Forex Trading Library

Forex Afternoon Wrap – 05/10

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UK services PMI disappoints. Quarterly GDP tracks lower at 0.5%

Today’s Economic Data:

  • Australia AIG services index 52.3 vs. 55.6 previously
  • Australia MI Inflation gauge m/m 0.3% vs. 0.1% previously
  • Australia ANZ Job advertisements m/m 3.9% vs. 1.3% previously
  • Japan average cash earnings y/y 0.5% vs. 0.7%
  • Spain services PMI 55.1 vs. 59.7
  • Italy services PMI 53.3 vs. 54.8
  • France services PMI 51.9
  • Germany services PMI 54.1 vs. 54.4
  • Eurozone services PMI 53.7 vs. 54
  • Eurozone sentix investor confidence 11.7 vs. 12.2
  • UK services PMI 53.3 vs. 56.4
  • Eurozone retail sales m/m 0.0% vs. -0.1%

Later:

  • US Final services PMI
  • US ISM non-manufacturing PMI

The Kiwi surged across the board this morning since the start of the Asian trading session, gaining as much as 1.12% at the time of writing against the Greenback. The rally in the Kiwi comes amidst a mix of weaker US Dollar and short covering in the NZDUSD which has posted strong gains since early last week after the currency touched the lows below 0.63. NZDUSD briefly touched the intraday highs above 0.652 before easing back lower.

Data from the Asian trading session saw the Australian services index posting a soft print of 52.3, down from 55.6 last month. The inflation gauge saw a modest pickup of 0.3% from 0.1% previously. The Aussie was also stronger today gaining nearly 0.44% at the time of writing with the currency struggling near 0.708 level of resistance.

The equity markets in Asia closed broadly higher with the Nikkei 225 up 1.58%. Data from Japan saw the average cash earnings growing at a slower pace of 0.5% missing estimates of 0.7%. The Yen was one of the weakest currencies today with most of its peers making strong gains. However, USDJPY looks to have stalled in its rally after recovering off Friday’s lows below 118.74. The Greenback posted a high of 120.24 ahead of the US market open.

The European session saw the release of the services PMI with the final Eurozone services PMI coming in at 53.7 below estimates of 54. The Sentix investor confidence was weak, rising 11.7 below estimates of 12.2. The Euro was trading mixed but broadly stronger than the Greenback rising 0.15% after the currency failed to hold above daily highs of 1.12815. EURUSD was trading at 1.121 at the time of writing.

From the UK, there was disappointing news as the services PMI fell to 53.3 below estimates 56.4 prompting the quarterly GDP tracking to be at 0.5%. The British Pound initially rallied to 1.523 before giving back its gains to trade near 1.517 at the time of writing. European equities were also stronger today at the German DAX was up 2.48% while the FTSE100 was up 2.13%.

The US trading session will see the release of the final services PMI and the ISM non-manufacturing data later in the evening. The US equity markets were also pointing to a higher open ahead of the data.

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