Daily FX Trading Review: USD Advances Further – Sept. 9, 2014

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Daily FX Trading Review: USD Advances Further - Sept. 9, 2014

The US dollar continued to advance against its FX trading counterparts as risk aversion hit the markets and favored the lower-yielding Greenback. There were no major reports released from the US yesterday, with only the consumer credit report on tap and indicating a stronger than expected figure. For today, wholesale inventories and crude oil inventories are up for release, both of which aren’t likely to have a strong effect on the dollar.

The euro recovered against some of its FX trading rivals and consolidated against others. Against the dollar, the shared currency suffered massive losses once more, despite stronger than expected German trade balance. The report showed a 22.2 billion EUR surplus versus the estimated 17.3 billion EUR figure and the previous 16.4 billion EUR. However, the new set of Russian sanctions threatened to push growth for the region lower and drove the euro down. Sentix investor confidence slipped to negative territory with a -9.8 reading, indicating pessimism.

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The pound continued to fall against the dollar but managed to recover against other currencies. Halifax HPI showed a mere 0.1% uptick instead of the projected 0.2% gain and another set of polls emphasized the possibility of Scottish independence, which might lead to political and economic uncertainty for the UK. UK manufacturing production and trade balance data are due today, but the bigger FX trading market-mover might be BOE Governor Carney’s speech.

The franc resumed its decline to the dollar yesterday, as Swiss data came in mixed. The jobless rate held steady at 3.2% as expected while the CPI showed a flat reading instead of the projected 0.1% decline. Retail sales was much weaker than expected at -0.6% instead of the projected 3.7% gain. There are no reports up for release from Switzerland today.

The yen gave up more ground to the dollar and most of its major FX trading counterparts recently, as data from Japan continued to disappoint. Trade balance and the Economy Watchers sentiment index both came in below expectations while the tertiary industry activity index released today showed a flat reading instead of the projected 0.3% gain. Consumer confidence and preliminary machine tool orders data are due today, along with the BOJ monetary policy minutes.

The Australian dollar chalked up losses to its counterparts when China’s trade balance indicated a massive decline in imports, posing negative prospects for Australia’s trade industry. Building permits in Canada surged by 11.5% but it wasn’t enough to keep the Loonie afloat against the dollar. Australia NAB business confidence dipped from 10 to 8 while home loans showed a weaker than expected increase, adding more weight to the Aussie in today’s trading. Canadian housing starts data is due in the US FX trading session.

To contact the reporter of the story: James Brennan at james@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.