USD

The US dollar lost a lot of ground thanks to the weaker than expected NFP reading of 148K for September. 

This marks the third consecutive month that the jobs report has missed expectations, although the jobless rate improved from 7.3% to 7.2%. A reading below 150K suggests that the Fed isn’t likely to taper at all for the rest of the year, which explains why the dollar lost its shine. Up ahead, we have US import prices and crude oil inventories data, which aren’t expected to have a huge impact on dollar price action. 

EUR

The euro was able to take advantage of dollar weakness yesterday, as the pair surged past the 1.3700 handle and came close to testing 1.3800. There were no reports released from the euro zone on Tuesday and today has a few medium-tier reports on tap. These are the euro zone consumer confidence, Belgium NBB business climate, and German 30-year bond auction. Better than expected data could help the euro extend its gains while weak figures could trigger a quick retracement. 

GBP

The pound staged a strong rally yesterday, lifted by stronger than expected public sector net borrowing data and weaker than expected NFP figures from the US. Public sector net borrowing was lower than expected at 9.4 billion GBP while the previous month’s figure enjoyed a downward revision, revealing that the UK’s finances are starting to improve. For today, BOE meeting minutes are up for release and hawkish remarks are likely to help the pound head further north. 

CHF

The franc was able to strengthen against the US dollar yesterday, pushing USD/CHF significantly below the .9000 major psychological level. Swiss trade balance printed a higher than expected trade surplus and it also helped that US data was below expectations. For today, there are no reports due from Switzerland as the franc might stay stuck in consolidation or continue to take advantage of dollar weakness. 

JPY

The yen lost a lot of ground to its major counterparts except for the US dollar, as risk appetite stayed in the markets yesterday. There were no reports released from Japan then and none are due today, which suggests that yen pairs might be sensitive to sentiment again. 

Commodity Currencies (AUD, NZD, CAD)

The comdolls were able to soar up the charts yesterday, as risk appetite allowed them to rally against the yen and weak US data pushed dollar pairs much higher. Data from Canada was mixed, with core retail sales coming in stronger than expected at 0.4% and headline retail sales falling short of consensus at 0.2%. Earlier today, Australia printed a strong CPI reading of 1.2% which was enough to boost the Aussie as traders predicted this would soon convince the RBA to hike rates. The BOC is set to make its interest rate decision in today’s US session and is likely to keep policy unchanged. 

By Kate Curtis from Trader’s Way