Forex Major Currencies Outlook (April 23, 2014)

However, liquidity was still low and there were barely any big moves among dollar pairs. Data from the US was stronger than expected, as the existing home sales report showed a 4.59M reading, higher than the estimated 4.57M figure. The Richmond manufacturing index was also better than expected, as it jumped from -7 to 7 instead of landing at 0. For today, US new home sales and flash manufacturing PMI are up for release but the reaction may be overshadowed by other major economic events lined up.

EUR

The euro managed to edge slightly higher in recent trading despite the lack of major data from the euro zone. Consumer confidence in the region held steady at -9, reflecting pessimism. For today, German and French manufacturing and services PMIs are up for release. Small improvements are expected but if the actual figures disappoint, the euro might wind up returning most of its recent gains.

GBP

The pound continued to test its recent highs around the 1.6800 levels, as traders await the release of the BOE meeting minutes. Many are hopeful that the UK central bank policymakers will be more hawkish with their economic assessment and outlook, supporting Carney’s claim that the BOE could hike rates before the general elections next year. On the other hand, dovish comments might undermine pound strength.

CHF

The franc lost further ground to the dollar yesterday, with USD/CHF forming a reversal pattern on its long-term time frames. There have been no reports released from Switzerland lately and none are due today, which suggests that the franc could simply act as a counter currency to currency-specific events.

JPY

There was barely any action among the yen pairs in recent trading since there were no reports released from Japan. There are still no major reports lined up from the Asian economy today so yen pairs might be extra sensitive to risk sentiment.

 Commodity Currencies (AUD, NZD, CAD)

The Australian dollar was sold off early in today’s Asian trading session since the quarterly CPI figure came in weaker than expected at 0.6% versus the estimated 0.8%. This goes to show that the rising value of the Aussie could be hampering inflation. Canada is set to print its retail sales data in today’s New York session and possibly show a 0.5% increase in headline sales and a 0.6% rise in core retail sales. Afterwards, the RBNZ is set to announce its monetary policy decision and possibly keep rates unchanged in the meantime.

By Kate Curtis from Trader's Way