USD

The US dollar returned some of its recent wins as traders probably closed positions ahead of today’s major catalysts.

From the US alone, we’ve got retail sales, PPI, Philly Fed index, initial jobless claims, industrial production, and the current account balance. Headline retail sales could fall by 0.1% while core retail sales could increase by 0.3%. Headline PPI and core PPI are both expected to print 0.1% gains.

EUR

The euro was able to take advantage of dollar weakness and managed to hold on to most of its recent wins, except against the yen. Euro zone industrial production turned out weaker than expected with a 1.1% slump versus the projected 0.8% decline. Final CPI readings are due today and no revisions to the initial estimates are eyed.

GBP

The pound managed to score some wins despite mixed jobs data. The number of claimants rose by 2.4K in August versus the estimated 1.7K increase in joblessness, but the average earnings index came in better than expected at 2.3% versus 2.1% for the three-month period ending in July. The BOE interest rate decision is scheduled for today and no changes to the benchmark rate or asset purchase program are eyed, although MPC members are expected to stay dovish.

CHF

The pound was able to regain ground when the Swiss ZEW economic expectations index rose from -2.8 to +2.7 to indicate a return to optimism. The SNB rate decision is scheduled today and no major adjustments are eyed, even though a bit of the usual jawboning is expected from Chairman Jordan.

JPY

The yen was able to take advantage of the risk-off flows in the markets as BOJ policymakers refrained from commenting on what they might announce or discuss in their policy statement next week. Japan’s industrial production reading was revised to show a 0.4% drop from the initially reported flat reading.

Commodity Currencies (AUD, NZD, CAD)

The comdolls had a mixed performance, as the Aussie consolidated, the Kiwi advanced, and the Loonie lagged. US oil inventories showed a surprise draw of 0.6 million barrels but Loonie traders were still anticipating a buildup in output later on. New Zealand’s economy expanded by 0.9% in Q2, short of the estimated 1.1% growth figure, but the previous reading was upgraded from 0.7% to 0.9%. Australia’s jobs report is due next and a 15.2K increase in hiring is eyed.

By Kate Curtis from Trader’s Way