European Session – Sterling rebounds after UK construction PMI hits 6-1/2 year high
February 4, 2014 2:46 pm
Most major currency pairs moved off lows reached after the dismal US ISM manufacturing data on Monday and became steadier going into Tuesday’s US session.
There were moves higher by the euro and the pound during the European session based on some data releases, although the market focus will primarily be on the European Central Bank and Bank of England meetings on Thursday as well as on the US nonfarm payrolls report on Friday.
The Eurozone Producer Price Index (PPI) numbers were released today, showing prices at the factory gates rose 0.2% in December on a monthly basis and on an annual basis they were 0.8% lower than in December 2012. The numbers were not sufficiently strong to suggest there are growing inflationary pressures building up in the region.
Thursday’s ECB policy announcement will hopefully reveal more on what the central bank’s view on the inflation situation is. There is growing speculation that the ECB is under pressure to ease, especially if inflation does not build up in the Eurozone.
The euro rose to a European session high of 1.3530 but was capped below this level and ended the session at 1.3515 versus the session open of 1.3528.
Sterling edged upward following a better-than-expected UK construction PMI. The index hit a 6-1/2 year high in January. Cable rose 100 pips after the data to hit a high of 1.6343 before easing back to 1.6302 by the end of the session.
Thursday’s Bank of England policy meeting will be a key risk for the pound. Although the Bank is expected to keep policy unchanged, there are expectations of revisions to its guidance framework.
The dollar gained some 40 pips against the yen to a high of 101.48, moving off a 2-month low of 100.74 reached in today’s Asian session. The pair is currently testing its 100-day moving average. General risk aversion is helping lift the yen, which is keeping the dollar under pressure. Friday’s US jobs data will be a key driver of this pair.
Meanwhile, in the upcoming US session, factory orders for the United States will be released, which economists expect to have dropped to negative 2% in December. Also, Chicago Federal Reserve Charles Evans is scheduled to speak later.
Most major currency pairs moved off lows reached after the dismal US ISM manufacturing data on Monday and became steadier going into Tuesday’s US session.
There were moves higher by the euro and the pound during the European session based on some data releases, although the market focus will primarily be on the European Central Bank and Bank of England meetings on Thursday as well as on the US nonfarm payrolls report on Friday.
The Eurozone Producer Price Index (PPI) numbers were released today, showing prices at the factory gates rose 0.2% in December on a monthly basis and on an annual basis they were 0.8% lower than in December 2012. The numbers were not sufficiently strong to suggest there are growing inflationary pressures building up in the region.
Thursday’s ECB policy announcement will hopefully reveal more on what the central bank’s view on the inflation situation is. There is growing speculation that the ECB is under pressure to ease, especially if inflation does not build up in the Eurozone.
The euro rose to a European session high of 1.3530 but was capped below this level and ended the session at 1.3515 versus the session open of 1.3528.
Sterling edged upward following a better-than-expected UK construction PMI. The index hit a 6-1/2 year high in January. Cable rose 100 pips after the data to hit a high of 1.6343 before easing back to 1.6302 by the end of the session.
Thursday’s Bank of England policy meeting will be a key risk for the pound. Although the Bank is expected to keep policy unchanged, there are expectations of revisions to its guidance framework.
The dollar gained some 40 pips against the yen to a high of 101.48, moving off a 2-month low of 100.74 reached in today’s Asian session. The pair is currently testing its 100-day moving average. General risk aversion is helping lift the yen, which is keeping the dollar under pressure. Friday’s US jobs data will be a key driver of this pair.
Meanwhile, in the upcoming US session, factory orders for the United States will be released, which economists expect to have dropped to negative 2% in December. Also, Chicago Federal Reserve Charles Evans is scheduled to speak later.
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