USD

The US dollar chalked up losses in recent trading, as risk appetite continued to improve. Data from the US was also weaker than expected, with headline retail sales printing a 0.4% decline and core retail sales showing a flat reading.

This wasn’t so surprising since jobs data for the past couple of months have been much weaker than expected. Data on import prices, capacity utilization, industrial production and consumer sentiment are up for release today. Another round of weak US reports might push the dollar lower against its counterparts.

EUR

The euro pushed higher against the dollar and the yen in recent trading, as traders tried to brush aside talks of negative deposit rates by the ECB. There have been no major reports released from the euro zone recently, as the German CPI and ECB monthly bulletin barely made an impact on euro price action. French and German preliminary GDP are due today and strong figures might push the euro higher. A 0.2% GDP expansion is expected for France while Germany might show 0.3% growth.

GBP

The pound continued to take advantage of the hawkish BOE rhetoric and the weak reports from the US. There have been no reports released from the UK yesterday yet GBP/USD extended its rally past the 1.6600 handle. There are no reports lined up from the UK again today so it will be interesting to see whether the pound can keep up with its recent climb until the week comes to a close. CHF The franc took advantage of dollar weakness in yesterday’s trading as Swiss PPI also came in stronger than expected. The report showed no change in producer prices instead of the anticipated 0.1% dip, easing fears of deflation in the country. There are no reports due from Switzerland today so USD/CHF might be in for a bit of consolidation unless there are surprises from US data.

JPY

The yen rallied then reversed in yesterday’s trading, as the dip among most yen pairs was attributed to a quick correction. Risk appetite was still up in recent trading, much to the detriment of the lower-yielding Japanese currency. There have been no major reports released from Japan and none are due today.

Commodity Currencies (AUD, NZD, CAD) After the bleak Australian jobs release and resulting Aussie selloff, the currency was able to make a quick recovery and bounce off the nearby inflection points. The Aussie was also able to draw support from China’s better than expected CPI reading released earlier today. Aside from the medium-tier Canadian manufacturing sales release, there are no reports lined up from the commodity currencies’ economies today.

By Kate Curtis from Trader’s Way