London Session Forex Recap – Oct. 24, 2014

  • German GFK Consumer Sentiment improves: 8.5 vs. 8.0 forecast, 8.4 previous
  • U.K. GDP (1st. Est) q/q: 0.7% vs. 0.7% forecast, 0.9% previous

It looks like forex traders have already checked out for the weekend because much like the Asia session, London trade was mostly low volatility action and sideways choppiness.

We did have a couple of economic data points in the queue to spark a little bit of action.  The GFK consumer sentiment number showed a little bit of optimism in German and provided a little boost to the euro ahead of the London open, but it looks like sellers quickly took control to push euro pairs slightly lower on the session (mostly against the comdolls):

EUR/AUD is down 37 pips (-0.26%) to 1.4395, EUR/NZD is down 31 pips (-0.20%) to 1.6118, and EUR/CAD is down 12 pips (-0.08%) to 1.417

EUR/USD is the outlier among the euro weakness, most likely on broad weak USD sentiment.  The catalyst for Greenback selling may be new news that a doctor who traveled to West Africa was diagnosed with Ebola in New York City last night.  The U.S. dollar is taking a broad hit on the session, with momentum picking up as we head into the U.S. session:

USD/JPY is down 29 pips (-0.27%) to 107.96, EUR/USD is up 15 pips (+0.12%) to 1.2659, and GBP/USD is up 29 pips (+0.18%) to 1.6055

Finally, we got the first estimate on quarterly U.K. GDP, showing us a lower growth number at 0.7% vs. 0.9% in the second quarter.  This initial reaction was a pop higher for Sterling on the news, but sellers quickly took advantage of that to push the British pound lower.  This brought GBP pairs to mostly unchanged levels on the session, with exception against the Aussie and Kiwi who are finding a bid against the majors without a direct catalyst.

GBP/AUD is down 48 pips (-0.27%) to 1.8243, GBP/NZD is down 36 pips (-0.17%) to 2.0444

The forex calendar for the Friday afternoon London/morning U.S. session is near barren with only one U.S. event in the queue, U.S. new home sales at 3:00 pm GMT.  The forecast is for 470K new homes vs. the previous read of 500K in August.  This is a top tier event, but should only provide short-term volatility unless we see a huge surprise from the expected or previous read.  I have a feeling that risk sentiment will continue to influence currency behavior as news on Ebola, European economic troubles and geopolitical tensions remain as the main headlines. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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