Daily FX Trading Review: US and Canadian Banks on Labor Day Holiday – Sept 1, 2014

Daily FX Trading Review: US and Canadian Banks on Labor Day Holiday - Sept 1, 2014

The US dollar regained ground on Friday, as traders booked profits at the end of the FX trading month and prior to the Labor Day holiday. Data from the US economy was mixed, with personal spending and income reports falling short of expectations and the Chicago PMI and revised UoM consumer sentiment printing better than expected results. US banks are on holiday today so volatility might be lower in the New York trading session.

The euro resumed its drop in the latest FX trading session, as traders started pricing in expectations for this week’s ECB rate statement. Apart from that, data from the euro zone has been mixed with the headline CPI flash estimate unchanged at 0.3% and the core estimate upgraded from 0.8% to 0.9%. German retail sales posted weaker than expected results, as it marked a 1.4% decline in spending. Italian and Spanish manufacturing PMI are up for release today, along with the final German GDP reading.

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The pound continued to consolidate to the dollar last week, with a stronger than expected Nationwide HPI figure released on Friday. The report showed a 0.8% increase in house prices, stronger than the estimated 0.1% uptick and the previous 0.2% rise. UK manufacturing PMI is up for release today and a drop from 55.4 to 55.1 is eyed.

The franc returned its recent FX trading gains, despite stronger than expected data from Switzerland on Friday. The KOF economic barometer reading climbed from 97.9 to 99.5, although the previous reading was downgraded. SVME PMI is due from Switzerland today and it might show a dip from 54.3 to 53.8, with a weaker than expected reading likely to push the franc lower against its counterparts.

The yen gave up ground to its FX trading counterparts when traders started placing bets on BOJ easing for this week. Data from Japan has been mostly weaker than expected on Friday, with household spending, employment, and industrial production falling below consensus. Retail sales was better than expected at a 0.5% uptick instead of the projected 0.1% decline. CPI figures came right in line with expectations. Earlier today, Japanese capital spending data also came in below expectations.

The comdolls retreated to the dollar on Friday, as most traders booked FX trading profits off their long trades. ANZ business confidence in New Zealand marked a sharp decline while Australia’s private sector credit report missed the mark. Canadian GDP was much stronger than expected yet underlying inflation figures hinted at weaker price pressures later on. Chinese HSBC and official manufacturing PMI came in line with expectations earlier today and helped support the Aussie. No other reports are due from the comdoll economies for today, as Canadian banks are also closed for the holiday.

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.