Daily FX Trading Update: Risk Aversion Back in the Markets? – Oct 27, 2015

Daily FX Trading Update: Risk Aversion Back in the Markets? - Oct 27, 2015
The US dollar had a mixed performance, as it reacted mostly to risk sentiment and a bit of profit-taking from the recent strong moves. New home sales data from the US was weaker than expected, as the figure landed at 468K while the previous reading was downgraded to 529K. US CB consumer confidence and flash services PMI are lined up for today, along with durable goods orders data.
The euro continued to weaken against most of its peers, although some signs of retracement have popped up. Data from the euro zone was actually better than expected, with most of the PMI readings from Germany and France surprising to the upside. Only euro zone data on M3 money supply and private loans are up for release today.
The pound was able to advance in yesterday’s trading sessions, despite weaker than expected BBA mortgage approvals data from the UK. For today, the preliminary GDP reading is up for release and a 0.6% growth figure is eyed. Stronger than expected data could allow the pound to extend its rallies, as this would remind traders that the BOE is still on track to hike rates sometime next year.
The franc was in a weak spot against most of its peers even though there were no major reports out of Switzerland. The increased odds of additional ECB easing suggests that the SNB might be looking into forex intervention once more in order to make sure the franc stays weak. No reports are due from Switzerland today.
The yen was able to rake in some gains in recent trading sessions, as risk appetite appeared to weaken. There have been no major reports out of Japan but most economic figures came in the red yesterday, keeping risk aversion in play. There are still no reports due from the country today, which suggests that yen pairs might be sensitive to market sentiment.
Commodity Currencies (AUD, NZD, CAD)
The comdolls returned some of their recent wins after the PBOC rate cuts, as traders were unsure whether or not these easing efforts could translate to stronger growth prospects. Data from New Zealand was worse than expected, as the trade balance indicated a wider deficit for September and a downgrade in the August report.There are no major reports lined up from the comdoll economies 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.