Trade figures released in China showed weak exports, while inflation figures were soft. The data suggests that Chinese policy will continue to remain accommodative, as the outlook for the Chinese, and ultimately the global, growth is called back into question. Weak data from China collided with a downward revision to Q4 GDP in Japan. Currency markets were impacted by the data as investors jumped into safe haven currencies, such as the Swiss franc and Japanese yen. The rise in the franc has been somewhat restrained in comparison because Swiss National Bank’s Jordan was out this weekend reminding investors of the central bank’s willingness to defend its 1.20-minimum bid policy against the euro at all costs.
Sterling
Sterling faces industrial output and trade figures this week, but more than economic data the currency could be influenced by testimony given by Bank of England’s Carney on the FX fixing scandal. Lawmakers are using the scandal to increase the bank’s oversight. Sterling could potentially come under a bit of selling pressure as speculators size up the bank’s credibility.
US dollar
Non-farm payrolls data showed 175,000 new jobs created, while the rate of unemployment ticked higher to 6.7 per cent. The better-than-expected economic data helped to lift equity markets, inspired risk taking and ultimately weighed on the US dollar.
Euro
The euro rose to levels not seen in nearly two-and-a-half years after the European Central Bank left monetary policy unchanged and US economic data proved to be better than forecast. German industrial output data rose for the third consecutive month, beating forecast and providing support for the single currency.
Japanese yen
The Japanese yen is trading higher after weak economic data released in Japan and China has called into question the strength of the global economy. Investors bought the safe haven currency as equity markets tumbled when Q4 GDP was revised lower in Japan and China announced a trade deficit.
Swiss franc
Swiss National Bank’s Jordan spoke about defending the Swiss franc if safe haven flows were to increase. The policymaker said that the central bank remains prepared to hold its minimum bid policy of 1.20 against the euro, while acknowledging that the situation in the Ukraine is a risk that will not be underestimated. The Swiss franc continues to trade near two-and-a-half year highs against the US dollar.