London Session Recap – May 20, 2014

  • German PPI m/m: -0.1% vs. -0.3% previous
  • U.K CPI y/y higher-than-expected: 1.8% vs. 1.7% forecast, 1.6% previous

To highlight the main movers among the major currencies, I’ll start with the Aussie.  It continued it selloff that started during the Asia session after the RBA meeting minutes were released.  The rhetoric was dovish on growth and the RBA stated that rates are appropriate for the time being (i.e., no rate hikes).  The Aussie sold off across the board during the Tuesday session and is the big mover on the session:

AUD/USD is down 63 pips (-0.68%) to .9264, AUD/JPY is down 70 pips (-0.75%) to 93.89, and EUR/AUD is up 93 pips (+0.64%) to 1.4783

Risk aversion was also a market mover thanks to recent geopolitical issues (Ukraine and Vietnam), with today’s focus on Thailand as martial law was instituted earlier today to quell political protests.  The usual benefactor of risk aversion sentiment, the Japanese Yen, found another day of support as it rises higher on the session against the majors:

USD/JPY is down 13 pips (-0.14%) to 101.33, EUR/JPY is down 23 pips (-0.17%) to 138.86, and CAD/JPY is down 21 pips (-0.23%) to 93.07

Finally, we got a fresh economic catalyst from the U.K. in the form of CPI data, sparking big volatility as the number comes in higher-than-expected on both the monthly and yearly reads. The British Pound spiked higher on the initial reaction, but since has been faded to trade mixed against the majors:

GBP/USD is up 21 pips (+0.13%) to 1.6833, GBP/JPY is down 3 pips (-0.02%) to 1.6833, and the biggest mover of the session, GBP/AUD is up a big 153 pips (+0.85%) to 1.8168

The afternoon London/morning U.S. session calendar is extremely light on economic data with only the Canadian Wholesales Sales data to be a potential catalyst. It will be released at 1:30 pm GMT with expectations of 0.4% vs. 1.1% previous.  Also, both Philadelphia Fed President Plosser and New York Fed President Dudley will be giving speeches today on the economy, but the expectations are that we won’t see new hints of future Federal Reserve policy changes.

See also:

Asian Session Recap

U.S. Session Recap

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