London Session Forex Recap – Feb. 10, 2015

  • French Industrial Production y/y: -0.1% vs. -1.2% forecast, -2.8% previous
  • Swiss CPI m/m: -0.4% vs. -0.6% forecast, -0.5% previous; y/y at -0.5% vs. -0.6% forecast, -0.3% previous
  • U.K. Manufacturing Production m/m: 0.1% vs. -0.1% forecast, 0.8% previous; y/y at 2.4% vs. 2.0% forecast, 3.0% previous
  • U.K. Industrial Production m/m: -0.2% vs. -0.1% forecast/previous; y/y inline with 0.5% forecast, below 1.1% previous

Whether it’s hints of a compromise between the EU and Greece or a Plan B for Greece if they can’t get funding from the EU, currency volatility picked up in the London trading session in a mostly sideways, choppy behavior. Initially, there was a bearish move right from the London open for the Europe, but the sentiment quickly reversed on speculation that both sides of the Greek bailout debate were moving closer to agreement this not more than an hour ago.

After dropping to session lows around 1.1275, EUR/USD spiked higher on hints of a deal to 1.1330, but was quickly faded lower to below 1.1300–choppy price action indeed. The euro seems to be falling back into the red across the board, and until an actual deal is made, choppiness may continue for the shared currency:

EUR/USD is down 39 pips (-0.35%) to 1.1283, EUR/GBP is down 28 pips (-0.38%) to .7410, and EUR/NZD is down 13 pips (-0.09%) to 1.5263

The British pound is up on the upswing, likely on the better-than-expected manufacturing and ignoring the weaker-than-expected industrial production numbers.

GBP/USD is up 11 pips (+0.08%) to 1.5226, GBP/JPY is up 88 pips (+0.49%) to 181.37, and GBP/CHF is up 49 pips (+0.35%) to 1.4097

Elsewhere, we continue to see weakness in the Australian dollar, sparked by weak Chinese inflation data during the Asia session (China CPI 0.8% vs. 1.5% in Jan.), and the Japanese yen is seeing volatility with bias to the upside, likely on the possibility for a Greek-EU agreement and mostly positive economic reads from the European region this morning:

AUD/USD is down 2o pips (-0.26%) to .7780, AUD/JPY is up 16 pips (+0.18%) to 92.69, and USD/JPY is up 51 pips (+0.43%) to 119.13

The forex calendar for the Tuesday afternoon London/morning U.S. session is light with few mid-tier economic data releases to a potentially add to this morning’s choppy volatility.

At 3:00 pm GMT, we’ll get the IBD consumer optimism (51.9 forecast vs. 51.5 previous) and wholesale inventories data (0.2% forecast vs. 0.8% previous) from the U.S., and from the U.K., we’ll see the NIESR GDP estimate for the previous three months (0.6% previous).  These aren’t know to be market movers, but events we should be aware of in case there is an outsized surprise relative to forecasted and/or previous reads.

If we don’t see be surprises from the the U.S. economic reads, then forex traders will likely continue to focus on the fluid developments in Greece, as well as increased risk of a global economic slowdown as indicated by falling inflation in China. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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