London Session Forex Recap – Dec. 8, 2014

  • German Industrial Production m/m: 0.2% vs. 0.3% forecast, 1.1% previous; y/y ticks up to 0.8% vs. 0.7% forecast, 0.1% previous
  • Swiss CPI m/m inline with 0.0% forecast/previous
  • Swiss Retail Sales y/y: 0.3% vs. 0.5% previous
  • European Sentix Indicator: -2.5 vs. -9 forecast, -11.9 previous

The forex market was lively with little in terms of news catalysts in the morning London session. Sterling made a strong push higher while broad euro weakness continues on ECB comments.

Euro weakness came after European Central Bank member Ewald Nowotny made comments that they see a “massive weakening in the euro zone economy” in a conference in Frankfurt, and that the target for the ECB’s balance should grow to the 2012 crisis levels. The euro bounced higher on the week open, but is now looking to enter the red against all the majors.  EUR/USD hit an intraday high at 1.2300 before sellers jumped in to bring the pair down the 1.2250 area and EUR/JPY hit highs around 149.75 before being taken all the way down to current levels around 148.35.

After a slow start and a little bit of weakness in the Asia session, forex traders bought Sterling right from the London session open, and it was strong momentum to the upside throughout the morning; there was no major direct catalyst to explain the move higher.  After dipping as low as the 1.5540 handle, GBP/USD bounced as high as 1.5630 and the British pound gained against the euro with EUR/GBP down from 50 pips from its Asia session high of .7900 to currently trade around .7850.

The forex calendar for the Monday afternoon London/morning U.S. session is light with a couple of potential market movers from Canada.

At 1:15 pm GMT, we got the Canadian housing starts data (196K vs. 195K forecast, 183.6K previous) and at 1:30 pm GMT we got the Canadian building permits number (0.7% vs. 3.9% forecast, 12.7% previous).  Both are mid-tier events, so the initial reaction has been understandably muted, but it’s still early so we may see some directional bias in the Loonie as the data is digested through the morning.

With not much else on the schedule, look for the equity markets for sentiment cues to drive currency bias. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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