European Session – Quiet session ahead of central bank meetings next week
August 30, 2013 12:01 pm
Currency markets were calm in the European session after a busy week and investors are digesting all the week’s events ahead of the weekend while they prepare for what is expected to be an even busier week ahead.
There will be a slew of very important economic data releases, which include the all-important nonfarm payrolls and PMI data, of which China’s PMI sill be closely watched. Additionally major central banks will be holding meetings next week, including the European Central Bank, Bank of England, Bank of Japan, Bank of Canada as well as Reserve Bank of Australia.
As a result of these upcoming key risk events, investors are being cautious today and adjusting positions. There was some data out of Europe today but markets showed little reaction to the news while month-end flows were also at a minimum.
The euro was unmoved by better-than-expected Euro zone economic sentiment data and unemployment numbers unchanged. EURUSD has been rangebound since the dip to $1.3218 in yesterday’s U.S. session, and capped below the key $1.3250 level.
Sterling dipped despite news that the British Chambers of Commerce raised its U.K. growth forecasts for this year and next to 1.3 percent and 2.2 percent. Month-end flows mainly drove the pound as opposed to any data.
GBPUSD remained supported around $1.5500 for a while but then slipped to $1.5475 exacerbated by month-end EURGBP buying which lifted the euro to 85.52 pence from 85.19 pence. Going into the U.S. session, the pairs steadied around $1.5500 and 85.40 respectively.
The yen held firm against the dollar and euro, slightly adding to gains during the European trade. Behind the moves are month-end positioning by Japanese exporters but yen was also given a lift after a string of Japanese data today, including data that showed an increase in consumer price inflation.
Any signs of a move away from deflation is positive for the yen and signals that Abenomics and bold monetary policy measures have been helping the Japanese economy.
USDJPY opened in Europe at 98.16 and dipped to 97.87 while EURJPY briefly dipped down to 129.59 before popping back up above the key 130.00 level. Dollar/yen will likely be quiet ahead of the long holiday weekend in the U.S. where markets will be closed on Monday for Labor Day.
Looking ahead to the U.S. session:
We have personal spending data and Chicago PMI as well as revised University of Michigan consumer sentiment data, though they are not considered to be tier one data.
Currency markets were calm in the European session after a busy week and investors are digesting all the week’s events ahead of the weekend while they prepare for what is expected to be an even busier week ahead.
There will be a slew of very important economic data releases, which include the all-important nonfarm payrolls and PMI data, of which China’s PMI sill be closely watched. Additionally major central banks will be holding meetings next week, including the European Central Bank, Bank of England, Bank of Japan, Bank of Canada as well as Reserve Bank of Australia.
As a result of these upcoming key risk events, investors are being cautious today and adjusting positions. There was some data out of Europe today but markets showed little reaction to the news while month-end flows were also at a minimum.
The euro was unmoved by better-than-expected Euro zone economic sentiment data and unemployment numbers unchanged. EURUSD has been rangebound since the dip to $1.3218 in yesterday’s U.S. session, and capped below the key $1.3250 level.
Sterling dipped despite news that the British Chambers of Commerce raised its U.K. growth forecasts for this year and next to 1.3 percent and 2.2 percent. Month-end flows mainly drove the pound as opposed to any data.
GBPUSD remained supported around $1.5500 for a while but then slipped to $1.5475 exacerbated by month-end EURGBP buying which lifted the euro to 85.52 pence from 85.19 pence. Going into the U.S. session, the pairs steadied around $1.5500 and 85.40 respectively.
The yen held firm against the dollar and euro, slightly adding to gains during the European trade. Behind the moves are month-end positioning by Japanese exporters but yen was also given a lift after a string of Japanese data today, including data that showed an increase in consumer price inflation.
Any signs of a move away from deflation is positive for the yen and signals that Abenomics and bold monetary policy measures have been helping the Japanese economy.
USDJPY opened in Europe at 98.16 and dipped to 97.87 while EURJPY briefly dipped down to 129.59 before popping back up above the key 130.00 level. Dollar/yen will likely be quiet ahead of the long holiday weekend in the U.S. where markets will be closed on Monday for Labor Day.
Looking ahead to the U.S. session:
We have personal spending data and Chicago PMI as well as revised University of Michigan consumer sentiment data, though they are not considered to be tier one data.
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