Daily FX Trading Update: Risk Aversion Supports USD – Apr. 14, 2015

Daily FX Trading Update: Risk Aversion Supports USD - Apr. 14, 2015

The US dollar continued to gain ground in the earlier FX trading sessions but gave up some of its wins during the New York hours. Data from the US has been weaker than expected, as the federal budget balance came short of consensus. US retail sales data are up for release today and analysts are expecting to see decent rebounds. The headline reading is slated to post a 1.1% gain while the core figure could show a 0.7% uptick. Stronger than expected data could renew demand for the US dollar while weak figures could lead to an extended selloff.

The euro was one of the weakest performing currencies in yesterday’s FX trading sessions, despite stronger than expected data from the region. Italy posted a 0.6% gain in industrial production, higher than the projected 0.5% uptick. It appears that Greek debt woes continue to weigh on the shared currency, which might be in for more losses since there are no major reports lined up from the region today.

FX Trading News

The pound made a slight recovery in yesterday’s latter FX trading sessions even though there were no reports released from the UK then. Today has the CPI figures on tap, with more price declines expected. The headline reading is likely to stay flat but a negative figure might lead to more pound weakness. Meanwhile, the core figure is expected to stay unchanged at 1.2%. PPI input figures are also due and it could print a downturn in producer price levels.

The franc was able to bounce back in recent FX trading, despite the lack of data from Switzerland. There are still no reports lined up from the Swiss economy today, which suggests that market sentiment might drive franc movements.

The yen advanced to its FX trading counterparts when risk aversion extended its stay in the financial markets. Data from Japan has also been stronger than expected, with the core machinery orders and PPI beating expectations. There are no reports due from Japan today, leaving risk sentiment as the main driver of yen price action.

The comdolls recouped some of their losses in recent FX trading although weakness is still evident. In Australia, NAB business confidence improved from 0 to 3 while New Zealand reported a dip in NZIER business confidence from 24 to 23. There are no major reports due from the comdoll economies today as traders brace themselves for the Chinese data releases in the next Asian trading session.

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.