London Session Forex Recap – Mar. 18, 2015

  • U.K. ILO Unemployment Rate: 5.7% vs. 5.6% forecast, 5.7% previous
  • U.K. Claimant count Rate: 2.4% vs. 2.4% forecast, 2.5% previous
  • U.K. Claimant Count Change: -31K vs. -30K forecast, -38.6K previous
  • Swiss Credit Suisse ZEW Survey: -37.9 vs. -73 previous
  • Bank of England meeting minutes: 9 – 0 vote to hold monetary policy as-is

The British pound took it to the chin this morning on weaker-than-expected unemployment data, and it looks like traders were focusing on the slower than expected wage growth (1.8% vs. 2.2% forecast, 2.1% previous) and the unemployment rate remaining at 5.7%. Sterling is down across the board in the morning London session with momentum still in favor of the bulls:

GBP/USD is down 105 pips (-0.71%) to 1.4641, GBP/JPY is down 159 pips (-0.90%) to 177.39, EUR/GBP is up 59 pips (+0.83%) to .7242

The Swiss franc is the other big mover on the session, likely making gains on the improving Credit Suisse ZEW economic sentiment report.  With sentiment improving in Europe, it’s also bring good vibes to Switzerland, which could also be benefiting from the crazy SNB induced spike back in January.  Franc bulls seem to still be in control going into the U.S. trading session:

USD/CHF is down 25 pips (-0.25%) to 1.0030, EUR/CHF is down 22 pips (-0.21%) to 1.0638, and because of today’s weak unemployment data, GBP/CHF is the big loser on the day, down 140 pips (-0.95%) to 1.4688

The forex calendar for the Wednesday afternoon London/morning U.S. session is likely to be a snoozer with only the Canadian Wholesale Sales number (-0.8% forecast vs. 2.5% previous) at 12:30 pm GMT.  It’s not only a potential non-catalyst because of its low tier status, but because we do have the highly anticipated FOMC statement at 6:00 pm GMT. Forex traders will likely sit on their hand until the big event as no one wants to take on significant positions ahead of a potentially monumental shift in U.S. monetary policy.

Finally, almost right after the U.S. session close, we will get the New Zealand quarterly GDP report with a forecast of 0.8% vs. 1.0% previous.  This number surprised to the upside in the past two quarters, and with positive surprises to recent data (retail card spending, house price index, and manufacturing activity) we could see another positive surprise.  If so, the recent drop in Kiwi on the disappointing Global Dairy Trade numbers could see a little bit of give back.  Whatever the outcome may be, this is a likely gonna spark another short-term spike in volatility for Kiwi pairs.  Get ready and stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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