The stock indexes are still the main drivers to the Forex currencies and we believe they will keep influencing the market till the end of the week, especially when the economic calendar is not full with important events.
The Eurostat published the Eurozone industrial production report. Leading indicators are showing mixed background. On the one hand, the Manufacturing PMI positive dynamics makes us think that the data output will be bit better than the forecast. On the other hand, the November Germany and France industrial production recorded a decrease which is a negative scenario signal. The data came in at the level of -0,7%(m/m) and 1,1% (y/y) against the forecasted -0,3% (m/m) and 1,3% (y/y). By the end of the trades the pair euro/dollar showed a growth.
The British corporations suffer from weak external demand and a sterling high exchange rate against the euro. We do not expect strong data taking into account the factory orders reduction and the December Manufacturing PMI decline. We note a fourth quarter manufacturing sector negative trend. Investors are beginning to lay in the quotes most pessimistic expectations about the fourth quarter UK GDP. The pair GBP/USD was trading in a flat.
The carry trade deals closure has traditionally been a positive factor for the Japanese yen as the funding currency Forex. The pair dollar/yen fell by the end of the trades.