USD

The US dollar regained ground against most of its forex rivals, except for the British pound, yesterday when data came in mostly stronger than expected. 

The headline and core CPI readings missed expectations, but the initial jobless claims, current account balance, Philly Fed index, and CB leading index came in strong. There are no major reports due from the US economy today, leaving the dollar sensitive to risk flows. Keep in mind though that FOMC member Williams has a testimony lined up.

EUR

The euro kept its gains limited in recent trading as the Eurogroup meetings still failed to come up with an action plan for Greece. The leaders set an emergency meeting for Monday in hopes of ironing out the technical details need to reform the country’s pension system, which might be key to unlocking the next set of bailout funds and allowing the country to avoid defaulting this month. There have been no reports released from the euro zone then and only the German PPI and euro zone current account balance are due today.

GBP

The pound extended its gains yesterday, thanks to stronger than expected UK retail sales data. The report showed a 0.2% uptick in May instead of staying flat, but the previous month’s reading was downgraded to show just a 0.7% uptick. The UK public sector net borrowing report is lined up for today and another good reading might lead to more gains for the pound.

CHF

 The franc had a bit of a volatile day since SNB officials made some remarks regarding franc strength during their policy statement. At the end of the day, no actual policy measures were announced, allowing the currency to breathe a sigh of relief. For today, the Swiss calendar is empty, which means that the franc might just follow in the euro’s footsteps.

JPY

The yen was stuck in consolidation mode ahead of today’s BOJ interest rate decision. No actual policy changes are expected but the central bank might take this opportunity to highlight the strength in the economy and emphasize that no further easing is needed, which might then keep the yen supported.

Commodity Currencies (AUD, NZD, CAD)

 The Kiwi was still reeling from the weak New Zealand GDP release throughout the day, but the Canadian dollar managed to advance against its counterparts. For today, Canada is set to print its CPI and retail sales reports, with strong readings likely to give the Loonie another boost. Core CPI is expected to pick up by 0.3% while headline CPI might show a 0.4% increase. Core retail sales could increase by 0.3% while headline retail sales could rise by 0.7%.

By Kate Curtis from Trader’s Way