USD

The US dollar held on to most of its recent gains as January factory orders came in slightly better than expected at 1.2% versus 1.1%.

This marks the second consecutive positive reading, signaling strong manufacturing activity down the line. US trade balance is due today and a wider deficit of $47 billion is eyed.

EUR 

The euro lost a lot of ground when news broke out that Juppe won’t be running for President in the upcoming elections. This led market watchers to fear that some of his supporters could give their votes to Le Pen, although her lead has been dropping against Macron. Euro zone retail PMI dipped from 50.1 to 49.9 to indicate contraction while the Sentix investor confidence index improved from 17.4 to 20.7. 

GBP

The pound was also in a weak spot even though there were no major reports out of the UK economy yesterday. UK Halifax HPI is due today and a 0.4% rebound in house prices is eyed. Earlier today, the BRC retail sales monitor showed a 0.4% downtick, slower than the earlier 0.6% drop.

CHF

The franc seems to be resuming its slide against its peers, taking the brunt of the European uncertainty plays instead of the euro and the pound. SNB foreign currency reserves data is due today and an increase from the earlier 644 billion CHF figure could be evidence of slight intervention. 

JPY

The yen had a mixed performance as it slid lower to the comdolls but advanced to the European currencies. There were no reports out of Japan yesterday and none are due today, indicating that the currency is reacting to country-specific events and market sentiment. Japanese final GDP and current account balance are due in the next Asian session. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls were mostly weaker against the dollar but they did manage to stem their declines against the euro and the pound. Australian retail sales came in line with expectations of a 0.4% uptick and traders are awaiting a relatively upbeat RBA statement today. Canadian Ivey PMI is due next and a rise from 57.2 to 58.9 is eyed while New Zealand will have its GDT auction in the latter part of the US session.

By Kate Curtis from Trader’s Way