USD

The US dollar was a big winner last week, as risk aversion and the prospect of a Fed rate hike pushed the currency higher. 

This week, pricing in of expectations ahead of the FOMC statement and the actual reaction to the event might drive dollar pairs. For today, medium-tier reports like the Empire State manufacturing index and the industrial production data are up for release and might have a minimal impact on dollar movements.

EUR

The euro continued to weaken against its forex counterparts at the end of last week as the ECB’s ongoing QE program and the region’s weak fundamentals dragged the shared currency lower. There are no top-tier reports due from the euro zone today although ECB Governor Draghi’s speech might have an impact on euro movements. 

GBP

The pound was also in a weak spot last Friday, as UK construction output marked a worse than expected 2.6% decline instead of the projected 1.4% increase. Only the UK CB leading index is up for release today and it might not be enough to keep the British currency supported even with a stronger than expected reading. 

CHF

The franc consolidated just above parity to the dollar, as traders booked profits off key resistance levels. Swiss PPI and retail sales data are up for release, with producer prices set to show a 0.4% uptick and retail sales to mark a 2.6% annualized increase. Stronger than expected data might lend more support for the franc while weak figures could allow the declines to resume. 

JPY

The yen took advantage of the run in risk aversion and advanced to most of its forex counterparts while consolidating to the dollar. Japan’s industrial production reading was downgraded from 4.0% to 3.7% in January, indicating a weaker gain than initially estimated. There are no reports due from Japan today, leaving yen pairs sensitive to risk sentiment. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls resumed their slide last Friday, as risk aversion stayed in the markets throughout the week. Canada printed a smaller than expected 1K decline in hiring instead of the estimated 3.5K drop while the jobless rate climbed from 6.6% to 6.8%. Components of the report show that the losses were concentrated in the oil-related industries and cities. Canadian foreign securities purchases data is up for release today. 

By Kate Curtis from Trader’s Way