London Session Forex Recap – Mar. 12, 2015

  • German CPI (Final): inline with 0.9% forecast/previous
  • German HICP (Final): inline with 1.0% forecast/previous
  • French HICP: 0.7% vs. 0.6% forecast, -1.1% previous
  • U.K. Trade Balance: -£8.41B vs. -£9.65B forecast, -£9.93B previous
  • European Industrial Production: -0.1% vs. 0.2% forecast, 0.3% previous

Positive Asia session data continued to lift the comdolls through the morning London session, and the euro is bouncing higher in a busy morning of forex trade.

After being beaten down all week thanks to a mix of ECB quantitative easing and Greek fears, the euro is finally finding some buyers on the session.  Without any major European data that I can see to lift the market higher and mixed results from the European data we did get, it’s likely the bounce in most euro pairs that we’re seeing is a bit of profit taking and rest from the recent sell off.

EUR/USD is up 88 pips (+0.84%) to 1.0633, EUR/JPY is up 65 pips (+0.51%) to 128.69, and EUR/GBP is up 34 pips (+0.49%) to .7096

Price action in the British pound was mixed after printing another deficit, but narrowing than expectations and the previous read.  Sterling is able to stay in the green against the Greenback and yen, but taking hits against the rest of the majors, especially the comdolls:

GBP/AUD is down 174 pips (-0.88%) to 1.9476, GBP/CAD is down 52 pips (-0.27%) to 1.8976, and GBP/NZD is down 178 pips (-0.89%) to 2.0248

And again, comdoll sentiment remained in the positive during European trade thanks to the positive Australian jobs data and the unexpected bullish comments from the Reserve Bank of New Zealand during their latest monetary policy statement:

AUD/USD is up 97 pips (+1.28%) to .7689, NZD/USD is up 104 pips (+1.43%) to .7395, and USD/CAD is down 70 pips (-0.55%) to 1.2676

The forex calendar for the Thursday afternoon London/morning U.S. session is heavier today with quite a few events from both the U.S. and Canada to potentially keep the strong volatility in the Greenback and Loonie going.

At 12:30 pm GMT, we’ll get a bulk of the economic reports including retail sales, import price index, and initial jobless claims from the U.S., as well as capacity utilization and the house price index from Canada.  With such a wide variety of economic sectors releasing data, it’ll be tough pick out likely behavioral scenarios, but the focus will likely be on the U.S retail sales report with the headline forecast at 0.3% gain vs. the -0.8% previous. The core U.S. retail sales number is forecasted to come in at 0.5% vs. -0.9%, and if both do beat previous reads, that slight Dollar decline today may be quick to reverse.

To close out the Thursday forex calendar, we’ll get the U.S. business inventories data (0.1% forecast/previous) at 2:00 pm GMT, and the U.S. Federal Budget Balance data (-$191B forecast vs. -$17.5B previous) at 6:00 pm GMT.  Both are mid-tier events but not known to be market movers, so unless we get a big surprise, it’s likely the currency markets will continue to trade off of the U.S. data from earlier and the current European and Asia themes that dominated earlier.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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