Daily FX Trading Update: FOMC Statement Coming Up – July 29, 2015

Daily FX Trading Update: FOMC Statement Coming Up - July 29, 2015

The dollar was hit by profit-taking activity in yesterday’s US trading session, with traders closing off their long positions ahead of the FOMC statement today. Data from the US came in mixed yesterday, as the CB consumer confidence index fell from 99.8 to 90.9 versus the projected 100.1 figure while the Richmond manufacturing index beat expectations. The Fed could hesitate to commit to any tightening this year, as another set of commodity price declines are in the cards. However, if Yellen gives upbeat remarks, the US dollar could regain a lot of ground.

The euro gave back some of its recent wins since there were no reports released from the euro zone yesterday. Today has the German GfK consumer sentiment figure on tap and an unchanged reading from the previous 10.1 figure is expected. Stronger than expected results could give the shared currency a boost while a drop could lead to further losses.

The pound drew a bit of support from the UK preliminary GDP release, which came in line with expectations of 0.7% growth for Q2. On a more upbeat note, the previous reading was upgraded to show a 0.4% expansion. Medium-tier data from the UK are lined up today, namely net lending to individuals, mortgage approvals, and CBI realized sales.

The franc regained a bit of ground in recent trading sessions, mostly because traders booked profits off their dollar trades and possibly pursued other safe-havens like the Swissy. The Swiss UBS consumption indicator is due today and an improvement from the previous 1.73 reading might lead to more franc gains.

The yen gave back its recent wins as risk sentiment improved in recent trading sessions. Earlier today, Japan printed a stronger than expected retail sales figure of 0.9% versus the projected 0.8% increase but weaker compared to the previous 3.0% gain. No other reports are lined up from Japan today, indicating that risk sentiment could keep pushing yen pairs around.

Commodity Currencies (AUD, NZD, CAD)
The comdolls were able to score some gains in recent sessions, despite the selloff in Chinese equities and commodities. The Chinese government and central bank doled out another round of stimulus efforts to stem the selloff in the stock market, leading to a bounce among comdolls as well. Earlier today, RBNZ Governor Wheeler said that the New Zealand economy isn’t weak enough to warrant a large rate cut, and these words spurred gains for the Kiwi. No reports are due from the comdolls today.

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.