USD

The US dollar regained ground to most of its major counterparts, as traders started positioning ahead of this week’s FOMC statement. 

Data from the US economy came in stronger than expected, with headline retail sales marking a 0.6% gain and the core version of the report showing a 0.3% increase. This was stronger than the estimated 0.3% uptick and 0.2% rise respectively while the previous month’s figures were upgraded. Preliminary UoM consumer sentiment was also stronger than expected, as the index climbed from 82.5 to 84.6 and reflected increased optimism. Empire State manufacturing index and industrial production data are due today.

EUR

The euro struggled to hold steady around 1.2950 against the dollar last week, as the shared currency got a bit of support from stronger than expected industrial production and employment change figures. Industrial production marked a 1.0% gain versus the estimated 0.6% uptick while employment change showed a 0.2% increase for the previous quarter, higher than the projected 0.1% rise. Euro zone trade balance is due today and a higher trade surplus is eyed.

GBP

The pound continued to weaken against the dollar but managed to hold on to its current levels against the yen on Friday, as UK construction output stayed flat. Profit-taking may have played a huge role in price action, as traders closed positions ahead of this week’s top-tier UK events. There are no major ones lined up for today but tomorrow has the UK CPI while Wednesday has the BOE minutes and UK jobs figures on tap. Thursday will have the Scottish referendum and UK retail sales release. Earlier today, the Rightmove HPI marked a 0.9% rebound for September.

CHF

The franc had been moving uneasily as traders are anticipating intervention from the SNB this week. The currency lost further ground to the euro then recovered slightly to the dollar last week. Swiss PPI is due today and a 0.2% uptick is eyed to follow the previous flat reading, with a weaker than expected result likely to weigh on the franc.

JPY

The yen continued to weaken to the dollar and its major counterparts as the Japanese economy showed further signs of weakness. There are no reports lined up today as Japanese banks are on holiday, leaving yen pairs at the mercy of risk sentiment.

Commodity Currencies (AUD, NZD, CAD)

The comdolls were in a weak spot last Friday and most gapped down over the weekend, as Chinese data came in mostly weaker than expected over the weekend. Industrial production in China is up by 6.9% instead of the estimated 8.8% increase while fixed asset investment marked a mere 16.5% gain instead of the projected 16.9% increase. Retail sales was also slightly weaker than expected. Earlier today, Australia reported a 1.8% decline in new motor vehicle sales.

By Kate Curtis from Trader’s Way