Daily FX Trading Update: Chinese Data Meets Expectations, BOC Next

The US dollar was in a weaker spot after US CPI reports failed to impress. Headline CPI posted a 0.3% gain as expected, its fastest pace of growth in five months, while core CPI fell short with a 0.1% uptick versus the estimated 0.2% gain. US building permits and housing starts are up for release today, and traders might take their cues from risk sentiment instead. The Fed Beige Book is also up for release.
The euro was still mostly weaker against its peers since there were no reports to support the shared currency yesterday. There are no major reports lined up from the euro zone today so traders could continue to price in expectations for the upcoming ECB rate statement.
The pound enjoyed a bounce after UK CPI readings beat expectations and the British parliament seemed likely to vote on a Brexit deal before Article 50 is invoked, easing fears of a hard Brexit. Headline CPI was up from 0.6% to 1.0% and the core CPI climbed from 1.3% to 1.5%. Employment data is due today, with the claimant count change expected to show a 3.4K increase in joblessness, higher than the earlier 2.4K rise. The average earnings index is expected to hold steady at 2.3% while the unemployment rate is projected to stay unchanged at 4.9% as well.
The franc had a mixed performance as it consolidated to the dollar, advanced to the euro, and gave up ground to the pound. There were no reports out of Switzerland yesterday and there are none due today, which suggests that risk sentiment could play a major role in price action once more.
The yen was able to advance against the dollar and the euro but was mostly weaker against the rest of its peers. There were no reports out of the Japanese economy yesterday while today has the all industries activity index on tap. Analysts are expecting to see a weaker read of 0.2% compared to the estimated 0.3% uptick.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were able to hold on to their gains for the day, with the Loonie getting a fresh boost from a surprise draw in crude oil stockpiles according to API data. US crude oil inventories data is due today and a rise of 2.2 million barrels is eyed. New Zealand reported a gain of 1.4% in dairy prices during the latest GDT auction. Earlier today, China’s reports met expectations in terms of GDP, retail sales, and fixed asset investment but industrial production was weaker than expected. The BOC decision is coming up next.
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.