London Session Forex Recap – Oct. 30, 2014

  • Swiss UBS Consumption Indicator: 1.41 vs. 1.28 previous
  • U.K. Nationwide House Prices (sa) m/m: 0.5% vs. 0.3% forecast, -0.2% previous
  • Swiss KOF Leading Indicator: 99.8 vs. 99.2 forecast, 99.3 previous
  • German Unemployment change improves: -22K vs. 4K forecast, 9K previous; unemployment rate remains steady at 6.7%
  • European Economic Sentiment: 100.7 vs. 99.7 forecast, 99.9 previous
  • European Industrial Sentiment: -5.1 vs. -5.5 forecast/previous

Despite all of the positive data from Europe, the euro couldn’t find a bid during the morning London session.  The culprit could be a continuation of the FOMC event yesterday that was bullish for the U.S. dollar, meaning a big sell off in the EUR/USD. EUR/USD went from 1.2725 pre-FOMC to it’s current levels around 1.2574. The big move in the widely traded EUR/USD pair tends to have broad euro effects.  Another catalyst for euro weakness could be a potential deal between Russia and Ukraine on the future status of Crimea, which has the Russian rouble in hard rally mode against the euro.  Whatever the case may be, the euro is the only currency with any kind of directional movement, down against the majors:

EUR/JPY is down 29 pips (-0.21%) to 137.24, EUR/GBP is down 16 pips (-0.21%) to .7870, and EUR/CAD is down 40 pips (-0.29%) to 1.4086

The forex calendar for the Thursday afternoon London/morning U.S. session is pretty busy as well, including some top tier data for the U.S. to potentially add more volatility to the FOMC after party.

At 12:30 pm GMT, we’ll get the first estimate on third quarter U.S. GDP, with forecasts for 3% annualized growth vs. 4.6% previous.  The first reads do tend to spark big short-term reactions in the forex market, so it’s definitely one keep an eye on, especially if it conflicts with the positive sentiment from yesterday’s FOMC statement.

At 1:00 pm GMT, get preliminary reads on German inflation in the form of consumer price index and harmonized consumer price index data. The trend has been lower all year in this data, so if we do see a positive surprise as expected to 0.9% vs. 0.8%, then we could see a quick pop in the euro, which has taken a beating all session.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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