Daily FX Trading Update: BOJ Kept Monetary Policy Unchanged – Sept 15, 2015

Daily FX Trading Update: BOJ Kept Monetary Policy Unchanged - Sept 15, 2015

Dollar pairs had a mixed performance as traders hesitated to commit to any positions ahead of the FOMC statement later this week. There have been no reports released from the US yesterday, allowing the dollar to function mostly as a counter currency instead. For today, the US retail sales report is up for release and it is expected to show a 0.3% gain for the headline figure and a 0.2% increase for the core figure.

The euro was treading carefully in recent trading sessions, getting a bit of support from stronger than expected euro zone industrial production data. The report showed a 0.6% uptick for July, stronger than the projected 0.3% increase, while the previous reading enjoyed an upgrade. For today, the German ZEW economic sentiment index is up for release and it could show a dip from 25.0 to 18.3. The euro zone ZEW index is also due, along with the region’s employment change reading for Q2.

The pound was stuck in consolidation against most of its forex rivals, as traders are waiting for the top-tier UK reports to be released. The UK CPI is due today and it could show a drop from 0.1% to 0.0% for August while the core version of the report could fall from 1.2% to 1.0%. Producer input prices could show a 2.3% drop while output prices could show a 0.2% decline, putting downward pressure on consumer inflation later on.

The franc managed to advance against the dollar despite weak data from the Swiss economy. PPI showed a 0.7% decline, worse than the projected 0.4% drop, while retail sales slumped by 0.1% instead of picking up by 1.5%. No reports are due from the Swiss economy today, leaving traders to price in expectations ahead of the SNB decision later on.

The yen was still losing ground against its peers before the BOJ statement, which wound up providing some support for the Japanese currency. Board member Kiuchi once again voted to taper asset purchases and to adopt a more flexible inflation-targeting scheme, but he was outvoted by other policymakers who wanted to keep policy unchanged. The press conference is scheduled for later today.

Commodity Currencies (AUD, NZD, CAD)
The comdolls gave up some ground in today’s Asian trading session, as the RBA minutes sounded a bit dovish. Although the central bank decided to keep rates on hold in their official statement, the transcript of the meeting revealed that most policymakers were worried about China and commodity prices. New Zealand’s dairy auction and current account balance release are coming up.

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.