London Session Forex Recap – Oct. 1, 2014

  • Swiss Manufacturing PMI weaker-than-expected: 50.4 vs. 52 forecast, 50.3 previous
  • European Manufacturing PMI dips to 50.3 vs. 50.5 forecast/previous
  • U.K. Manufacturing PMI weaker: 51.6 vs. 52.7 forecast, 52.2 previous

We saw a quick spike higher in Swiss franc pairs on rumors that the Swiss National Bank was “unofficially buying” at 1.2050.  EUR/CHF jumped from just above 1.2050 to top out just under 1.2080 before the rally ran out of steam.  This of course had a broad negative affect on the Swiss franc, pushing the franc up for the day again the non-comdolls, while shaving off its big gains against the comdoll currencies from earlier on the session:

USD/CHF is up 35 pips (+0.36%) to .9583, GBP/CHF is up 29 pips (+0.19%) to 1.5510, and AUD/CHF  is down 14 pips (-0.15%) to .8337

For the rest of the European region currencies it’s manufacturing PMI day, and for the most part it was mostly weaker reads from both the eurozone countries and the U.K. The only bright spot was an uptick from Italy, coming in at 50.7 vs. 49.8 previous.  Overall, the numbers knocked the euro down into negative territory on the session, and the reaction in the British Pound has been mostly choppiness against the majors.

EUR/USD is down 18 pips (-0.14%) to 1.2607, GBP/USD is down slightly by 5 pips (-0.03%) to 1.6209, and EUR/GBP is down 9 pips (-0.12%) to .7778

The economic calendar for the Wednesday afternoon London/morning U.S. session has a couple of potential market movers that forex traders may find trade worthy.

At 1:15 pm GMT, we got the ADP Non-Farm employment change coming in at 213K (205K forecast and 204K previous) and the initial reaction was bearish for the Greenback.  This a read on the jobs sector excluding the government and farming industry, so forex traders view this number as an indicator of what we may see on Friday with the NFP number.  While the reaction is fresh, it may continue to push the Greenback around for the next few hours.

Coming up at 2:45 pm GMT, we’ll get the manufacturing PMI read from the U.S., which usually doesn’t have a big impact on the U.S. dollar because of the upcoming ISM number, but it is worth being aware of in case we do get a surprise read.  The forecast number to come inline with the previous read of 57.9

And to round out the forex calendar at 3:00 pm GMT, we’ll get the U.S. construction spending and the ISM manufacturing PMI numbers.  The ISM manufacturing PMI number is the more closely watched event of the two, and it’s one to watch incase we see the same weakening PMI trend lower around the globe affect the U.S. as well.  The forecast is for the ISM number to tick lower to 58.5 vs. 59 previous, which could shake things up for all of the Greenback bulls out there.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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