EURUSD: This was then countered by the move higher in EUR/JPY

EUR/USD

With a lack of notable economic commentary from the Eurozone, attention turned to today’s Manufacturing PMIs. However, the numbers were final readings and came in largely mixed and thus failed to provide the pair with any notable direction. Later on in the session, EUR endured some weakness given the move lower in EUR/GBP below the 0.8000 handle following the UK data. However, this was then countered by the move higher in EUR/JPY. The pair largely traded in a consolidated fashion below the key 1.3700 handle where there was a do not touch option barrier in place, which ultimately remained intact. Looking ahead, tomorrow sees an absence of tier 1 data or ECB speakers and as such price action for the pair may be more influenced by events in the US with ADP employment change, ISM New York and factory orders due for release.

GBP/USD

Following a relatively neutral open, focus was on the UK manufacturing PMI number at 0930BST which beat expectations (57.5 vs. Exp. 56.8) and showed the 16th consecutive month of expansion and its highest reading since November 2013. GBP/USD consequently extended its weekly gains by breaking above the 1.7100 handle to trade at its highest levels since October 2008, with further upside stemming from the technical break below 0.8000 in EUR/GBP. Furthermore, in a similar fashion to yesterday, GBP was provided support by the move higher in UK rates as selling pressure in Gilts continues. Looking ahead, tomorrow sees a lack of tier 1 data from the UK, while BoE’s Haldane is due to make a panellist appearance but text no text is to be released.

USD/JPY

Overnight saw the release of the BoJ’s Tankan Survey which was largely mixed although saw a modest increase in risk appetite with Large All Industry Capex printing its highest reading since 2007. This saw a bout of JPY weakness and consequently saw the pair move back above the 101.50. With the move to the upside continuing throughout early trade, prices were heading towards large sized offers at 101.75 and the 200DMA, although these levels failed to be met with USD/JPY trading in a relatively rangebound manner for the remainder of the session.