Daily FX Trading Update: Canadian Jobs Report Shows Weak Spots in Oil Sector – Mar 16, 2015

Daily FX Trading Update: Canadian Jobs Report Shows Weak Spots in Oil Sector - Mar 16, 2015

The US dollar was a big winner last week, as risk aversion and the prospect of a Fed rate hike pushed the currency higher in FX trading. This week, pricing in of expectations ahead of the FOMC statement and the actual reaction to the event might drive dollar pairs. For today, medium-tier reports like the Empire State manufacturing index and the industrial production data are up for release and might have a minimal impact on dollar movements.

The euro continued to weaken against its FX trading counterparts at the end of last week as the ECB’s ongoing QE program and the region’s weak fundamentals dragged the shared currency lower. There are no top-tier reports due from the euro zone today although ECB Governor Draghi’s speech might have an impact on euro movements.

FX Trading News

The pound was also in a weak FX trading spot last Friday, as UK construction output marked a worse than expected 2.6% decline instead of the projected 1.4% increase. Only the UK CB leading index is up for release today and it might not be enough to keep the British currency supported even with a stronger than expected reading.

The franc consolidated just above parity to the dollar, as traders booked profits off key resistance levels. Swiss PPI and retail sales data are up for release, with producer prices set to show a 0.4% uptick and retail sales to mark a 2.6% annualized increase. Stronger than expected data might lend more support for the franc while weak figures could allow the declines to resume.

The yen took advantage of the run in risk aversion and advanced to most of its FX trading counterparts while consolidating to the dollar. Japan’s industrial production reading was downgraded from 4.0% to 3.7% in January, indicating a weaker gain than initially estimated. There are no reports due from Japan today, leaving yen pairs sensitive to risk sentiment.

The comdolls resumed their slide last Friday, as risk aversion stayed in the markets throughout the FX trading week. Canada printed a smaller than expected 1K decline in hiring instead of the estimated 3.5K drop while the jobless rate climbed from 6.6% to 6.8%. Components of the report show that the losses were concentrated in the oil-related industries and cities. Canadian foreign securities purchases data is up for release 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.