USD

Dollar pairs tossed and turned in the charts yesterday when FOMC head Yellen gave hawkish remarks but economic data failed to support her upbeat bias. 

According to Yellen, a rate hike is possible this year as long as the headwinds to the domestic economy don’t lead to any negative surprises. However, headline durable goods orders marked a 2.0% decline while the core version of the report printed a flat reading instead of the estimated 0.2% uptick. New home sales surprised to the upside at 552K versus the projected 516K figure. For today, the US final GDP reading for Q2 and revised UoM consumer sentiment index are due.

EUR

The euro gave back some of its recent gains after seeing mixed figures from Germany. The IFO business climate index came in better than expected at 108.5, up from the previous 108.4 figure and higher than the estimated 107.8 reading. However, the GfK consumer climate index marked a drop from 9.9 to 9.6, lower than the estimated 9.8 figure. A speech by ECB member Weidmann is lined up today, along with euro zone data on private loans and M3 money supply.

GBP

The pound got heavier in recent trading since there were no reports out of the UK to give it any support. There are still no major reports lined up from the UK economy today, although the FPC statement could provide additional volatility for pound pairs.

CHF

The franc erased some of its recent wins to its forex rivals even though there were no major catalysts lined up from Switzerland. There are still no reports due from the Swiss economy today, which suggests that the franc could move to the tune of risk sentiment.

JPY

The yen was off to a strong start during the return of Japanese traders after the long holiday but soon gave up its gains when the US dollar advanced. Earlier today, Japan reported a 0.2% decline in its Tokyo core CPI and a 0.1% drop in its national core CPI as expected. No other reports are due from Japan which means that risk sentiment might take control of yen price action.

Commodity Currencies (AUD, NZD, CAD)

The comdolls fell to fresh lows against the dollar and the yen but managed to bounce off near-term inflection points. There have been no major reports out of the comdoll economies yesterday, although the Kiwi was able to get a small boost from Fonterra’s upgraded milk payout forecasts. There are no reports due from these economies today.

By Kate Curtis from Trader’s Way