- German PPI m/m: 0.1% vs. 0.2% forecast, -0.8% previous; y/y at -2.1% vs. -2.0% forecast, -2.2% previous
- European Current Account (sa): €29.4B vs. €22.5B previous
- U.K. Public Borrowing: £6.9B vs. £8.4B forecast, -£8.3B previous
The Japanese yen took a hit against the majors in the morning London forex session, likely on hints from the BOJ meeting minutes suggesting easy money policy could grow if need be to reach their two percent inflation target. With the possibility of monetary stimulus at least hanging around for a while, this not only put pressure on the Japanese yen, but lifted risk currencies like the Kiwi and Aussie, who both have relatively higher interest rates.
AUD/JPY is up 70 pips (+0.76%) to 93.05, NZD/JPY is up 81 pips (+0.91%) to 90.28, and USD/JPY is up 30 pips (+0.25%) to 121.05
The British pound is another clear directional mover on the session, also taking a hit against the majors despite an improvement in the Public Borrowing data showing the smallest February budget deficit since 2008. The broad hit to Sterling could be more of influences from the counter currencies, but whatever the case may be, it’s down broadly on the session with exception against the weak Japanese yen and only slightly up against the Greenback:
GBP/USD is up 13 pips (+0.08%) to 1.4760, GBP/AUD is down 88 pips (-0.46%) to 1.9786, GBP/NZD is down 113 pips (-0.57%) to 1.9771
And finally, volatility in the Greenback continues to remain elevated but choppy, now lower on the session after Thursday’s and Friday morning’s strength. Without a direct catalyst, this could be profit taking ahead of the weekend:
EUR/USD is up 55 pips (+0.53%) to 1.0717, AUD/USD is up 45 pips (+0.60%) to .7692, and NZD/USD is up 54 pips (+0.74%) to .7462
The forex calendar for the Friday afternoon London/morning U.S. session is lined up with potential market movers from Canada to hopefully help us all close out the week on a positive note.
At 12:30 pm GMT, we’ll get a couple of top tier economic metrics of health for Canada in the form of consumer price inflation data (headline m/m at 0.8% forecast vs. -0.2% previous) and retail sales (headline m/m at -0.8% forecast vs. -2.0% previous). Both are must watch indicators for consumer health, and it looks like we may get a boost in support for the Loonie with both data points looking to improve over last month’s numbers.
Whatever the numbers may be, be prepared for a final positioning push and potentially more profit taking across the entire forex landscape before the weekend. Stay frosty!
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