Here are the Top 5 Forex Developments for the trading week between 11/17/14 and 11/21/14:
Number One: Japanese GDP
The Japanese economy tanked into a recession in the third-quarter as Abe’s Abenomics once again after his sales tax increase on April 1st has punished the Japanese economy, its businesses and consumers. Economists expected a rebound of 2.2% in the third-quarter after the second-quarter’s 7.3% contraction. The third-quarter GDP contracted by 1.6%, but the Japanese Yen managed to regain some lost ground despite the surprise recession.
Number Two: Eurozone PMI
Hopes for a stronger performance out of the Eurozone received a hit with the release of the Eurozone Composite PMI which slowed down to 51.4, the Eurozone Manufacturing PMI which slowed down to 50.4 and the Eurozone Services PMI which slowed down to 51.1 in November. Economists expected a slight improvement of 1.2 points, 0.2 points and 0.1 points as compared to October. The Euro sold off to a new multi-year high before reversing losses and rallying higher.
Number Three: Canadian CPI
Inflation in Canada increase in October with the CPI rising 0.1% month-over-month and 2.4% annualized. Economists expected a contraction of 0.1% and increase of 2.1%. The core CPI rose 0.3% month-over-month and 2.3% annualized against expectations for an increase of 0.2% and 2.1%. This has initially rallied the Canadian Dollar which has since given up a portion of its gains.
Number Four: UK Retail Sales
Retail sales in the UK came in much better than expected in October and rose 0.8% month-over-month and 4.6% annualized. Economists expected an increase of 0.3% and 4.2%. Retail sales excluding autos rose 0.8% month-over-month and 4.3% annualized which beat expectations for an increase of 0.3% and 3.8%. The British Pound managed to gain ground against all major currency pairs and the overall positive mood continued into this week.
Number Five: Chinese HSBC Manufacturing PMI
The Chinese manufacturing sector resumed its slowdown and the HSBC Manufacturing PMI for China fell to 50.0. Economists expected a slowdown to 50.2 in November from October’s level of 50.4. The Chinese manufacturing sector barley avoided contraction. A reading above 50.0 points towards an expansion while a reading below 50.0 points to a contraction; commodity currencies felt the impact and forex traders should monitor the Chinese economy more closely over the next few months.