London Session Forex Recap – Nov. 20, 2014

  • European Flash Manufacturing PMI: 50.4 vs. 50.8 forecast, 50.6 previous
  • European Flash Services PMI: 51.3 vs. 52.4 forecast, 52.1 previous
  • U.K. Retail Sales headline m/m: 0.8% vs. 0.3% forecast, -0.4% previous; Core m/m at 0.8% vs. 0.3% forecast, -0.3% previous
  • U.K. CBI Industrial Trends: 3% bal vs. -5% bal forecast, -6% bal previous

The euro was a big mover right from the London open thanks to weak manufacturing and services PMI data. It’s definitely not looking good for the region as sentiment continues to tick lower; France continues to post contractionary numbers (mfg PMI at 47.6 vs. 48.5 previous; services PMI 48.8 vs. 48.3 previous) and Germany inches closer to contractionary levels (mfg PMI at 50.0 vs. 51.4 previous; services PMI 52.1 vs. 54.4 previous).

Initially, there was a spike higher in the euro at the release, but forex traders quickly took that as an opportunity to sell at higher levels as the move was faded fast. The euro is mostly down on the session against the majors with pressure still present going into U.S. trading:

EUR/USD is down 14 pips (-0.11%) to 1.2538, EUR/GBP is down 15 pips (-0.19%) to .7987, and EUR/JPY IS UP 16 pips (+0.11%) to 148.22

The British pound is slightly up on the session, partly thanks to all around improvements to the monthly retail sales data, as well as an improvement in the CBI industrial survey trends, giving a little support to the less dovish than expected BOE meeting minutes this week.  Sterling is choppy but on the move higher into the U.S. session:

GBP/USD is up 16 pips (+0.11%) to 1.5697, GBP/JPY is up 58 pips (+0.32%) to 185.55, GBP/CHF is up 31 pips (+0.21%) to 1.5037

The final move of note is the Japanese yen, taking a step back during London trade after hitting new lows and levels not seen since 2008 – 2009.  USD/JPY nearly broke 119.00 before pullback over the last few hours, possibly on a little bit of risk aversion, to retest 118.00 and currently holding above there.

The forex calendar for the Thursday afternoon London/morning U.S. session is mostly a  heavy dose of U.S. data that may likely bring action to the Greenback

At 1:30 pm GMT, we get our lone Canadian data point in the form of monthly wholesale sales (0.8% forecast vs. 0.2% previous), paired up with the weekly U.S. initial jobless claims data. Both aren’t huge market movers, but look out for potential moves in USD/CAD during this trading hour.

The forex calendar will round out the Thursday session starting at 2:45 pm GMT with U.S. flash manufacturing PMI data (56.3 forecast vs. 55.9 previous), and then at 3:00 pm GMT with U.S. data: the Philadelphia Fed Survey, leading indicator, flash consumer sentiment and existing home sales.  Combined, we’ll get a pretty broad view on the U.S. economy, but the data point that most currency traders will likely be watching is the Philly Fed survey for their take on manufacturing conditions in the Philadelphia Federal Reserve district. The forecast is for sentiment to dip lower to 18.5 vs. 20.7 previous, potentially helping the Greenback move lower since the London open. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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