Daily FX Trading Update: UK GDP Disappoints, FOMC Statement Due – Apr. 29, 2015

Daily FX Trading Update: UK GDP Disappoints, FOMC Statement Due - Apr. 29, 2015

Dollar traders seem to be reducing their long positions ahead of the FOMC interest rate statement in today’s US session, as the currency gave up more ground to its FX trading counterparts. It didn’t help that US data was weaker than expected, with the CB consumer confidence index falling from 101.4 to 95.2 instead of improving to the projected 102.6 figure. The Richmond manufacturing index was also weaker than expected, although it did improve from -8 to -3. Also lined up today is the US advanced GDP reading, which might show a 1.0% growth figure, weaker than the 2.2% expansion for the previous quarter.

The euro continued to climb against the dollar but was mostly weaker against the rest of its FX trading counterparts, as traders have started to become impatient about the Greek debt situation. There have been no reports released from the euro zone then while today has the German preliminary CPI reading on tap. A 0.1% decline in price levels is expected, down from the previous 0.5% uptick in inflation.

FX Trading News

The pound managed to advance against the dollar despite weaker than expected UK GDP, but was slightly weaker to its other FX trading rivals. The economy posted a 0.3% growth figure for the first quarter, lower than the projected 0.5% expansion and the previous 0.6% GDP reading. No major reports are due from the UK today.

The franc gave up ground to its FX trading counterparts despite the lack of top-tier data from Switzerland. Only the UBS consumption indicator is due today and this might not be enough to stop the franc’s bleeding, although a small improvement from the previous 1.19 figure is expected.

The yen was off to a rocky start, thanks to a downgrade from Fitch ratings agency and a weaker than expected retail sales report. Consumer spending slumped by 9.7% in March, much worse than the estimated 7.4% drop and the previous 1.7% slide. The yen managed to recover as risk aversion settled in and traders moved their safe-haven holdings from the dollar to the Japanese currency.

The comdolls advanced against the dollar in recent FX trading sessions, as a few improvements in Australia and New Zealand were seen. Australia’s CB leading index showed a 0.5% gain for February while New Zealand reported a higher than expected trade surplus of 631 million NZD. Later on, the RBNZ is set to make its monetary policy decision and dovish remarks might force the Kiwi to retreat.

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.