London Session Forex Recap – Dec. 11, 2014

  • German CPI m/m (Final) inline with 0.0% forecast/previous
  • French CPI m/m: -0.2% vs. -0.1% forecast, 0.0% previous
  • Swiss National Bank holds rate target in 0.00% – 0.25% range

The Swiss National Bank (SNB) shakes up the franc with its monetary policy decision during an active morning London session in the forex markets.  They leave the 3-month libor target rate unchanged as expected, and forecasts growth to slow through the end of 2014. The 1.2000 cap on EUR/CHF remains unchanged, although we didn’t get confirmation on whether or not the SNB did intervene on the latest retest.

With no changes to policy or confirmation of intervention, the Swiss franc strengthened on the session, although the rally seems to be limited at the moment. Overall, the franc is up against most of the majors on the session,  including the closely watched EUR/CHF pair:

EUR/CHF is down 16 pips (-0.13%) to 1.2011, GBP/CHF is down 30 pips (-0.21%) to 1.5150, and USD/CHF is unchanged on the session at .9660

Forex volatility has been active across all pairs, and mostly choppy, but the other currency move of note is in the Australia dollar, lower on the session despite showing positive employment data during the Asia session.  Then we saw a sudden spike lower in the Aussie just a few minutes ago, apparently on comments from RBA Governor Stevens that the Australian dollar should be closer to .7500.  The spike lower was quickly faded, but we may continue to see pressure on the Aussie through U.S. trade:

AUD/USD is down 56 pips (-0.68%) to .8259, AUD/JPY is down 9 pips (-0.09%) to 97.89, and AUD/NZD is down 77 pips (-0.73%) to 1.0563

The forex calendar for the Thursday afternoon London/morning U.S. session has a healthy mix of Canadian and U.S. data to hopefully keep the morning action going.

At 1:30 pm GMT, we’ll get the bulk of the session data including capacity utilization and house price index data from Canada, and from the U.S. we’ll get import price index, business inventories, weekly jobless claims, and retail sales data.  The potential market mover of the bunch is the U.S. retail sales data, with the headline number forecasted to tick higher to 0.4% vs. 0.3%, and the core number forecasted to tick lower to 0.1% vs. 0.3% previous. The general trend has been positive for this number, which could be the case for the latest read as the U.S. heads into the holiday season.

And at 3:00 pm GMT, we’ll get U.S. business inventories data, which is forecasted to tick slightly lower to 0.2% from 0.3%.  This is a mid-tier data point which is likely to not garner much attention unless we see a huge surprise. With so much going on–from oil crashing, political troubles in Greece, and central banks making moves–it looks like another session of uncertainty may be in the cards for U.S. session forex traders. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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