Daily FX Trading Update: Chinese PMIs Show Weakness – Feb 2, 2015

The US dollar returned some of its recent FX trading gains last Friday when the US advanced GDP reading came in below expectations. The economy showed a 2.6% growth figure for Q4 2014, lower than the projected 3.0% expansion and the previous 5.0% GDP. Chicago PMI, however, surprised to the upside with a gain to 59.4 and allowed the dollar to regain ground. For today, the Fed’s preferred measure of inflation or the core PCE price index is up for release, along with the ISM manufacturing PMI. Personal spending and income reports are also due, with strong figures likely to renew support for the Greenback.
The euro managed a quick FX trading recovery on Friday, as data from the euro zone came in mixed. The headline CPI flash estimate came in at -0.6%, lower than the projected -0.5% figure and the previous -0.2% reading, while the unemployment rate improved from 11.5% to 11.4%. Spanish flash CPI and GDP also came in stronger than expected yet German retail sales fell short with a bleak 0.2% gain. Spanish unemployment change and manufacturing PMI could move euro pairs around today, along with the region’s final PMI reading.

FX Trading Reports

The pound moved sideways on Friday, as the lack of top-tier data from the UK kept the currency’s gains in check. Net lending to individuals was weaker than expected at 2.2 billion GBP versus the projected 3.1 billion GBP figure. UK manufacturing PMI is up for release today and an improvement from 52.5 to 52.9 is eyed. Strong data could allow the pound to extend its gains while weak figures could lead to more FX trading losses.
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