- German Import Price Index m/m: -0.8% vs. -1.1% forecast, -1.7% previous
- French Consumer Spending m/m: 0.6% vs. -0.3% forecast, 1.8% previous
- French Producer Price Index m/m inline with -0.9% previous
- Swiss KOF Leading Indicator: 90.1 vs. 89 forecast, 96.1 previous
Mixed priced action throughout the forex markets with a steady stream of euro data and Asia session data sentiment flowing into the London session.
First, we’re seeing broad risk-on behavior through a broadly weak Japanese yen and strength in the higher-yielding currencies like the comdolls and British pound. Without major headline news, it’s likely the weak Japanese data and positive New Zealand/Australia data is playing a role in forex traders looking to get into comdoll/yen pairs long.
These pairs were actually in bear mode throughout Asia trade, but once London opened up, they kicked into rally mode, likely on positive risk sentiment based on the positive European data, and maybe even the idea we’re about to see quantitative easing from the ECB very soon. It looks like the moves have slowed down, but yen pairs are still up on the session:
AUD/JPY is up 28 pips (+0.31%) to 93.41, GBP/JPY is up 33 pips (+0.18%) to 184.28 after falling to a session low of 183.55, and NZD/JPY is up 36 pips (+0.40%) to 90.27
The other currency moves of note is in the U.S. dollar. The Greenback is lower across the board and without a direct catalyst, it’s likely the weakness is on profit taking ahead of U.S. data filled calendar most notably, the U.S. quarterly GDP number, forecasted to tick lower than the previous read. Whatever the case may be, dollar bulls aren’t having a good day, especially against the bulls in comdolls:
AUD/USD is up 29 pips (+0.37%) to .7827, NZD/USD is up 35 pips (+0.52%) to .7567, and USD/CAD is down 50 pips (-0.40%) to 1.2461
And with influences elsewhere, euro and British pound pairs are mixed on the session, with the taking a slight edge over Sterling, possibly with the help of the broad positive European data released earlier in the session. EUR/GBP is up slightly by 9 pips (+0.13%) to .7275
The forex calendar for the Friday afternoon London/morning U.S. session has a few potential market movers from the U.S. to light up volatility.
At 1:30 pm GMT, we’ll get the second estimate read on quarterly U.S. GDP, with the annualized quarterly number forecasted at 2.0% vs. 2.6% previous. With forex traders being bullish on the Greenback over the past couple of months, if the latest GDP read does come in lower, we could see a continued move to the downside across the board in the Greenback on more long-term profit taking.
We’ll close out Friday’s’s calendar with U.S. Chicago PMI (58 forecast vs. 59.4 previous) at 2:45 pm GMT and then U.S. pending home sales (2% forecast vs. -3.7% previous) and the University of Michigan consumer survey data (94 forecast vs. 93.6 previous) at 3:00 pm GMT. This hour will give us another broad update of U.S. economic health, but since they are mid-tier events, we’re not likely to see a significant market reaction without a big deviation from the expected/previous numbers. But as always, be aware and stay frosty!
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