USD

The dollar continued its dominance on Friday as risk aversion stayed in the financial markets. Small bounces among major forex pairs were seen towards the end of the US session, as traders booked profits ahead of this week’s top-tier events and central bank statements.

As for the US economy, data was mixed on Friday as personal spending slipped by 0.1% but personal income showed a 0.3% uptick. Chicago PMI was stronger than expected at 65.5 while consumer sentiment was revised down to 81.9. For today, US ISM manufacturing PMI is up for release and an improvement from 54.9 to 55.7 is expected.

EUR

The euro sold off to most of its major counterparts on Friday as traders started pricing in the possibility of seeing further easing form the ECB this week. Data from the euro zone was very weak, with Germany reporting a 0.9% decline in retail sales. Spanish flash CPI was weaker than expected at 0.2% while Italy’s CPI showed a 0.1% decline in price levels. This ups the odds for a weaker euro zone CPI forecast, which might be enough for traders to price in QE from the ECB on Thursday’s announcement.

GBP

The pound was still weak to the dollar but did show some signs of a rebound. There were no reports released from the UK on Friday, which explains why the currency was unable to draw much support. Net lending to individuals and mortgage approvals are up for release today and weak figures might lead to more pound selling ahead of the BOE rate statement later this week.

CHF

The franc showed signs of a recovery on Friday, mostly because traders booked profits at the end of the month. Switzerland’s economic data was actually weak, as the KOF economic barometer showed a decline to 99.79 while the previous period’s reading was downgraded to 101.81. SVME PMI is due today and a small dip from 55.8 to 55.7 is eyed, but a weaker reading might lead to more franc losses.

JPY

The yen sold off to most of its counterparts on Friday, as traders digested the weakness shown by the recent Japanese data incorporating the effect of the April sales tax hike. The rise in inflation was promising but traders though that the impact on spending might be short-lived, leading to a bit of support for the yen at the end of the day. Capital spending was stronger than expected. There are no other reports due from Japan today, which suggests that yen pairs might be sensitive to risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

Performance of the comdolls was mixed on Friday, as the Loonie and Kiwi weakened while the Aussie rallied. Data from Canada was weaker than expected, as the GDP report showed quarterly growth of only 1.2% while the previous quarter’s GDP reading was revised lower. Australia’s building approvals report showed weakness earlier today, undoing some of the Aussie’s recent gains. Trading among these pairs might be quiet today, with no other reports on tap and with traders gearing up for the RBA statement and Australian retail sales release tomorrow.

By Kate Curtis from Trader’s Way