USD

The US dollar regained its strength in yesterday’s trading as a combination of risk aversion and strong US new home sales boosted the safe-haven currency.

The actual new home sales figure showed a 497K reading, higher than the estimated 482K figure. However, the previous month’s report was revised down to show a 459K figure. US durable goods orders data are scheduled for release today and the headline figure is slated to print a 1.1% increase while the core version of the report could show a 0.5% uptick. Stronger than expected data could lift the dollar against its counterparts once more.

EUR

Euro zone PMI figures all came in stronger than expected for July, with Germany’s reports showing an expansion in its manufacturing and services industries. This was enough to push the region’s manufacturing PMI above the 50.0 mark as well, showing that the industry grew for the month. Spanish jobs data and German Ifo business climate index are up for release today. Germany’s business climate reading is expected to improve from 105.9 to 106.3 while Spain’s jobless rate could hold steady at 27.2%.

GBP

The pound was unable to hold on to its recent gains against the dollar as GBP/USD failed to break past the 1.5400 handle. UK CBI industrial orders expectations came in line with consensus, as it improved from -18 to -12. The UK preliminary GDP figure is up for release today and a 0.6% growth figure is expected. Stronger than expected data could push GBP/USD past 1.5400 while weak data could trigger a sharper selloff.

CHF

There were no reports released from Switzerland yesterday, leaving the franc victim to dollar strength. Switzerland’s schedule is empty again today, which suggests that USD/CHF could move according to US data once more.

JPY

Japanese CSPI came in weaker than expected at 0.4% instead of the estimated 0.7% increase. Inflation data is coming up in the next Asian session and these could be crucial in determining if the BOJ’s stimulus plans are still working or if additional easing is needed.

Commodity Currencies (AUD, NZD, CAD)

The Aussie and Kiwi gave way to dollar strength yesterday, as both commodity currencies were weighed down by weak Chinese PMI. HSBC reported a deeper contraction of 47.7 for July as the index was expected to improve from 48.2 to 48.6. Australian quarterly CPI came in line with consensus at 0.4%, which suggests that the RBA doesn’t need to implement additional stimulus anytime soon. As for the Loonie, CAD bulls continued to push the currency higher against most of its other counterparts thanks to strong Canadian retail sales for May.

By Kate Curtis from Trader’s Way