Daily FX Trading Update: ECB Monetary Policy Statement Due – Apr. 15, 2015

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Daily FX Trading Update: ECB Monetary Policy Statement Due - Apr. 15, 2015

The US dollar suffered a sharp selloff in recent FX trading after the country’s retail sales figures came in short of expectations. Headline retail sales chalked up a 0.9% increase instead of the projected 1.1% gain while core retail sales saw only a 0.4% uptick versus the estimated 0.7% rise. PPI was also weaker than expected with only a 0.2% gain instead of the expected 0.3% increase while core PPI came in line with expectations of a 0.2% rise. US industrial production and capacity utilization numbers are up for release today, along with the Empire State manufacturing index.

The euro managed to recover against the dollar but was still in a weak spot compared to its other FX trading counterparts. Euro zone industrial production was stronger than expected at 1.1% versus the estimated 0.3% uptick, but it seems that traders are paring their bets ahead of today’s ECB rate statement. Governor Draghi might retain his upbeat tone and reiterate that green shoots are seen in the euro zone economy.

FX Trading News

The pound had a volatile FX trading day, thanks to the inflation releases from the UK which mostly came in weaker than expected. Headline CPI held steady at a flat rate while core CPI tumbled from 1.2% to 1.0% in March. Other inflation indicators such as the PPI input, RPI, and HPI all came in weaker than expected, hinting at further downward pressure on consumer price levels. Only the CB leading index is lined up from the UK economy today.

The franc took advantage of dollar weakness and advanced to most of its FX trading rivals, despite the lack of data from Switzerland. There are still no major reports due from the Swiss economy today but the franc might take its cue from euro movements, as any major announcements from the ECB might also affect the Swissy’s direction.

The yen was able to benefit from the onset of risk aversion after China printed weaker than expected economic data in today’s Asian trading session. There have been no reports out of Japan recently while today only has the revised industrial production figure on tap.

The comdolls were badly hurt after China printed mostly weaker than expected data, particularly in retail sales and industrial production. The latter showed a mere 5.6% increase, far weaker compared to the estimated 6.9% gain, while the former showed a 10.2% rise versus projections of a 10.9% increase. The Chinese GDP came in line with expectations of a 7.0% expansion, its weakest pace of growth since 2009. In Australia, Westpac consumer sentiment showed a 3.2% decline, following the previous 1.2% drop. Later today, the BOC will make its policy statement while New Zealand will have its dairy auction.

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.