Today’s trading session once again was subject to conflicting economic reports. The past six to eight weeks more and more reports show the global economy expanding at a much slower pace than previously expected. Overall traders continue to ignore potential negative economic reports and brush them aside.
Data out of China surprised to the upside today exports surged 10.6% in January while economists expected a marginal increase of 0.1%. December’s increase of a 4.3% increase in exports remained the same. Imports also surged 10.0%, beating expectations for a gain of 4.0% and also bettering December’s 8.3% rise in imports.
The Chinese data helped push commodity currencies such as the Australian Dollar as well as New Zealand Dollar higher during the Asian trading session. Australia as well as New Zealand heavily depend on economic developments out of China which translates into greater demand for commodities mined and produced in those two economies.
The overall positive trading mood soured after the Eurozone delivered a heavy disappointment in its industrial production figures which missed economists’ estimates. Industrial production in December contracted 0.7% while November was revised down to a gain of 1.6%. Year-over-year industrial production rose only 0.5% while November was revised down to 2.8%. Economists projected a contraction of 0.3% and a gain of 1.8%.
This data send the Euro in correction mode while the British Pound managed a strong rally after Bank of England minutes. The EURGBP currency pair enjoyed heavy volume to the downside on this combination.