Daily FX Trading Update: EUR Rebounds But Risk-Off Persists – Jan 7, 2016

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Daily FX Trading Update: Markets Uneasy Ahead of FOMC - Dec. 15, 2015
USD
The US dollar had a mixed performance as it advanced to the commodity currencies and pound but gave up ground to the yen and the euro. Data from the US economy was also mixed, with the ADP report printing strong results and the ISM non-manufacturing PMI falling short. Factory orders fell by 0.2% as expected while the trade balance showed a smaller deficit, although this was caused by drops in both imports and exports. The initial jobless claims report is due today.
EUR
The euro managed to recoup some of its losses even as the services PMI readings from its top economies came in mixed. German factory orders and retail sales data are due today and small gains are eyed, with stronger than expected results likely to boost the shared currency.
GBP
The pound was still in a weak spot even as the services PMI came in closely in line with expectations. The figure fell from 55.9 to 55.5 in December, slightly lower than the estimated 55.6 reading but still reflective of a slower pace of industry growth. Only the Halifax HPI is due from the UK today.
CHF
The franc took its cue from the euro and regained ground against most of its counterparts, even though there were no reports out of Switzerland yesterday. Swiss foreign currency reserves data are up for release today and a sharp gain could suggest that the SNB is starting to intervene in the currency markets once more.
JPY
The yen continued to rake in gains on the risk-off market environment, chalking up its largest wins to the commodity currencies. There were no reports out of the Japanese economy yesterday and none are due today, indicating that risk sentiment could stay in play.
Commodity Currencies (AUD, NZD, CAD)
The comdolls continued to lose ground as risk aversion stayed in the financial markets. Not even the decline of 5.1 million barrels in crude oil inventories was enough to keep oil and the Loonie afloat, as traders focused on the buildup in other energy resources. In Australia, building approvals came in much weaker than expected while the trade balance came in line with expectations. A speech by BOC Governor Poloz is lined up, along with the Ivey PMI which might fall from 63.6 to 56.7.
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.