London Session Recap – July 29, 2014

  • German Import Price Index: m/m 0.2% vs. 0.3% forecast; y/y inline with -1.2% forecast, above -2.1% previous
  • U.K Mortgage Approvals better-than-expected: 67.2K  vs. 63K forecast, 62K previous
  • U.K. Net Consumer Credit: 0.4B GBP vs. 0.8B GBP forecast, 0.7B GBP previous

First, the Kiwi stabilized from its fall after a report from New Zealand’s dairy giant, Fonterra, reported that we could see lower earnings for dairy farmers.  The New Zealand Dollar saw drops of around -0.50% since the news, but it looks like the bottom has been established during the London session, and we even have a bit of a bounce.  But for the most part, the Kiwi is still the biggest loser on the session:

NZD/USD is down 29 pips (-0.34%) to .8515, NZD/JPY is down 18 pips (-0.21%) to 86.85, and the biggest mover on the session is EUR/NZD, up 59 pips (+0.38%) to 1.5769

The British Pound is also on the move after reporting mixed consumer data.  It looks like the weak net consumer credit number was the focus, as the main reaction by forex traders was to sell off Sterling after the initial move higher.  The following move lower continues to have momentum without any signs of stabilizing at the moment:

GBP/USD is down 30 pips (-0.18%) to 1.6950, GBP/JPY is down on 4 pips but below the 173.00 handle, and EUR/GBP is up 11 pips (+0.16%) to .7922

The forex calendar for the Tuesday afternoon U.K./morning U.S. trading session is light with only a couple of U.S. data points.

First, at 2:00 pm GMT, we’ll get the S&P Case-Shiller Home Price data, with a forecast of a 10% rise vs. 10.82% previous y/y number.  And the big number for today for the Greenback will come at 3:00 pm GMT in the form of the CB Consumer Confidence number.  The market expects around a 85.5 read, slightly above the 85.2 read in the previous month.  Consumer confidence is important to watch as it can be a guide for future consumer spending, a very large part of the U.S. economy.

This number has been on the upswing since the beginning of the year, and with jobs data improving, there is a good chance we could see another tick higher this month.  Whatever the read may be, we’re still trading in the summer conditions of low volatility and low liquidity, which means it’s a good idea to be aware of the potential for quick spikes during top tier news events, like the ones we’re seeing today.  Stay frosty forex friends!

See also:

Asia Session Recap

U.S. Session Recap

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