London Session Recap – Aug. 8, 2014

  • Swiss Unemployment Rate remains unchanged at 3.2% as expected
  • German Trade Balance weaker: 16.5B EUR vs 18.9B EUR forecast, 17.8B EUR previous
  • French Industrial Production better-than-expected: 1.3% vs. 1.0% forecast, -1.6% previous
  • U.K. Trade Balance weaker-than-expected: -9.41B GBP vs. -8.9B GBP forecast, -9.15B GBP previous

Looks like currency traders were looking to end the week on high note as forex price action stayed active on economic news and geopolitical risks.

The biggest movers of the London session may be the comdolls, bouncing back after taking a drubbing through the U.S. and Asia sessions.  There doesn’t seem to be a direct catalyst for the intraday shift, but it looks like the AUD and NZD have taken back much of their losses on the session. AUD/USD is now slightly above breakeven, trading around .9274 after dipping as low as .9240.

The British Pound was on the move as well off of weak trade balance numbers to add to sentiment the recover in the U.K. is weakening.  Sterling is down on the session, especially against the safe havens as geopolitical fears rise on Iraq air strike news–and that move doesn’t look like it’s slowing down any time soon:

GBP/USD is down 27 pips (-0.16%) to 1.6803, GBP/JPY is down 54 pips (-0.32%) to 171.26, and GBP/CHF is down 62 pips (-0.41%) to 1.5232

We’ve got another light forex calendar for the afternoon U.K.morning/U.S. session, but what we got big news from Canada to spark more volatility for forex traders to jump on.

At 1:30 pm GMT, we got the monthly Canadian employment numbers, with the net change number coming in at only 200 jobs vs. the 20K forecast, -9.4K previous.  Unemployment ticked lower to 7.0%  vs. 7.1 forecast/previous.  The reaction in the Loonie was logically a bearish one with USD/CAD jumping about 45 pips to 1.0960; we’ll see how traders price in the news for the rest of the session.

At the same time, we also got preliminary reads on U.S. unit labor costs (ticks lower to 0.6% vs. 1.1% forecast) and non-farm productivity (2.5% vs. 1.6% forecast).  These are usually not big market movers, which looks to be the case as pairs like USD/JPY and USD/CHF aren’t reacting much to the news.

At 3:00 pm GMT, we’ll get the final data point of the week from the U.S. in the form of wholesale inventories, forecasted to rise to 0.7% vs. 0.5% previous month.  This is a mid-tier event that may have influence, but look for the markets to take its cues from risk sentiment and geopolitical risk for the rest of the session.  Stay Frosty!

See also:

Asia Session Recap

U.S. Session Recap

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