Forex Major Currencies Outlook (Feb 28, 2018)

However, the dollar got a boost when new Fed Chairperson Powell gave his testimony and added a few more hawkish remarks that supported tightening expectations. Powell mentioned that he doesn't want to prejudge potential rate changes but listed more factors that tilt the risks to the upside. The preliminary GDP is up for release and analysts are expecting a downgrade from 2.6% to 2.5%.

EUR

The pound took some hits even though there were no major reports out of the UK. Moody's Brexit Monitor shared a gloomy outlook for the UK, citing “Consumer indicators are below five-year averages and household consumption growth has slowed since the Brexit referendum in June 2016. Lacklustre retail sales fell further below their five-year trend in January." There are no major reports due from the UK today.

GBP

The pound took some hits even though there were no major reports out of the UK. Moody's Brexit Monitor shared a gloomy outlook for the UK, citing  “Consumer indicators are below five-year averages and household consumption growth has slowed since the Brexit referendum in June 2016. Lacklustre retail sales fell further below their five-year trend in January." There are no major reports due from the UK today.

CHF

The franc raked in more gains as risk aversion returned to the markets on stronger tightening prospects. There were no reports out of the Swiss economy then while today has the KOF economic barometer due. A dip from 102.9 to 102.6 is eyed. The UBS consumption indicator is also up for release.

JPY

The yen also chalked up some gains as global tightening prospects heated up on hawkish ECB and Fed remarks. However, data from Japan came in weaker than expected earlier today, with the preliminary industrial production and retail sales both falling short. There are no other reports due from Japan, which suggests that sentiment could take over yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were the weakest in the bunch as risk appetite returned to the financial markets. Apart from global tightening expectations, weaker PMI readings from China also dampened demand for commodity currencies. The official manufacturing PMI fell from 51.3 to 50.3 versus 51.2 while the non-manufacturing PMI slid from 55.3 to 54.4. EIA crude oil inventories data is due today.

By Kate Curtis from Trader's Way