Foreign exchange market. European session: the euro traded higher against the U.S. dollar despite the disappointing economic data from Germany and France

Economic calendar (GMT0):

01:30    Australia                Retail sales (MoM)                    March   +0.3%  +0.4%     +0.1%

01:30    Australia                Retail Sales Y/Y                        March   +4.9%                  +5.7%

01:45    China                    HSBC Services PMI                  April      51.9                        51.4

05:45    Switzerland           Unemployment Rate                April      3.2%      3.2%       3.2%

06:00    Germany               Factory Orders s.a. (MoM)       March   +0.9%   +0.5%    -2.8%

06:00    Germany               Factory Orders n.s.a. (YoY)     March   +6.5%   +4.3%    +1.5%

06:45    France                  Trade Balance, bln                    March    -3.4       -4.0         -4.9

06:45    France                  Industrial Production, m/m       March   +0.1%   +0.4%     -0.7%

06:45    France                  Industrial Production, y/y         March   -0.5%                    -0.8%

07:00    Switzerland           Foreign Currency Reserves       April       437.9    438.4       438.9

The U.S. dollar traded mixed against the most major currencies ahead of the testimony from Fed Chair Janet Yellen later in the day. In addition, U.S. nonfarm productivity and U.S. unit labour costs will be released today. U.S. nonfarm productivity should decline 0.5% in the first quarter from a 1.8% increase in the previous quarter. U.S. unit labour costs should climb 2.3% in the first quarter from a 0.1% decrease in the previous quarter.

The euro traded higher against the U.S. dollar despite the disappointing economic data from Germany and France. German factory orders declined 2.8% in March from an increase of 0.9% in February. February’s figure was revised up from 0.6%. Analysts had forecasted a 0.5% rise. French industrial production decreased 0.7% in March from an increase of 0.1% in February. Analysts had expected a 0.4% increase.

The Swiss franc traded mixed against the U.S. dollar. Market participants remained unimpressed by the rise of the central bank’s foreign currency reserves. The Swiss National Bank (SNB) had released that the foreign currency reserves climbed to 438.9 billion Swiss francs in April from 437.9 billion Swiss francs in March. This figure shows the SNB had not bought euros to defend EUR/CHF 1.20 exchange rate floor.

The British pound increased to 9-week highs against the euro. The sterling was supported by speculation the Bank of England will hike interest rates due to strong growth of the U.K. economy. The British currency traded lower against the U.S. dollar. No economic data was published in Great Britain.

EUR/USD: the currency pair climbed to $1.3932

GBP/USD: the currency pair declined to $1.6954

USD/JPY: the currency pair was up to Y101.70

The most important news that are expected (GMT0):

12:30    Canada                  Building Permits (MoM)                            March        -11.6% +4.2% 

12:30    U.S.                       Nonfarm Productivity, q/q (Preliminary)  Quarter I     +1.8%  -0.5%  

12:30    U.S.                       Unit Labor Costs, q/q (Preliminary)          Quarter I      -0.1%  +2.3% 

14:00    U.S.                       Fed Chairman Janet Yellen Speaks                                                                    

23:01    United Kingdom     RICS House Price Balance                        April             57%      55%