London Session Forex Recap – Dec. 10, 2014

  • French Industrial Production m/m: -0.8% vs. 0.2% forecast, 0.0% previous
  • French Manufacturing Production m/m: -0.2% vs. 0.0% forecast, 0.3% previous
  • U.K. Trade Balance: -9.62B GBP vs. -9.5B GBP forecast, -10.51B GBP previous

The forex calendar was light for the morning London session, but we did see a slight pick up in volatility after the U.K. trade balance data was released.  And while it did come in below expectations, it did improve over the previous month’s number; the mix could be a reason why we saw a choppy initial reaction.  After initial selling pressure, it was only an hour or so before currency traders began buying back Sterling.  Overall, the British pound is mixed on the session:

GBP/USD is up 23 pips (+0.15%) to 1.5686, GBP/CHF is up 8 pips (+0.05%) to 1.5222, and EUR/GBP is up 3 pips (+0.3%) to .7896

Overall, volatility has been light and the drivers for currencies continue to be the recent return to safe havens on fears of a slow down in China, boosting low-yielding currencies like the Japanese yen:

USD/JPY is down 76 pips (-0.64%) to 118.90, EUR/JPY is down 75 pips (-0.51%) to 147.34, and GBP/JPY is down 95 pips (-0.51%) to 186.50

The forex calendar for the Wednesday afternoon London/morning U.S. session is barren with only the U.S. Federal Budget Balance data (-$65B forecast v.s -$135B previous) in the lineup.  This is due for release at 7:00 pm GMT, but since this is a low to mid tier event, don’t expect much volatility or reaction from forex traders without a huge surprise.

But we do have a top tier event right around when the U.S. session wraps up and the Asia session opens up: the Reserve Bank of New Zealand monetary policy statement.  This event comes out at 8:00 pm GMT with an expectation that the RBNZ will hold rates at 3.50% and continue the rhetoric that they will remain in a “period of assessment for now. This should bring in a nice spike in volatility for the Kiwi that has been under pressure as of late. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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