Forex Major Currencies Outlook (June 30, 2014)

The UoM consumer sentiment reading was revised up from 81.2 to 82.5 versus expectations of an 82.2 reading. Meanwhile inflation expectations improved from 3.0% to 3.1%. For today, Chicago PMI and pending home sales are due. The PMI is expected to dip from 65.5 to 63.2 while pending home sales could see a stronger 1.4% increase compared to the previous 0.4% uptick.

EUR

The euro put up a pretty good fight on Friday, as data from the euro zone came in mostly better than expected. The German preliminary CPI showed a 0.3% rise versus the estimated 0.3% uptick while French consumer spending saw a 1.0% gain instead of the predicted 0.3% increase, while the previous reading was upgraded. Spanish flash CPI, however, fell short of expectations with its mere 0.1% uptick while German import prices stayed flat. German retail sales, euro zone money supply, private loans, and flash CPI estimates are lined up for today so the euro might be in for a volatile trading session.

GBP

The pound retreated on Friday as some traders exited their long pound positions at the end of the month and the quarter, prior to a shortened trading week this week. UK current account was weaker than expected, as the actual result showed a wider deficit of 18.5 billion GBP versus the estimated 17.1 billion GBP shortfall while the previous month’s balance was downgraded. Final GDP was unchanged at 0.8%, as expected. For today, only the net lending to individuals report is up for release from the UK.

CHF

The franc advanced to the dollar in Friday’s trading when the Swiss KOF economic barometer came in stronger than expected. The actual reading came in at 100.4 versus the estimated 100.2 figure while the previous month’s report had an upward revision to 100.1. There are no reports lined up from Switzerland today.

JPY

The yen got back on its feet last week as risk aversion took a peek back in the forex market. Stronger than expected retail sales and inflation data from Japan also added to yen support, although many are still waiting for the rest of the top-tier releases this week to assess how much damage the sales tax hike has caused. The Tankan manufacturing and non-manufacturing indices are due in the next Asian trading session and both reports are slated to show dips.

Commodity Currencies (AUD, NZD, CAD)

The Loonie continued its rally on Friday despite weaker than expected medium-tier inflation data. Raw materials saw a 0.4% decline while industrial products printed a 0.5% drop, signaling a potential downturn in consumer inflation later on. Earlier today, Australia’s new HIA new home sales report showed a 4.3% decline while New Zealand’s ANZ business confidence figure fell from 53.5 to 42.8. As for Canada, the monthly GDP figure is up for release and a 0.2% growth figure is eyed.

By Kate Curtis from Trader's Way