Weekly Forex Review for March 23-27 2015 features the following
Yen attracts safe haven seekers
There were not much of market moving events from Japan this week, but the Yen gained mid week as Saudi Arabia announced that it was launching air strikes against Yemen. The Yen rallied as a safe haven across the board, with the USDJPY briefly trading near 118 levels. Economic data from Japan released earlier on Friday was broadly mixed. There were comments from some BoJ members, but the markets were muted.
- Flash manufacturing PMI 50.4 vs. 52.1
- Household spending -2.9% vs. -3.1%
- Tokyo Core CPI y/y 2.2% vs. 2.2%; National Core CPI y/y 2% vs. 2.1%
- Unemployment rate 3.5% vs. 3.5%
- Retail sales y/y -1.8% vs. -1.4%
Economic data upbeat in Eurozone
Call it overly pessimistic consensus or indeed a rebound in the Eurozone, economic data from the region continues to beat estimates, albeit mixed. Nonetheless, the Euro single currency remains at risk with the Greece debt negotiations still heading nowhere. The Euro briefly rallied to 1.10 against the Greenback but failed to hold on to the gains at this level. Business climate and economic confidence seems to have improved ever since the ECB embarked on its QE program.
- Eurozone consumer confidence -4 vs. -6
- French flash manufacturing PMI 48.2 vs. 48.9; flash services PMI 52.8 vs. 53.1
- German flash manufacturing PMI 52.4 vs. 51.5; flash services PMI 55.3 vs. 55
- Eurozone flash manufacturing PMI 51.9 vs. 51.6; flash services PMI 54.3 vs. 53.9
- German Ifo business climate 107.9 vs. 107.4
- Gfk German consumer climate 10 vs. 9.8
British Pound remains subdued
The uncertainty in the upcoming elections in the UK seems to have started to weigh in on the currency as the GBPUSD was stuck in a tight range for the most part. Retail sales data managed to beat expectations, but the CPI data dipped near zero, leaving the British Pound either weak or trading in a range across the board.
- CPI y/y 0% vs. 0.1%; Core CPI y/y 1.2% vs. 1.3%
- RPI y/y 1% vs. 0.9%; HPI y/y 8.4% vs. 10.2%
- Retail sales m/m 0.7% vs. 0.4%
- CBI realized sales 18 vs. 16
US Dollar undecided after FOMC
The US Dollar was choppy to put it mildly as the Greenback failed to find direction after last week’s FOMC meeting. The Greenback was however a bit weaker but trading within the range set during last week’s Fed’s meeting. Economic data from the US for the most part was mostly mixed, with core durable goods orders declining while jobless claims continued to fall, putting the consensus for the labor markets poised for more gains. Inflation data was also released this week which managed to meet estimates giving another boost to the Fed’s ‘reasonably confident’ rhetoric.
- Existing home sales 4.88mn vs. 4.91mn
- CPI m/m 0.2% vs. 0.2%; Core CPI m/m 0.2% vs. 0.1%
- Flash manufacturing PMI 55.3 vs. 54.9
- Richmond manufacturing index -8 vs. 2
- New home sales 539k vs. 466k
- Core durable goods orders m/m -0.4% vs. 0.3%; durable goods orders m/m -1.4% vs. 0.3%
- Weekly unemployment claims 282k vs. 291k
- Flash services PMI 58.6 vs. 57.2
- Final GDP q/q 2.2% vs. 2.4%
- Final GDP price index q/q 0.1% vs. 0.1%