USD

The US dollar was stuck in consolidation against most of its major currency counterparts, although US data came in weaker than expected yesterday.

Preliminary non-farm productivity was higher than expected for the previous quarter so unit labor costs for the same period were understandably lower, which means that laborers had a smaller take-home pay for the three months up to December. Today the non-farm payrolls report is up for release and might show a rebound from the bleak December figures. However, cold weather conditions still affected several US states in January, which could lead to another weak jobs report.

EUR

The euro had a brief rally after the ECB interest rate statement, as Draghi sounded less dovish than usual. He pointed out that interest rates will remain low for an extended period of time but remarked on the improving business conditions. Other policymakers also dismissed the possibility of deflation weighing on overall economic performance. German trade balance and French government balance are the only reports due from the euro zone today, as the NFP might play a bigger role in EUR/USD price action.

GBP

The pound moved sideways in yesterday’s trading, as there were no surprises in the BOE rate statement. The central bank decided to keep interest rates and asset purchases unchanged for the meantime, even though there have been considerable improvements in the UK economy. Manufacturing and industrial production reports are lined up for today, along with the trade balance release.

CHF

The franc formed a tighter consolidation pattern to the dollar yesterday when Swiss data came in mixed. The SECO consumer climate figure jumped from -5 to 2, surpassing the consensus at 0 and indicating improving consumer confidence. However, the trade balance missed the forecast and showed a smaller than expected surplus while the previous month’s figure was revised down. Swiss foreign currency reserves and retail sales data are up for release today and might show improvements, which could then support the franc.

JPY

The yen was beaten up by the improvement in risk sentiment in recent trading, as there were no reports from Japan for the currency to draw support from. Only the Japanese leading indicators figure is up for release today and it might show a small improvement from 111.1% to 111.9%, which could be positive for the Nikkei and risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance in recent trading, with the Aussie ending positive and the Kiwi ending in the red. The Loonie consolidated to the dollar despite the strong Ivey PMI figure since data from the US came in weak. The Ivey PMI climbed back above the expansionary level, which helped keep the Loonie afloat. Canadian jobs data is up for release today and a 19.7K rebound in hiring is eyed.

By Kate Curtis from Trader’s Way