Forex Major Currencies Outlook (Dec 19, 2016)

Economic data from the US was also weaker than expected, as building permits and housing starts came in below consensus. Only the flash services PMI is due today and a rise from 54.6 to 55.2 is eyed. 

EUR

The euro made a bit of a bounce against its forex counterparts on Friday even though data came in mixed. The CPI readings were unchanged from the headline 0.6% estimate and the core 0.8% figure but the region's trade balance was weaker than expected. The German Ifo business climate index is up for release today and an improvement from 110.4 to 110.7 is expected. 

GBP

The pound also chalked up some gains on Friday as the CBI industrial order expectations index improved from -3 to 0 instead of sinking to -5. There are no reports due from the UK economy today so pound traders could be extra sensitive to Brexit-related headlines. 

CHF

The franc regained a bit of ground to the dollar, euro, and pound as traders probably breathed a sigh of relief after the SNB decision. There were no reports out of the Swiss economy then and none are due today so market sentiment could stay in play. 

JPY

The yen also got back on its feet towards the end of the week, presumably on profit-taking and positioning ahead of this week's BOJ decision. Over the weekend, Japan reported a weaker than expected trade surplus of 0.54T JPY but this was actually spurred by a 4.3% gain in exports and a 3.4% increase in imports.  

Commodity Currencies (AUD, NZD, CAD)

The comdolls were still on weak footing towards the end of the week, as traders priced in the potential impact of the Fed's hike on commodity prices and global growth. Over the weekend, New Zealand reported an increase in its ANZ business confidence index from 20.5 to 21.7 and also an improvement in Westpac consumer sentiment. The Australian Treasury just released its mid-year economic and fiscal outlook while the RBA minutes are due tomorrow. 

By Kate Curtis from  Trader's Way