London Session Recap – May 27, 2014

  • Swiss Trade Balance inline with expectations (2.43B CHF), but previous read revised lower to 2.00B CHF
  • U.K. BBA Mortgage Approvals below expectations: 42.17K vs. 45.1K forecast, 45.05K previous

Currencies were on the move during the morning London session as U.K. traders came back off of holiday, continuing the risk taking sentiment seen during the Asia session.

Traders shifted towards risk-on behavior early in today’s session as a negative sentiment on economic data may mean easy money policies will remain for the foreseeable future; safe havens like the U.S. Dollar and Japanese Yen weakened in favor for risk currencies like the Comdolls.  Aussie and Kiwi pairs are still mostly up on the session, especially against the Swiss Franc, down thanks to a downward revision to previous Swiss trade data:

AUD/CHF is up 24 pips (+0.29%) to .8284, NZD/CHF is up 10 pips (+0.12%) to .7650, CAD/CHF is up 24 pips (+0.29%) to .8255

The outlier among today’s price action is the British Pound, which fell after weaker-than-expected BBA Mortgage Approval data. Sterling is mostly down across the board on the session but it looks like the fall has stabilized for now:

GBP/USD is down 11 pips (-0.07%) to 1.6827, EUR/GBP is up 17 pips (+0.21%) to .8111, and GBP/JPY is down 10 pips (-0.06%) to 171.48

We’ll finally get some action for the afternoon London trading session as U.S. traders come off a long weekend, and we have tier one data coming in the U.S calendar.

At 1:30 pm GMT, we’ll get the U.S. Durable Goods data with expectations to come in far below previous readings (headline forecast at -0.7% vs. 2.5% previous). Whether it comes or below previous and/or forecasts, it’s tough to tell whether it would be Greenback positive or negative as traders seem to already be pricing in weaker data.  Whatever the case may be, it’ll most likely spark a temporary surge in volatility, so be sure to adjust positions and trade plans to stay within your risk parameters.

To close out the rest of the London trading session, we’ll see get S&P Case-Shiller Home Price data at 2:00 pm GMT, and another tier one event at 3:00 pm GMT in the form of U.S. Consumer Confidence data. The latter is potentially positive for the Greenback as it’s forecasted to come in above the previous read (83.0 vs. 82.3 previous).  If so, we could see choppiness to close out the Tuesday trading session, so be aware of what’s on the forex calendar and stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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