USD

The US dollar managed to end the day higher than most of its major counterparts despite a round of weak economic data.

The trade balance release showed a wider deficit, indicating weakness in trade, while the initial jobless claims showed a higher than expected reading. The ISM non-manufacturing PMI did show an improvement but it failed to meet the consensus. For today, the NFP release could set the tone for dollar movement for the longer run, as it would confirm whether the Fed was correct or not with its assessment of the US labor market. Analysts expect to see a reading of around 200K, which would be enough to bring the jobless rate down to 6.6%.

EUR

The euro was in for a lot of volatility yesterday, particularly when Draghi gave his press conference. The ECB decided to keep interest rates unchanged for the meantime as expected, but Draghi shared that he is concerned about economic stagnation. In his forward guidance, he disclosed that the ECB discussed further easing options like negative rates or large-scale bond purchases. German factory orders are due today and a mere 0.5% uptick is eyed, lower compared to the previous 1.2% gain. Another weaker than expected report from euro zone’s largest economy might push for a deeper euro decline.

GBP

The pound returned some of its recent gains yesterday when the services PMI fell short of expectations. The actual reading slipped from 58.2 to 57.6 reflecting a slower expansion in the industry and this led to a pound decline because services comprises a huge chunk of the UK economy’s activity. Only the Halifax HPI is due from the UK today and this might not move the pound around so much. A 0.7% increase in HPI is expected to follow the previous month’s 2.4% gain.

CHF

The franc gave up a lot of ground to the dollar and the rest of its forex counterparts in yesterday’s trading despite the lack of data from Switzerland. Perhaps the franc was following the euro’s moves and the shared currency was weighed down by dovish remarks from the ECB. There are no reports lined up from Switzerland today.

JPY

The yen was still on a weak footing against most of its currency rivals but its losses were subdued yesterday. There have been no major reports released from Japan and none are due today, but it appears that Asian traders are showing some support for the safe-haven currency as tension is sparking between South Korea and North Korea again.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a shaky trading day, as NZD and AUD tried to hold on to their recent levels. Canadian trade balance came in line with consensus, as the deficit of 0.3 billion CAD turned into a surplus. Canada is set to print its jobs data today and might show a 21.5K gain in hiring, enough to erase the 7K jobs lost in the previous month. However, this release might be overshadowed by the NFP event.

By Kate Curtis from Trader’s Way