Simon Smith

UK GDP in line

UK GDP rose 0.7% QoQ in Q3, in line with expectation. Cable has popped higher by around 20 pips to 1.6050, just on short-covering and the fact that support at 1.60 now looks a little safer now near-term risk has been removed.

Simon Smith

GBO softer after sales data

GBP sitting above 1.6000 after softer than expected retail sales data for September. Both headline and underlying measures fell 0.3%, coming on the back of MPC minutes yesterday which were more cautious on the global economy overall. We've also seen a mixed picture in terms of eurozone data, with better German PMI data contrasting with weaker numbers from France. EURUSD remains in trapped in a tight range for now though.

Simon Smith

Dollar in retreat again

The US retail sales data has seen the dollar weaken, with EURUSD back above 1.27 and USDJPY at the week's lows of 106.57. Headlines sales fell 0.3%, with PPI data also slightly softer than expected. We've seen a big shift in the past two weeks as markets become more concerned regarding the global growth outlook, as seen in both the US 2Y yield and also oil prices.

Angus Campbell

GBPUSD gets dumped after lower than expected inflation

GBPUSD has crashed back below the 1.6000 level now trading at 1.5975 following much lower than expected CPI data. This shows the impact that lower oil prices is having on inflation and has even caught the most bearish of estimates off guard. This will only serve to push Bank of England rate hikes expectations even further out into 2015 and it likely to keep sterling under pressure going for the remainder of 2014. The only good thing to come from this is that tomorrow's earnings data, which is ...

Simon Smith

EUR and GBP weaker on activity surveys

The latest PMI data has shown a slowing picture of activity. Most notably for Germany, the manufacturing series was revised lower to 49.9 (from 50.3), this coming ahead of the ECB tomorrow and has aided a push below the 1.26 level on EURUSD. Cable is down to 1.6170 after UK numbers were weaker than expected. But the dollar weakness is becoming a well worn story and there is still an underlying current towards corrective activity on some of the majors because of this.

Angus Campbell

US GDP revised higher, in line with expectations

So annualised US GDP has been revised higher to 4.6% for Q2. This was bang on market expectations and the reaction from the dollar has been muted. There is however a tinge of dollar strength following the release as looking deeper into the numbers you can see that there are elements that show the US economy continues to gather pace. Corporate profits for example are the highest they've been since the third quarter of 2010, so we're just seeing EURUSD drift down to 1.2720, GBPUSD to 1.6295 and ...

Simon Smith

Weaker German IFO adds to core slowdown story

The headline Ifo index was weaker than expected at 104.7 (from 106.3), with the underlying expectations balance leading the way lower. EURUSD reaction was limited to within 10 pips on EURUSD, but in the bigger picture the slowdown story in the core countries is becoming stronger and more sustained.

Simon Smith

EUR nudging higher for now

The single currency is continuing the recovery seen just above the 1.28 level, with the better than expected PMI data from earlier today supporting the move. It's also clear that the ECB is going to struggle to expand its balance sheet to the degree that they want in the wake of the first round of bids for the TLTRO. This makes the prospect of QE more likely, but at the same time the impression given by the ECB head in recent comments is that that Governing Council are not there yet in securing ...

Angus Campbell

Sterling fails to gain traction after good employment data

Tomorrow's Scottish referendum is dominating trade in sterling today as normally you would expect a bounce in GBPUSD following such a strong employment reading for the UK . Before the release of the data which showed unemployment falling from 6.4% to 6.2%, better than the expected fall to 6.3%, GBPUSD was trading some 35 pips above the 1.6300 level but we've retreated back from there since the release of the data. Investors and traders are still nervous about tomorrow's vote which hangs in the ...

Simon Smith

UK CPI in line but sterling remaining weak

Sterling feeling heavy during the early European session, but weaker tone holding in place after the latest CPI data shows headline rate remaining weaker at 1.5%. Cable at 1.6175, with EURGBP at 0.8000. Scotland referendum on Thursday clearly the main risk event of the week, with sterling volatility guaranteed early Friday when the results are expected to start filtering through.

Simon Smith

More Aussie weakness

We talked about the weakness in the Aussie overnight in the wake of the latest labour market numbers. This has continued during the European session, even though other currencies have managed to gain some ground vs. the dollar. The Aussie is now at levels last seen late March, with a brief push below the 0.91 level into the European session.

Simon Smith

Payrolls weaker

The dollar weaker after US payrolls report was weaker than expected on the headline measure. The 142k headline gain was below the 230k anticipated increase. The rate declined to 6.1%. As always, there are different ways to cut the report. Hourly earnings growth remains weak at 2.1%, whilst the participation rate fell once again to 62.8%. The initial gains on EURUSD are now running out of steam, with USDJPY just holding below the 105.00 level.

Simon Smith

ECB reaction and press conference

The reaction in the FX markets to a mere 10bp cut in interest rates reflects 2 things. Firstly, that this was generally unexpected by the markets. Secondly, a perception that the ECB is more aware of the deflationary risks facing the eurozone economy and prepared to do whatever it takes to ensure that they do not come to fruition. Further losses on EURUSD possible if we see fresh indications that the ECB is preparing to push ahead with asses purchases of some sort or another.

Simon Smith

GBP erasing early gains

Sterling started the new month on decent form, but has since seen some of the early gains erased after weaker than expected PMI data pushed cable away from the day's highs. Cable down from intra-day high of 1.6644, having moved above 1.6600 at the start of the European session.

Simon Smith

Euro weakening on data

EURUSD weakening into midday as data falls to the weaker side and the softer tone to the dollar seen earlier on in the session proves transitory (most against the Aussie and sterling). German labour market data was weaker, with (more significantly) revisions also showing higher unemployment than before. Italian business confidence fell to 95.7, with Eurozone confidence data also softer vs. expectations. EURUSD now back below the 1.32 level with cable at 1.6580. FX likely to remain slightly more ...

Simon Smith

Dollar steady after consumer confidence data

The US dollar holding steady after stronger than expected consumer confidence data in the US. We've seen the headline rate move up to 92.4 (from 90.3), with this representing a near seven year high on the headline index. EURUSD has been choppy within a relatively tight range, with the Aussie pushing higher and sterling unsuccessfully trying to do the same.