FX markets trade sideways as US GDP estimate figures awaited
City Index February 28, 2014 2:04 PM
<p>We have seen a very sideways week so far in the FX markets. Weather affected data in the US is still keeping rates where they […]</p>
We have seen a very sideways week so far in the FX markets. Weather affected data in the US is still keeping rates where they are until we get a clearer picture of how the US is doing with the cuts in asset purchases not showing in the recent month.
The main driver this week has been the unrest in Ukraine which has continued and has the potential to throw the markets out of sync on any news. This has mainly been helping safe haven currencies like the yen, which gained strength overnight. Some good data released from Japan also helped it move with factory orders jumping and inflation inching up in the right direction. But there’s still some anxiety around as this shows the economy could be ready to handle the sales tax hike proposed in April.
Today has the potential to get things livened up for the end of month data. We start with the EU CPI flash estimate, expected at 0.7%. There is no change from the previous estimate – a drop here will most certainly push the euro lower as the negative rates will be back on the cards from the ECB. With comments from Draghi last night saying that the eurozone was clearly not in deflation, it is possible that this data will keep it a low but steady reading.
US preliminary GDP are set to be released this afternoon, with a big cut predicted to 2.6% from the previous 3.2%. This leaves a lot of space for a surprise and will no doubt be the main event as more weather impacted data could continue or a surprise upward figure will start to give the USD some strength.
Supports 1.3685 1.3645 1.3580 | Resistance 1.3725 1.3740 1.3780
Supports 101.65 101.40 101 | Resistance 102.20 102.40 102.80
Supports 1.6720 1.6670 1.6620 | Resistance 1.6760 1.6800 1.6820
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