USD gains strength ahead of EU PMI and US unemployment data releases today

The USD gained some strength towards the end of last night after the Fed’s minutes were announced. The main points were that Fed officials will see predictable QE cuts in the coming months unless there are major economic surprises. There could also be a possible change in forward guidance on rate rises as we near the 6.5% unemployment level.

The main market mover in Asia was the Chinese Flash PMI which has come in at 48.3 at a seven-month low. This is still below the 50 level and shows a contraction and a dip from the last reading at 49.5. This sent AUD lower as usual and JPY higher on a safe haven basis, even with a record Japanese trade deficit highlighting the risk of economic stumble.

Today will be a busy morning in Europe with French and then German PMI releases, both of which are expected to come out under expectations. This is likely to send the euro lower on the back of making new lows. Next up will be the EU PMI figures, which don’t bode well after the two biggest economies put out poor data.

In the US session the Core CPI is due, with no change expected at 0.1% and unemployment claims expected around 335k.  PMI for the US is also due out today and is still expected at 53.6. The Philly Fed manufacturing index is expected at 9.2, with lots of possible swings possible in the data.

In the Asian session the BoJ will be releasing its minutes, which will affect how the JPY plays out.

EUR/USD

Supports 1.3690 1.3660 1.3580 | Resistance 1.3760 1.3785 1.3825

USD/JPY

Supports 101.55 100.75 99.90 | Resistance 102.00 102.50 102.80

GBP/USD

Supports  1.6630 1.6600 1.6570 | Resistance 1.6700 1.6750 1.6820