Forex Trading Library

Forex Afternoon Wrap – 23/04

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Key Notes:

  • Japan manufacturing PMI 49.7 vs. 50.7
  • China HSBC manufacturing PMI 49.2 vs. 49.4
  • Switzerland trade balance 2.52bn vs. 2.12bn
  • French flash manufacturing PMI 48.4 vs. 49.2; flash services PMI 50.8 vs. 52.4
  • German flash manufacturing PMI 51.9 vs. 52; flash services PMI 54.4 vs. 55.5
  • Eurozone flash manufacturing PMI 51.9 vs. 53; flash services PMI 54.4
  • UK core retail sales m/m 0.2% vs. 0.5%; retail sales m/m -0.5% vs. 0.4%
  • UK core retail sales y/y 5% vs. 5.5%; retail sales y/y 4.2% vs. 5.4%
  • US weekly jobless claims 295k vs. 289k

Later:

  • US manufacturing PMI
  • New home sales

NZD drops as RBNZ Asst. Governor warns of rate cuts

The currency markets caught up on volatility early into the Asian trading session, starting with the RBNZ’s Assistant Governor’s dovish comments about lowering interest rates should demand fail to pick up. The comments come at a time when the Kiwi dollar was seen enjoying a strong rally against the Greenback. The Kiwi dropped close to 1.3% for the day into the US trading session.

The Aussie dollar was also relatively weaker after enjoying strong gains the day before on a modest CPI print. China’s manufacturing PMI data was soft and the Aussie was also pulled down as the currency could not hold on to its gains from earlier. Nonetheless, the short term outlook for the Aussie looks positive given that the CPI data has now eased back speculation of an RBA rate cut in May.

The Japanese Yen saw the manufacturing data disappoint and the Yen was trading mixed albeit strong across the board. USDJPY was seen struggling near the 120 mark but looks poised for upside gains into the US trading session.

The European trading session saw a lot of flash manufacturing and services PMI data being released from Germany and France, all of which fell below estimates. The Euro was trading mixed, weaker against the Greenback but stronger against the British Pound.

UK retail sales disappointed, falling below estimates on both the core and headline sales numbers as well as on both the monthly and annualized prints as well. The British Sterling initially weakened on the news, but managed to hold its ground. Ahead of the US trading session, the GBPUSD was trading within the bear flag pattern noted in or daily technical analysis. A break above the previous highs at 1.505 is essential to pave way for more gains to the upside, while support comes in at 1.495 through 1.5 levels. EURGBP was seen stronger as the Euro managed to reverse its losses near lows of 0.712.

The US trading session saw the release of the weekly jobless claims rose 295k, above expectations of 289k. The Greenback did not react much to the news ahead of other important data including the manufacturing PMI and new home sales data which is expected to be bullish based on yesterday’s existing home sales data, and one which underlines the overall growth in the US labor markets.

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