Daily FX Trading Update: UK CPI, US Retail Sales Coming Up – July 14, 2015


The US dollar regained ground against most of its forex counterparts when risk aversion popped its head back in the markets yesterday. Even with a Greek bailout deal in the works, traders still don’t seem to be buying into the idea that this could stabilize the financial situation in the region. There were no reports released from the US economy then while today has the retail sales figures on tap. The headline figure could show a 0.2% uptick while the core figure could show a 0.7% gain, weaker than the previous 1.2% increase in headline retail sales and 1.0% rise in core retail sales. Stronger than expected data could still keep the dollar supported.

The euro didn’t seem to be too happy about Greece’s revised reform proposal, as this could end up being too strict on austerity and putting the debt-ridden nation much deeper in recession. The German ZEW economic sentiment index is due today and it could show a drop from 31.5 to 30.6 for July while the region’s figure could fall from 53.7 to 51.1. Further developments on the Greek bailout deal could continue to push euro pairs around.

The pound managed to score a few gains then retreat in recent trading sessions, as there were no top-tier economic releases from the UK yesterday. Today has the UK CPI and BOE Inflation Report hearings on tap and these might spur additional volatility for pound pairs. The headline CPI is expected to fall from 0.1% to 0.0% while the core CPI could stand its ground at 0.9%. BOE Governor Carney also has a speech lined up and if he reiterates his confidence in the UK economic outlook, the pound might be in for more gains.

The franc was also in a weak spot recently and even chalked up losses to the euro, as traders were cautious about another SNB intervention. Swiss PPI is up for release today and market participants are expecting to see a 0.2% rebound from the previous 0.8% decline. Apart from that, Greek debt updates could also spur moves among franc pairs.

The yen posted losses in earlier trading sessions but regained ground as risk aversion returned later on. Data from Japan was mixed, with the industrial production report showing a small upgrade and the tertiary industry index missing expectations with its 0.7% drop. No reports are lined up from Japan today, keeping risk sentiment in play.

Commodity Currencies (AUD, NZD, CAD)
The comdolls weakened to the dollar in recent trading session, as commodity prices resumed their slump. The Aussie managed to score some gains earlier today though, after Australia printed an improvement in its NAB business confidence index. There are no other reports lined up from the comdoll economies today.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com