Here are the Top 5 Forex Developments for the trading week between 11/10/14 and 11/14/14:
Number One: Eurozone GDP
Everyone expected bleak figures out of the Eurozone and dark clouds hovered over today’s GDP report for the third-quarter. Expectations called for an increase of 0.1% in the third-quarter and an increase of 0.7% annualized GDP growth figure. Forex traders received a slightly better GDP reading with a 0.2% and 0.8% growth rate. This may be a very minor improvement, but a much needed one. The Euro could find support and advance next week from closing levels on Friday.
Number Two: US Advanced Retail Sales
The last retail sales reports disappointed and many worried about the 0.3% contraction reported in September. A second contraction in October would have plunged the US Dollar, but retail sales showed an increase of 0.3% which means that consumer spending over the past two months came in flat. Regardless of this beat, retail sales are offering another bleak insight into the US economy. The data point was strong enough to rally the US Dollar over 50 pips after the release.
Number Three: Bank of England Inflation Report
The biggest takeaway from the inflation report was a remark that inflation in the UK could drop to 1.0%. British Pound bulls did not want to hear more reasons for the delay of an increase in interest rates and the GBPUSD was especially hard hit with a drop of over 300 pips this week which dropped this currency pair below the 1.5600 level after erasing every support level possible. Be careful with the GBPUSD next week.
Number Four: Chinese Consumer/Producer Price Index
Worries about China remain and the People’s Bank of China continues to be faced with a deflation problem evident in its PPI. The PPI did not only slide deeper into deflation, but did so at an accelerated pace. Economists expected the annualized PPI for October to come in a -2.0%, up 0.2% from September’s PPI of -1.8%. The PPI slid to -2.2%. The CPI remained unchanged at 1.6%. Commodity currency traders watch out!
Number Five: Chinese Industrial Production
Remaining with the Chinese theme, industrial production was reported at 7.7% for October year-over-year. Economists expected no change at 8.0%. This helped increase the steep sell-off in commodities. There are cracks in the Chinese economy and the bigger those cracks become the bigger the impact will be on the global economy. Watch out for the Australian Dollar, Canadian Dollar, New Zealand Dollar and Swiss Franc.