EURUSD: Constancio and Weidmann are all due on the speaker-slate

EUR/USD

In the early stages of trade, the pair saw a modest bout of upside following a minor spell of broad-based USD weakness as USD/JPY failed to breach the 119.00 handle with focus for EUR firmly placed on the slew of Eurozone PMIs. First up was France which saw a relatively mixed report with a large miss on the manufacturing report, although this failed to sway the pair too much with the weaker USD aiding the pair. However, the greatest source of price action for EUR/USD stemmed from the German release which saw an across-the-board miss with the manufacturing component slipping to within a whisker of contractionary territory by coming in at 50.0. This saw an immediate fast-money move lower in the pair with participants placing further scrutiny on the policy efforts of the ECB. Thereafter, the pair staged a modest pull-back of these losses while broadly tracking movements in the USD-index. Looking ahead, tomorrow sees a lack of tier 1 data while ECB’s Draghi, Constancio and Weidmann are all due on the speaker-slate.

USD/JPY

Once again the pair staged an impressive move higher during Asia-Pacific trade, with although there being no fresh fundamental newsflow, the JPY continued to remain out-of-favour compared to its major counterparts given the recent stimulus efforts of the BoJ and government. This saw the pair ebb towards the 119.00 level, a level which it failed to break above in early European trade and thus subsequently prompted a bout of weakness for the pair ahead of today’s key data releases. The pair was provided some reprieve following the US CPI release which exceeded expectations, however this move was short-lived as ultimately the figure is not a game changer for the Fed rate lift-off while the BLS said there could be more of a negative energy impact in the November CPI. Thereafter, the pair saw a minor uptick following the strong Philadelphia Fed release and New Home sales to lead the pair back towards relatively neutral territory.

GBP/USD

Following yesterday’s less dovish than anticipated BoE minutes release, all eyes for the pair were on the UK retail sales release. Heading into the release, the pair was provided some mild support by the weaker USD as well as cross-related buying in GBP/JPY. Against the grain of recent releases, the report exceeded expectations on all four of the headline figures and thus brought around an immediate fast-money move higher in the pair of around 30 pips to print session highs. Thereafter, the session was a relatively subdued one for GBP with a lack of fresh economic newsflow or UK data to provide the pair with any further traction. Looking ahead, tomorrow sees an absence of tier 1 UK data with BoE’s Miles due to speak after-market.