ForexLive European morning FX news wrap: Pound falls as PMI data incite recession fears

<p>Headlines:</p><ul><li><a target=“_blank“ href=““>Dollar steadies as risk optimism fades</a></li><li><a target=“_blank“ href=““>UK January flash services PMI 48.0 vs 49.7 expected</a></li><li><a target=“_blank“ href=““>Eurozone January flash services PMI 50.7 vs 50.2 expected</a></li><li><a target=“_blank“ href=““>Germany January flash manufacturing PMI 47.0 vs 47.9 expected</a></li><li><a target=“_blank“ href=““>France January flash services PMI 49.2 vs 49.8 expected</a></li><li><a target=“_blank“ href=““>ECB’s Nagel: We need to keep tightening to dampen price pressures</a></li><li><a target=“_blank“ href=““>Germany February GfK consumer sentiment -33.9 vs -33.0 expected</a></li><li><a target=“_blank“ href=““>France January business confidence 102 vs 102 prior</a></li><li><a target=“_blank“ href=““>UK January CBI trends total orders -17 vs -8 expected</a></li><li><a target=“_blank“ href=““>Switzerland December trade balance CHF 2.83 billion vs CHF 2.31 billion prior</a></li></ul><p>Markets:</p><ul><li>JPY leads, GBP lags on the day</li><li>European equities lower; S&P 500 futures down 0.3%</li><li>US 10-year yields down 2.1 bps to 3.502%</li><li>Gold up 0.3% to $1,936.73</li><li>WTI crude flat at $81.96</li><li>Bitcoin down 0.3% to $22,933</li></ul><p style=““ class=“text-align-justify“>The European morning session featured quite a number of data releases and it was PMI readings that helped to move the needle in markets today. The euro area figures were not too bad but not too good either, but at least pointing to a less bleak start to the new year as economic activity stagnated.</p><p style=““ class=“text-align-justify“>Instead, it was the UK figures that instigated some moves with the pound notably sliding on the back of rising recession fears. The report showed that the UK services sector slumped to its weakest in two years and that was enough to see GBP/USD fall from 1.2380 to 1.2303 and holding near the lows now.</p><p style=““ class=“text-align-justify“>Equities were steadier early on but the slight optimism faded and now the dollar also picked itself up from the lows to keep little changed for the most part – in particular against the aussie and kiwi.</p><p style=““ class=“text-align-justify“>The antipodeans were targeting key upside breaks above 0.7000 and 0.6500 respectively before price is pulled back on the day now.</p><p style=““ class=“text-align-justify“>Meanwhile, the yen continues to do its thing as the volatility trip continues with USD/JPY down around 129.90 to 130.20 levels throughout the session.</p><p style=““ class=“text-align-justify“>We’ll have US PMI data coming up later in the day and that will likely play into the underlying risk sentiment once Wall Street steps into the fray later today.</p>

This article was written by Justin Low at

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