- French GDP (Prelim.) q/q: 0.1% vs. 0.1% forecast, 0.3% previous
- German GDP (Prelim.) q/q: 0.7% vs. 0.3% forecast, 0.3% previous
- German Wholesale Price Index m/m: -0.4% vs. -1.0% previous
- U.K. Construction Output m/m: 0.4% vs. 2.7% forecast, -1.8% previous
- European GDP (1st. Est.) q/q: 0.3% vs. 0.2% forecast/previous
Preliminary European GDP data was the story of the morning London session, but the forex traders have seen mostly choppy price action as we close out the week. German GDP highlighted the broad read on European growth, with its strength lifting the European region’s growth to tick higher to 0.3% from 0.2% q/q. Initially, we saw the euro rally on the news but the market has quickly turned in the last hour for reasons unclear at the moment, with EUR/USD breaking below the 1.1400 handle. Overall, the euro is down on the session but volatility seems to be limited at the moment:
EUR/USD is down 13 pips (-0.12%) to 1.1386, EUR/JPY is down 34 pips (-0.26%) to 135.44, and EUR/GBP is down 8 pips (-0.12%) to .7400
After hitting highs around 1.5415 in Asia, GBP/USD has fallen since the London open, with more selling after the weaker-than-expected U.K. construction output data and currently trading around 1.5385 handle. Overall, Sterling is also down on the session against the majors with exception to being barely up against the euro and the Greenback:
GBP/USD is up 2 pips (+0.01%) to 1.5385, GBP/JPY is down 17 pips (-0.10%) to 183.06, and GBP/AUD is down 49 pips (-0.25%) to 1.9838
And the U.S. dollar seems to be giving back its Friday strength going into the U.S. trading session, possibly on a bounce from oil–which is hitting $60/barrel for the first time in 2015–and the positive GDP data from Europe also bringing support to the euro.
USD/JPY is down 11 pips (-0.09%) to 118.99, USD/CHF is down 22 pips (-0.24%) to 1.9283, USD/CAD is down 9 pips (-0.07%) to 1.2497
The forex calendar for the Friday afternoon London/morning U.S. session is pretty light going into the weekend with both U.S. and Canadian events in the lineup.
At 1:30 GMT, we’ll get the monthly U.S. import price index (-3.2% forecast vs. -2.5% previous) and the Canadian manufacturing sales (0.9% forecast vs. -1.4% previous). Both are mid-tier events with the ability to shake things up a bit if we see big surprises from the expected/previous number, but the Canadian manufacturing sales number does tend to spark the bigger reaction between the two and has been disappointing in the past couple of releases.
At 3:00 pm GMT, we’ll get the preliminary University of Michigan sentiment data, forecasted to come inline with the previous read of 98.1. This is also a mid-tier event that doesn’t garner much attention without a big deviation from the expected and previous reads, and even then, a currency reaction may be short lived.
The remainder of the trading week will continue to focus on developments in the Greece bailout story, the action in Ukraine, and potential sanctions on Russia if the Ukraine ceasefire doesn’t work out. Stay frosty!
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