London Session Forex Recap – Nov. 17, 2014

  • U.K. Rightmove House Price Index y/y: 8.5% vs. 7.6% previous; m/m -1.7% vs. 2.9% previous
  • European Trade Balance: 17.7B EUR vs. 16B EUR forecast, 15.8B EUR previous

After an active Asia trading session, London trading was much calmer and choppier, but we did see a return to euro and pound selling right from the open.

On the economic data front, London forex traders finally got to trade the mixed U.K. housing data released early in the Asia session, and it looks like traders may have been focusing on the weakly monthly read as Sterling took a hit right from the London open.  Of course, there is a broad bearish sentiment on the pound since last week’s dovish BOE inflation report, so it might have been traders just hopping in with more short orders after a move higher during Asia trade, which was short lived.  Overall, it’s been a choppy ride for Sterling traders to start out the week, which is currently down against the Dollar (GBP/USD down 27 pips to 1.5637) and yen (GBP/JPY is down 41 pips to 181.75), mostly unchanged against the euro (EUR/GBP around .7989), and slightly up against the comdolls (GBP/AUD is up 8 pips to 1.7908).

In Europe, we saw improvements to the trade balance number, which didn’t seem to have much influence on the euro as the shared currency found little to no support before forex traders went back to selling at the London open.  Overall, it’s been a choppy session for the euro as well since it looks like the other stories and economic data points of the day seem to be having an equal influence across currency pairs:

EUR/USD is down 21 pips (-0.17%) to 1.2499, EUR/AUD is up 6 pips (+0.04%) to 1.4315, and EUR/NZD is down 49 pips (-0.32%) to 1.5771

The  forex calendar for the Monday afternoon London/morning U.S. session is light with only a few mid-tier economic events from the U.S. and Canada

At 1:30 pm GMT, we’ll get the Empire State Survey index (12 forecast vs. 6.17 previous) for a read on manufacturing conditions in the New York area, and from Canada we’ll see the foreigners securities investment data ($10.2B previous) for a read on inflow of capital through the purchase of securities like stocks, bonds, money markets, etc.  Both have the potential to be market movers, and the Loonie has been reacting well to even mid-tier events so we could see a short burst of volatility from data this hour.

At 2:15 pm GMT, we’ll get the U.S. capacity utilization and industrial production data for a fresh read on the health of the manufacturer, miner and utility sectors.  There isn’t much volatility with this number so we tend to see little reaction from the currency markets, but it’s good to know for getting a feel on the general health of the U.S. economy.

It’s likely we’ll continue to see more volatility from the Japanese yen as U.S. traders get to price in the fresh GDP news from Japan, and watch out for the euro and the British pound to see if the downside momentum will continue through the European close.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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