USD

The US dollar staged a strong rally against its forex counterparts when a couple of Fed officials gave a hawkish bias in their recent testimonies. 

Market watchers are back to pricing in the possibility of a Fed rate hike in June, although Fed head Yellen previously clarified that they would adjust their forward guidance when they are ready to tighten. Data from the US was mixed, as the core CPI marked a worse than expected 0.7% decline while the headline CPI showed a stronger than expected 0.2% uptick. Durable goods orders data was also mixed, with the headline figure marking a 2.8% gain and the core figure showing a mere 0.3% uptick. US preliminary GDP is due today and a downgrade from 2.6% to 2.1% is eyed.

EUR

The euro suffered massive losses once more, despite stronger than expected data from Germany. The GfK consumer climate report marked a gain from 9.3 to 9.7, outpacing the consensus at 9.6. Meanwhile, the unemployment change reading showed a 20K drop in joblessness, twice as much as the projected 10K decline. German preliminary CPI and French consumer spending data are lined up for today, but it seems that not even strong data could stop the euro’s slide.

GBP

The pound gave up its recent wins when data from the UK came in mostly weaker than expected. Although the GDP reading was unchanged at 0.5% as expected, the preliminary business investment report showed a worse than expected 1.4% drop for Q4 while the previous reading was downgraded. There are no reports lined up from the UK today.

CHF

The franc resumed its slide to the dollar in recent trading, as euro weakness also dragged the Swiss currency along. There have been no reports from Switzerland then and none are due today, which means that the franc might continue to follow the euro’s footsteps or be driven by market sentiment.

JPY

The Japanese yen seemed to ignore the weaker than expected data released earlier today, as the currency continued to advance against most of its counterparts. Household spending and retail sales were both significantly weaker than expected, while the national core inflation figure slumped from 2.5% to 2.2% in January. Industrial production showed an impressive 4.0% monthly gain though, spurred mostly by the pickup in exports of electronic components and automobiles. No other reports are lined up from Japan today but the prospect of further BOJ stimulus might weigh on the currency later on.

Commodity Currencies (AUD, NZD, CAD)

The comdolls erased their recent gains after the dollar surged strongly in recent trading. Data from Canada was stronger than expected, as both headline and core inflation printed 0.2% gains. In New Zealand, ANZ business confidence improved from 30.4 to 34.4. No other reports are due from the comdoll economies today.

By Kate Curtis from Trader’s Way