Daily Forex Review: Weak Data Weighs on CAD – July 8, 2014

Daily Forex Review: Weak Data Weighs on CAD - July 8, 2014

The US dollar retreated to most of its major forex counterparts in yesterday’s trading sessions, as there were no reports to give it any support. Only low-tier reports are due from the US economy today, although traders might start pricing in expectations for the FOMC minutes release. Do stay tuned for the JOLTS job openings data, NFIB small business index, and consumer credit data in today’s US trading session.

The euro made a quick bounce to its forex trading counterparts, despite mixed data from the euro zone. German industrial production showed weaker than expected results as a 1.8% decline was reported instead of the estimated 0.3% uptick while the previous figure was downgraded to show a 0.3% drop. Euro zone Sentix investor confidence data marked an improvement, as the reading climbed from 8.5 to 10.1 instead of dipping to the projected 7.5 figure. German and French trade balance are up for release today.


Forex Fundamentals

The pound managed to hold on to its recent gains even though there were no economic reports released from the UK yesterday. Halifax HPI and UK manufacturing production data are due today, both of which are likely to boost the pound higher if the actual figures come in strong. However, house prices are projected to show a 0.3% decline while manufacturing production could show another 0.4% uptick.

The franc regained ground as the Swiss jobless rate held steady at 3.2% while the foreign currency reserves report showed a higher reading. For today, Swiss CPI and retail sales data are due. The CPI could print a 0.1% uptick while retail sales might show an annualized 1.5% gain, an improvement from the previous 0.4% reading. Stronger than expected figures might lead to more gains for the franc.

The yen took advantage of the run in risk aversion in recent trading sessions, despite the lack of top-tier releases from Japan. Earlier today, the Japanese current account release showed a stronger than expected reading of 0.38 trillion JPY, more than twice as much the expected 0.17 trillion JPY surplus and a strong improvement from the previous 0.13 trillion JPY reading. Bank lending climbed from 2.2% to 2.3%. The Economy Watchers Sentiment index is up for release today and an improvement could be positive for the yen again.

The Aussie and Kiwi regained ground to the dollar while the Loonie showed weakness in recent trading sessions. Data from Australia, namely the AIG construction index and ANZ job advertisements, showed improvements yet Canada’s Ivey PMI turned out to be a huge disappointment as the reading fell from 48.2 to 46.9. Building permits, however, showed stronger than expected results of a 13.8% gain with an upward revision to the previous month’s reading. Only the Australian NAB business confidence report is due today.

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.