London Session Forex Recap – Feb. 23, 2015

  • German Ifo Expectations: 102.5 vs. 103 forecast, 102 previous
  • German Ifo Current Conditions: 111.3 vs. 112.5 forecast, 111.7 previous
  • German Ifo Business Climate: 106.8 vs. 107.7 forecast, 106.7 previous
  • U.K. CBI Distributive Trades: 1% bal vs. 35% bal forecast, 39% bal previous

The euro moved lower in the morning London forex trading session, likely on a mix of negative sentiment sparked by the weaker-than-expected German Ifo survey data and ongoing developments in the Greece financial lifeline story.  The Ifo data showed morale from German business leaders was downbeat on the current situation, but the outlook is up and at its highest levels since mid-2014.

But the market quickly turned its attention to Greece, who needs to submit their list of their reforms today to euro zone finance ministers in order to receive the four month extension agreed upon last Friday. More austerity reforms goes against Greek Prime Minister Alexis Tsipras recent promises to Greece during his recent campaign run, so there is a little bit of fear in the markets that Greece will be able to come up with enough that the rest of the euro zone would agree with.

We’ll have to wait and see if the euro zone accepts the list of reforms, as well as the reaction by the public in Greece to any new reforms that may or may not be agreed to, but overall the euro is lower from Asia session levels and momentum remains strong going into the U.S. session:

EUR/USD is down 75 pips (-0.31%) to 1.1302, EUR/JPY is down 78 pips (-0.58%) to 134.57, EUR/GBP is down 33 pips (-0.45%) to .7353

The British pound is mixed on the session, but mostly higher against the majors despite very weak survey data from the U.K.’s retail and wholesale companies conducted by the Confederation of British Industry. Overall, Sterling is higher on the session, continuing the bullish sentiment started in the Asia session, especially against the comdolls:

GBP/AUD is up 126 pips (+0.65%) to 1.9733, GBP/CAD is up 117 pips (+0.60%) to 1.9731, and GBP/USD is down 27 pips (-0.18%) to 1.5371

And finally, the New Zealand dollar is rallying hard into the U.S. trading session, likely on the bullish sentiment sparked by the positive credit card spending data (6.2% in Jan. vs. 4.5% previous), and possibly on rumors we’ll see an upgrade to this week’s Fonterra milk payout forecast this week.

NZD/USD is up 10 pips (+0.13%) to .7517, NZD/CAD is up 77 pips (+0.81%) to .9486, and AUD/NZD is down 44 pips (-0.42%) to 1.0350

The forex calendar for the Monday afternoon London/morning U.S. session is extremely light with only the U.S. existing home sales data at 1:30 pm GMT.  The forecast is for a slight tick lower to 4.95M homes from 5.04M homes previous. This is a mid-tier event and has been disappointing in the past couple of releases, but its likely we don’t see a reaction without a big surprise from the 5.00M range. Also, the market is likely to continue to focus on whether we’ll see the four month extension for Greece finalized by euro zone finance ministers. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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