- Australian economy grew 0.5% in Q4 2014, lower than 0.7% estimate
- China’s HSBC services PMI improved from 51.8 to 52.0 in Feb
- Reserve Bank of India cut interest rates
- U.K. services PMI and euro zone retail sales data due
The Aussie enjoyed a bit of volatility in today’s Asian trading session, as forex traders viewed Australia’s latest GDP report. The economy grew 0.5% during Q4 2014, weaker compared to the estimated 0.7% expansion, although the previous quarter’s reading was upgraded from 0.3% to 0.4%.
AUD/USD dipped briefly below the .7800 major psychological level after the release then recovered back to .7815 (0.01%) while AUD/JPY fell to a low of 93.28 before scrambling back above the 93.50 level (-0.05%). China reported that its HSBC services PMI improved from 51.8 to 52.0 in February, reflecting a stronger expansion in the industry and a potential pickup in demand.
The Reserve Bank of India (RBI) stole the show later on, as policymakers made a surprise interest rate cut announcement, following another unscheduled rate cut back in January. It looks like the RBI is taking a page out of the PBOC’s book in providing much needed economic stimulus!
With that, forex market watchers could start buzzing about a potential downturn in emerging economies now that central banks are scrambling to ease monetary policy. But before a potential risk-off environment takes hold, traders might turn their attention to the upcoming services PMI releases in today’s London trading session.
Among these, the U.K. services PMI due 10:30 am GMT might spark the largest price reaction, as the reading is slated to climb from 57.2 to 57.6 and reflect a stronger expansion in the industry. This is a pretty huge deal for the pound since the services sector contributes a huge chunk to overall U.K. economic growth.
Also lined up are services PMI readings from a couple of top euro zone economies, namely Spain and Italy, with both countries likely to show a pickup in their respective indices. Later on, the euro zone will print its retail sales report at 11:00 am GMT and probably show a 0.2% uptick in spending.
Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.
In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis. Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!