London Session Forex Recap – Feb. 4, 2015

  • French Services PMI: 49.3 vs. 49.5 forecast/previous
  • German Services PMI: 54 vs. 52.7 forecast/previous
  • European Services PMI: 52.7 vs. 52.3 forecast/previous; Composite PMI at 52.6 vs. 52.2 forecast/previous
  • U.K. Services PMI: 57.2 vs. 56.3 forecast, 55.8 previous
  • European Retail Trade y/y: 2.8% vs. 1.6% previous

It was mostly about service PMI data today in the London forex session, with both the euro zone and the U.K. posting mostly positive numbers.  The one downer among the group is France, once again posting contractionary numbers, but overall it was a good day for Europe as we also saw a rise in the annual retail trade numbers. Overall, euro price has been choppy all session and influenced more by what’s going on in other currencies.

On the other hand, the opposite goes for the British pound as the U.K.’s positive numbers boosted Sterling on the session. It was an unexpectedly strong start to 2015 thanks to a rise in hiring and new orders that had forex traders buying up the pound on the session on the hopes this may spark a less dovish statement from the Bank of England this week:

GBP/USD is up 73 pips (+0.48%) to 1.5237, GBP/JPY is up 64 pips (+0.37%) to 178.92, and EUR/GBP is down 49 pips (-0.66%) to .7518

The other price behavior of note is with the New Zealand dollar, giving a little back on it’s strong rally ignited during the Asia session on strong jobs numbers (Employment Change +1.2% vs. 0.8% forecast, 0.9% previous).   It’s bucking the trend of recent comdoll weakness, so this may be a story to watch as one of the few major economies to possibly not need to ease monetary policy.  Overall, the Kiwi remains strong on the session going into U.S. trade:

NZD/USD is up 39 pips (+0.57%) to .7393, NZD/JPY is up 37 pips (+0.43%) to 86.84, and AUD/NZD is down 48 pips (-0.45%) to 1.0535

The forex calendar for the Wednesday afternoon London/morning U.S. session is pretty light, but each are potential market movers that should be taken into consideration for today’s currency trades.

At 1:30 pm GMT, we just got the ADP Employment Survey number for a read on the private employment sector, coming in a 213K (223K forecast, 253K previous).  Traders and economists tend to see this as a leading indicator for the month monster U.S. jobs number issued by the Bureau of Labor Statistics on Friday. So far, the reaction to the number has been pretty mute and a little downward biased on the Greenback, but it’s still a pretty fresh release so we’ll have to give it some time to play out.

At 3:00 pm GMT, we’ll see the ISM non-manufacturing survey data (56.4 forecast vs. 56.5 previous) and Canadian Ivey PMI data (53.4 forecast vs. 55.4 previous); both are also service PMI reads that look to tick slightly lower from previous reads. If so, look for the strong currencies of the day to continue to possibly rally against the Greenback and Loonie, and the possibility of risk sentiment shifting a bit to the downside.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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