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Forex: Pound May Correct Lower After BOE, Aussie Higher on Jobs Data

By , Currency Strategist
10 April 2014 05:54 GMT

Talking Points:

  • British Pound May Correct Lower After a Status-Quo BOE Rate Decision
  • Aussie Dollar Jumps on Jobs But Chinese Export Slump Tempers Advance
  • Japanese Yen Outperforms on Haven Demand as Nikkei 225 Trades Lower

A monetary policy announcement from the Bank of England headlines the economic calendar in European hours. On the whole, UK data outcomes have been broadly stable relative to consensus forecasts since the March sit-down. Meanwhile, leading PMI data suggests manufacturing- and service-sector growth accelerated at the slowest pace since June 2013. Furthermore, the latest set of CPI figures put the headline year-on-year inflation rate at just 1.7 percent, the lowest since October 2009.

Taken together, this suggests Governor Mark Carney and company are unlikely to back away from the central bank’s accommodative policy setting, leaving things unchanged for the time being. While a status quo outcome is generally expected, the absence of hawkish cues in the context of three consecutive days of British Pound gains may prompt a degree of profit-taking, sending the UK unit lower in the near term.

The Japanese Yen outperformed in overnight trade as the Nikkei 225 stock index traded lower, boosting demand for the regional safe-haven currency. The Australian Dollar likewise advanced after the March Employment data showed the economy added 18.1k jobs, topping forecasts calling for a meager 2.5k increase. The Aussie’s gains were tempered by a disappointing set of Chinese Trade Balance figures however. The report revealed an unexpected 6.6 percent year-on-year drop in exports, an outcome that fell far short of the 4.8 percent increase penciled in by economists ahead of the release.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

22:30

NZD

Business NZ PMI (MAR)

58.4

-

56.5

23:01

GBP

RICS House Price Balance (MAR)

57%

43%

47%

23:50

JPY

Machine Orders (MoM)

-8.8%

-2.6%

13.4%

23:50

JPY

Machine Orders (YoY)

10.8%

17.5%

23.6%

23:50

JPY

Bank Lending incl. Trusts (YoY)

2.1%

-

2.2%

23:50

JPY

Bank Lending Banks ex-Trust

2.3%

-

2.4%

1:00

AUD

Consumer Inflation Expectation (APR)

2.4%

-

2.1%

1:30

AUD

Unemployment Rate (MAR)

5.8%

6.1%

6.1%

1:30

AUD

Employment Change (MAR)

18.1K

2.5K

48.2K

1:30

AUD

Participation Rate (MAR)

64.7%

64.8%

64.9%

1:30

AUD

Full Time Employment Change (MAR)

-22.1K

-

80.0K

1:30

AUD

Part Time Employment Change (MAR)

40.2K

-

-31.8K

2:00

JPY

Tokyo Avg Office Vacancies (%)(MAR)

6.70

-

7.01

2:07

CNY

Trade Balance (MAR)

$7.71B

$1.80B

-$22.99B

2:07

CNY

Exports (YoY) (MAR)

-6.6%

4.8%

-18.1%

2:07

CNY

Imports (YoY) (MAR)

-11.3%

3.9%

10.1%

6:00

JPY

Machine Tool Orders (YoY) (MAR P)

-

26.1%

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

6:45

EUR

French Manufacturing Production (MoM) (FEB)

0.3%

0.7%

Low

6:45

EUR

French Manufacturing Production (YoY) (FEB)

1.0%

1.4%

Low

6:45

EUR

French Industrial Production (MoM) (FEB)

0.2%

-0.2%

Low

6:45

EUR

French Industrial Production (YoY) (FEB)

-0.3%

-0.1%

Low

6:45

EUR

French CPI (MoM) (MAR)

0.6%

0.6%

Low

6:45

EUR

French CPI (YoY) (MAR)

0.8%

1.1%

Low

6:45

EUR

French CPI - EU Harmonised (MoM) (MAR)

0.5%

0.6%

Low

6:45

EUR

French CPI - EU Harmonised (YoY) (MAR)

0.8%

1.1%

Low

8:00

EUR

Italian Industrial Production s.a. (MoM)

-0.3%

1.0%

Low

8:00

EUR

Italian Industrial Production n.s.a. (YoY)

-1.7%

Low

8:00

EUR

Italian Industrial Production w.d.a. (YoY)

1.1%

1.4%

Low

8:00

EUR

ECB Publishes Monthly Report

-

-

Medium

11:00

GBP

Bank of England Rate Decision (APR 10)

0.50%

0.50%

High

11:00

GBP

BOE Asset Purchase Target

375B

375B

High

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EUR/USD

1.3668

1.3750

1.3803

1.3832

1.3885

1.3914

1.3996

GBP/USD

1.6621

1.6697

1.6745

1.6773

1.6821

1.6849

1.6925

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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10 April 2014 05:54 GMT