USD

The U.S. dollar is still able to draw support from news of the Fed mapping out its stimulus exit plan, despite the wave of bad economic data from the U.S. last week. 

Inflation reports and manufacturing indices all came in weaker than expected, yet consumer sentiment for the month managed to beat the consensus. There are no major reports on the U.S. schedule for today, as most banks are on a holiday. Be mindful of higher volatility in reaction to FOMC member Evans’ speech in today’s U.S. session.

EUR

The euro dipped to the 1.2800 major psychological support level last week but managed to pullback to 1.2850 earlier this week. Sentiment for the euro remains bearish as the ECB is mulling negative deposit rates and increasing its bond purchases in order to stimulate growth in the region. There are no major reports due from the euro zone today.

GBP                             

The pound is struggling to stay afloat against the U.S. dollar, as this week’s set of data from the U.K. could determine if the pair could hold on to the 1.5200 major psychological level. There are no reports due from the U.K. today as the first set of data, which are the inflation reports, are due tomorrow. U.K. annual CPI is slated to fall from 2.8% to 2.6% for April, which might mean the BOE has enough scope to ease further if necessary.

JPY

The yen lost ground to the dollar on Friday as the latter benefitted from strong consumer sentiment figures, pushing USD/JPY above the 103.00 handle. There are no major reports due from Japan today as traders await the BOJ interest rate decision on Wednesday. Traders could book profits off their yen shorts prior to the actual event as the central bank could highlight the recent developments in the Japanese economy.

CHF                                         

The franc also lost a lot of ground to the U.S. dollar on Friday as the University of Michigan preliminary consumer sentiment figure beat expectations. Swiss banks are on a holiday today, which means that there could be quiet trading among franc pairs.

Commodity Currencies (AUD, CAD, NZD)

There are no major reports from the comdoll economies today as AUD/USD, USD/CAD, and NZD/USD could be more sensitive to U.S. events. Bear in mind that FOMC member Evans is set to testify in today’s U.S. session and he could remark on the need to withdraw stimulus as early as June. If that’s the case, the commodity currencies could continue to sell off against the Greenback.

By Kate Curtis from Trader’s Way