Article Highlights

  • French Services PMI: 50.6 vs. 49.8 forecast/previous
  • German Services PMI: 52.1 vs. 51.4 forecast/previous
  • European Services PMI: 51.6 vs. 51.9 forecast/previous
  • European Composite PMI: 51.4 vs. 51.7 forecast/previous
  • U.K. CIPS/Markit Services PMI: 55.8 vs. 58.5 forecast, 58.6 previous
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The morning London session was once again not a good one for the euro and pound, both falling on fresh economic data and ongoing Greece fears.

Much like yesterday, euro selling kicked off right at the London open, most likely from ongoing pressure that the European Central Bank will initiate quantitative easing and fears that a potential Greek exit would create system banking risk in Europe. While we did see positive services PMI data today from France and Germany, the potential for another banking crisis is the focus of the day. The euro is down across the board (with exception against the pound), with momentum still strong going into U.S. trading:

EUR/USD is down 29 pips (-0.25%) to 1.1902, EUR/JPY is down 105 pips (-0.74%) to 141.68, and EUR/NZD is down 149 pips (-0.96%) to 1.5363

The British pound is also feeling a bit of pain on the session after a disappointing services PMI number, as well as general risk aversion sentiment sparked by Europe’s issues and falling oil.

GBP/USD is down 66 pips (-0.44%) to 1.5177, GBP/JPY is down 167 pips (-0.92%) to 180.68, and GBP/NZD is down a whopping 306 pips (-1.54%) to 1.9591

Finally, the Aussie and Kiwi are still in strong rally mode through European trade thanks to positive China (HSBC services PMI goes from 53.0 to 53.4) and Australian news (stronger than expected trade balance) during the Asia session.

AUD/USD is up 49 pips (+0.61%) to .8131, NZD/USD is up 60 pips (+0.79%) to .7741

The forex calendar for the Tuesday afternoon London/morning U.S. session has a few economic data points that could stir up the pot for currency traders.

At 1:30 pm GMT, we’ll get Canadian prices data in the form of the raw materials price index and industrial product price index.  Both are expected to dip lower from previous levels, indicating that downward inflation continues to be an issue.

And at 3:00 pm GMT, we’ll get U.S. factory orders (-0.5% forecast vs. -0.7% previous) and ISM non-manufacturing PMI data (58 forecast vs. 59.3 previous).  Both are important pieces of data but the potential market mover is the ISM number.  Look for volatility in the Greenback to pick up during this hour, especially if the ISM number breaks the trend of improving data through 2014.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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