Forex Major Currencies Outlook (May 19, 2014)

Data from the US economy was mixed, as the UoM consumer sentiment figure fell short of expectations while the housing data turned out strong. Building permits climbed from 1.00 million to 1.08 million while housing starts rose from 0.97 million to 1.07 million in April. There are no major reports due from the US economy so it might be all about risk sentiment driving dollar pairs.

EUR

The euro made a small recovery on Friday as traders booked some of their profits before the end of the trading week. Euro zone data was mostly weaker than expected, with France reporting a 0.1% decline in quarterly non-farm payrolls and euro zone showing a smaller than expected trade balance. There are no major reports lined up from the euro zone today, except perhaps for a few speeches by key officials.

GBP

The pound continued to show signs of weakness last week as the change in BOE rhetoric weighed on the currency’s strength. There were no economic reports released from the UK then, leaving the currency with nothing to draw support from. There are still no reports due from the UK today so it might mean more weakness or consolidation among pound pairs.

CHF

The franc struggled to hold on to its current levels to the dollar in recent trading but it gave up a lot of ground to the Japanese yen. There were no major reports released from Switzerland then but the break of a major support area let the sellers in. There are no reports lined up from the country today.

JPY

The yen was generally stronger on Friday when risk aversion extended its stay in the currency market. Japan’s industrial production was revised higher and added to support for the currency. There are no reports due from Japan today so risk sentiment might be the driver of yen pairs for the next trading sessions.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi ended the week on a bleak note but these currencies managed to hold stead on Friday. The Loonie extended its wins to the dollar despite the weaker than expected foreign securities purchases data. For today, the comdoll schedule is empty so these currencies might be sensitive to market sentiment or might just stay in consolidation.

By Kate Curtis from Trader's Way