Daily FX Trading Update: ECB Disappoints, CA Jobs Next

The US dollar regained ground against its peers when risk appetite weakened after the ECB statement. Data from the US came in better than expected at 259K versus the projected 264K reading while consumer credit rose to 17.7 billion USD. US wholesale sales data is due today, along with a speech by FOMC member Rosengren.
The euro rebounded strongly after the ECB refrained from adding stimulus and Governor Draghi sounded less dovish than expected. According to the central bank head, he doesn’t see the need for more easing just yet but that policymakers will continue to monitor the markets. The ECB even upgraded its growth forecast for the year and kept its inflation estimate unchanged. German and French trade balance are up for release today, along with the French industrial production report.
The pound had a mixed performance as it weakened to the dollar and euro but managed to advance against the commodity currencies as risk appetite weakened. There were no reports out of the UK economy yesterday while today has the goods trade balance, consumer inflation expectations, and construction output report due. Stronger than expected data could reinforce pound gains.
The franc stalled in its rally against the dollar and the euro despite the lack of top-tier reports from the Swiss economy. The Swiss jobless rate is due today and no change from the previous 3.3% figure is eyed.
The yen resumed its slide against most of its major counterparts despite the improvement in the country’s Economy Watchers Sentiment index from 45.1 to 45.6. Traders seem to be back to pricing in easing expectations from the BOJ or booking profits from the recent rallies.
Commodity Currencies (AUD, NZD, CAD)
The comdolls gave up their recent wins when risk sentiment turned sour after the ECB refrained from easing. Data from Australia and China showed healthy trade activity, which could continue to keep the higher-yielding currencies supported later on. Also, the US crude oil inventories report showed a large draw in stockpiles. Data from Canada turned out weaker than expected but the Loonie could have a chance to recover if its jobs figures beat expectations today. The employment change report could show a 10.6K gain in hiring, rebounding from the earlier 31.2K drop.
To contact the reporter of the story: Samuel Rae at samuel@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.