London Session Recap – February 3, 2014

  • Broad European Manufacturing PMI positive: 54.0 vs. 53.9 forecast
  • U.K. CIPS/Markit Manufacturing PMI weaker-than-expected: 56.7 vs. 57.1 forecast
  • Canadian price index number mixed; Industrial product price 0.7% vs. 0.3%, Raw Materials price index 1.9% vs. 2.0% forecast

It looks like another risk-off session for the forex market as the usual high fliers during positive times are taking a hit against their weaker counter parts, partly due to another down data point from China manufacturing PMI.

The British pound is probably one of the hardest hit currencies after their manufacturing PMI data came in weaker-than-expected, another signal that the good times may be over for sterling at the moment.  To start the week, GBP/USD is down 95 pips (-0.57%), GBP/JPY is down 108 pips (-0.64%), and EUR/GBP is up 57 pips (+0.70%).

On the other side of the channel, the euro is barely hanging onto gains despite posting mostly manufacturing PMI numbers.  Italy’s number was down but both Germany and France had positive surprises (56.5 and 49.3 respectively)–although France is still below 50.0, which is in contraction territory. EUR/USD is reversing early gains after nearly hitting 1.3520 early in the London session, now trading around 1.3490; EUR/JPY is trading just under the session open at 137.50.

Canada just released price index numbers from the business sector which seems to be having a positive affect for the Loonie.  USD/CAD is down 62 pips (0.56%) on the session, but this may be from a broad commodity dollar bounce back as the Aussie is also up against most of the majors; AUD/USD is up 48 pips (+0.55%) since the start of the week.

For the rest of the session, we’ve got US manufacturing PMI data, with the ISM manufacturing PMI being the one to watch at 10:00am ET.  It’s forecasted to come in weaker than its previous number at 56.0.  If it does come in weaker, the risk-off sentiment could be further support and more risk-off moves may be the play of the day, most likely benefitting the Japanese yen.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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