Overall, for a third day in a row, the European session failed to spark any important moves. The only exception was the yen, which was dragged higher by U.S. futures. The rest of the major currency pairs just moved within the same range as in the Asian session, or eventually retraced some of the moves seen earlier today. In addition, the European session seems to have ignored the positive equity numbers, which theoretically should have weakened the dollar.

The Euro (Eur/Usd) saw some strong selling orders in the Asian session, but then started to recover slowly, until it touched the Asian opening price. Tonight, the euro fell to the lowest value since November as the pair has declined for four consecutive trading days.

The service side of the economy in the Euro-area has been in contraction for the last nine months according to the latest PMI release. The released number of 39.2 is a multi-year low, as the economy is struggling to show any signs of growth amid the global slowdown.

The Pound (Gbp/Usd) tested the low of the last day of trading, in the Asian session. After the London open, the pair surged higher, but still was not able to trend decisively. Tomorrow, the BoE is expected to reduce the overnight interest rate by 50 basis points.

The consumer confidence for the U.K. in February came in at 43 despite analysts’ forecasts for a much lower 38 reading. The index rose by two points, this is the first rise seen since October 2008. In separate components of the report, consumers are showing that they are becoming more optimistic about future economic conditions and are thinking that now is a good time to start making large purchases.

The U.K. Service PMI beat analysts’ expectations for a third consecutive month. However, the release still shows the service side of the economy has contracted for more than ten consecutive months, near the fastest pace seen in the last decade

The Aussie (Aud/Usd) plunged nearly 90 pips in the early Asian session, after a very weak GDP report, but spent most of the remaining Asian and European sessions recovering the ground lost. By the middle of the European trading hours, the aussie was again trading near the Asian session opening price.

In trend terms, the GDP decreased 0.1 percent and non-farm GDP decreased by 0.3 percent. However, in seasonally adjusted terms GDP dropped by 0.5 percent, which is well below expectations of a 0.2 percent increase. In seasonally adjusted terms, the largest negative contribution was from inventories, which were offset by the positive contribution from imports and private business investment. The sectors that also contributed to the decline were manufacturing (-0.5%), property and business services (-0.3%), and wholesale trade (-0.2%).

The Cad (Usd/Cad) traded, in the overnight market, between the 1.2965 area, where the pair topped in the last day of trading, and the neutral pivot point (1.2910). Yesterday, the Bank of Canada reduced the overnight rate down to 0.50% and suggested it will target a quantitative easing regime, something that should weaken the Canadian Dollar.

The Swissy (Usd/Chf) traded in large swings around TheLFB R1 (1.1810) during the European session, after it advanced 40 pips during the Asian trading hours. Currently, the swissy is trading near the upper area of the range it developed in the last few weeks. 

The Yen (Usd/Yen) traded in a 30-pip range in the Asian session, but managed to rise sharply during the European trading hours, gaining almost 100 pips and making a new high for the current uptrend. In the last four weeks of trading, the yen gained more than 1000 pips, as the pair broke free from its equity link.