London Session Forex Recap – Feb. 3, 2015

  • Swiss Trade Balance: 1.52B CHF vs. 2.1B CHF forecast, 3.8B CHF
  • U.K. Construction PMI: 59.1 vs. 57 forecast, 57.6
  • European PPI m/m: -1.0% vs. -0.7% forecast, -0.3% previous

The British pound was on the move higher thanks to a better than expected read from the construction PMI data.  This breaks three straight months of lower-than-expected releases, but still at the low end of the data range over the last year. Sterling is broadly higher on the session, but looks to be slowing going into the U.S. session:

GBP/USD is up 53 pips (+0.36%) to 1.5091, GBP/JPY is up 44 pips (+0.26%) to 177.09, and GBP/AUD is up a monster 368 pips (+1.91%) to 1.9641

The Australian dollar is bouncing back from it’s steep drop after the Reserve Bank of Australia unexpectedly cuts the main interest rate to 2.25% from 2.50%. AUD/USD hit lows around .7625 before finding a bottom and it looks like there’s more to give as the pair heads higher, currently trading around .7686 to bring the pair down 115 pips (-1.48%) on the session. The AUD/JPY is down only 139 pips (-1.52%) to 90.25 after being down as low as 89.40 in the early morning London session.

And the Canadian dollar is also one of the big movers, up with the surge in oil over the past few trading sessions but giving back a little bit of its gains going into U.S. trade. USD/CAD hit lows around 1.2530 before bouncing higher to current levels around 1.2575, which looks like it just may be a small pullback before Loonie buyers potential pile back in to continue to make it one of the big winners on the session.

The forex calendar for the Tuesday afternoon London/morning U.S. session has data from both the U.S. and Canada to hopefully keep the volatility going.

At 1:30 pm GMT, we’ll inflation data from Canada in the form of the raw materials price index (-9% forecast vs. -5.8% previous) and industrial product price index (-0.6% forecast vs. -0.4% previous).  These can be a leading indicator of future consumer prices as manufacturing costs tend to be passed on to the end consumer. Both are low-to-mid tier data points, so if we get a big surprise and reaction, it may be a short lived one in the Canadian dollar.

At 3:00 pm GMT, we’ll get a couple of fresh reads on the U.S. economy in the form of the monthly factory orders data (-2.4% forecast vs. -0.7% previous) and the IBD consumer optimism survey data (51.5 forecast vs. 51.5 previous). Both are mid-tier events, but not likely to cause much action in the Greenback without a very big surprise.

Finally, expect comdoll activity to pick up once again right after the Tuesday U.S. session close with the New Zealand quarterly employment sector update.  The forecast is for the unemployment rate to tick lower to 5.3% from 5.4%, and the employment growth number to remain at the previous read of 0.8%.  Volatility for the Kiwi can move pretty fast on this one is it’s a good idea to keep an eye out for those open orders and trades during this release. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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  • Pipwisher

    Dear Pipnoculars,
    What happened to USDOLLAR index today? Why did it fall so much that against the expectations of most of the analists?

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