

The advance reading for Q4 2017 came in at 2.6% versus the estimated 3.0% expansion. Goods trade balance also disappointed but durable goods orders and preliminary wholesale inventories beat expectations. Today has the core PCE spending and personal spending and income data due.

EUR

The euro gave up some more ground towards the end of the previous week as a few more officials remarked on the currency's strength. In particular ECB member Villeroy remarked that currency volatility has been a source of uncertainty. Only the German import prices report is due today while the rest of the week has mostly preliminary CPI and GDP data.

GBP

The pound was one of the strongest currencies ending the week as progress on the Brexit transition plans and stronger than expected preliminary GDP of 0.5% lifted the currency. Medium-tier reports such as net lending to individuals, mortgage approvals, and the BRC price shop index are lined up over the next few days before the release of UK manufacturing and construction PMI data later on.

CHF

The franc was able to hold on to its wins as the currency shrugged off intervention threats from SNB head Jordan. Dollar weakness also drove the lower-yielding franc higher as a safe-haven alternative. There are no reports due from Switzerland today so sentiment could push franc pairs around.

JPY

The yen regained some ground as the dollar resumed its slide towards the end of the week. Japan has its household spending, retail sales, and the unemployment rate due in the next Asian session. Strong data could reinforce calls for BOJ tapering, although market sentiment would likely remain the driver for yen price action.

Commodity Currencies (AUD, NZD, CAD)

Canada's CPI reports showed some improvement, keeping Loonie traders hopeful for another BOC hike soon. Baker Hughes reported an increase in oil rig counts, though, and this could mean more output and downside pressure on the commodity. New Zealand has its trade balance due in the next Asian session and a smaller deficit is eyed.

 By Kate Curtis from Trader's Way