Today's Highlights

  • Poor Chinese data deepens global slowdown gloom

  • German Gross Domestic Product contraction mirrors UK’s

 

Current Market Overview

Disappointing data for China fuels global economic fears

A poor set of Chinese data overnight has added to the global economic woes and weakened the currencies of China’s supplier nations. Industrial production growth fell back to 4.8% - a 17 year low, their unemployment rate rose to 5.3%, retail sales slipped and investment slipped as well. The markets have clearly become used to declining Chinese data because there was little reaction.

Overnight news also included a recovery in consumer sentiment in Australia, according to the Westpac index.

 

Euro weakens on poor Gross Domestic Product data

The Euro is a tad weaker this morning after German Gross Domestic Product (GDP) contracted by 0.1% in Q2 after 0.4% growth in Q1. This almost mirrors the UK’s data and is probably attributable to the same stockpiling ahead of Brexit, plus some changes in the timing of public holidays. No doubt the continuing slowdown in China will have impacted exports to that behemoth of an economy. We have also seen consumer price deflation in France taking more of the shine off the Euro. The markets are expecting Q2 GDP growth to remain around 1.1% on the year for the Eurozone but, as Germany is such a major component of the Eurozone’s GDP, the actual figure may well disappoint. Be ready for that.

 

Positive economic data for UK today, but can it help the Pound?

Sterling still failed to strengthen significantly on positive consumer inflation data, even after a small uptick in the unemployment rate reported yesterday. Sterling was saved by the rise in wages growth yesterday, though. At 3.9% per annum, that wage growth, alongside such strong employment numbers, will boost the prospects for the consumer end of the UK economy as long as inflation remains around 2.0% or slightly lower. Today’s figure of 2.1% is positive, but may not be enough to boost Sterling much, thanks to Brexit fears, but it can’t hurt the Pound. Maybe a rise in Producer Price inflation will help, up from 1.6% in June to 1.8% in July.

 

US trade data expected today

This afternoon’s US data is confined to import and export numbers. That is unlikely to shift USD sentiment. With much larger factors in play, like the China and Middle East situations, we need political change to get any kind of USD change.

Have a great hump day everyone.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD drops below 1.11 amid upbeat US data, trade concerns

EUR/USD is trading below 1.11 after robust US housing figures and solid consumer sentiment figures were published. Earlier, the common currency suffered from the concerns of new US tariffs on the EU.

EUR/USD News

GBP/USD down 100 pips after UK retail sales badly disappoint, amid USD strength

GBP/USD has plunged below 1.3050 after UK retail sales badly disappointed with a fall of 0.6% in December, on top of downward revisions. Odds of a BOE cut have risen.

GBP/USD News

Crypto market hyperspace mode On

The secondary actors of the crypto-sphere awaken and rally hard. Leading coins battle with greater resistance at the gates of a full bullish market. The only risk is an over-shoot, but that sentiment remains neutral.

Read more

Gold looks to close week flat below $1560

The XAU/USD pair climbed to a fresh daily high of $1560 in the early trading hours of the American session but struggled to preserve its momentum.

Gold News

USD/JPY: Losing bullish momentum but retaining gains

Chinese encouraging data kept markets in risk-on mode at the beginning of the day. The US January Michigan Consumer Sentiment Index is seen at 99.3, matching December figure. USD/JPY holding at the upper end of its weekly range could correct lower.

USD/JPY News

Forex Majors

Cryptocurrencies

Signatures