USD

The US dollar erased some of its progress in the past trading days as the government shutdown and budget impasse continues. 

President Obama has still rejected the latest proposal for spending cuts, despite the round of negotiations conducted last week. There’s no report on the US schedule for today since banks are on holiday in observance of Columbus Day so watch out for low liquidity and high volatility in today’s price action. 

EUR

The euro edged slightly higher to the dollar on Friday, mostly because of USD weakness rather than actual euro strength. Data from the euro zone has been in line with consensus, as the German final CPI reading stayed flat while the wholesale price index showed a 0.7% uptick. For today, euro zone industrial production is up for release and a 0.8% rebound is eyed to follow the previous 1.5% decline. Eurogroup meetings are also set to start today. 

GBP

The pound ended another day in the red against the US dollar, although GBP/USD has been finding support around 1.5950. There were no reports released from the UK on Friday and none are due today, so pound trading could be subject to risk flows. 

CHF

The franc pretty much finished off where it started on Friday, as there were no reports released from Switzerland then. There are still no reports up for release today so more consolidation could be seen, but be mindful of the impact of U.S. budget updates on risk sentiment. 

JPY

The yen gave up a lot of its recent gains on Friday as the improvement in risk sentiment led to a selloff for the lower-yielding currency. There hasn’t been much in terms of data but medium-tier releases have printed stronger than expected results last week. Japanese banks are on holiday today so expect either quiet trading or high volatility from low volumes. 

Commodity Currencies (AUD, NZD, CAD)

Thanks to the improvement in sentiment, comdolls were able to make headway on Friday. The Canadian dollar was also supported by the improvement in Canada’s hiring sector, although the actual employment change figure fell short of consensus. There are no reports due from these economies today but watch out for the release of Chinese CPI, as this could have an effect on the Australian dollar. Higher inflation of 2.8% is expected compared to the previous  2.6% reading. 

By Kate Curtis from Trader’s Way