London Session Forex Recap – Mar. 30, 2015

  • Swiss KOF Leading Indicator: 90.8 vs. 90.3 forecast/previous
  • U.K. Net Consumer Credit: £0.7B vs. £0.9B forecast, £0.8B previous
  • U.K. Mortgage Approvals: 61.8K avs. 61.5K forecast, 60.8K previous
  • European Economic Sentiment: 103.9 vs. 103 forecast, 102.1 previous
  • German CPI m/m (prelim): 0.5% vs. 0.4% forecast, 0.9% previous
  • German HICP m/m (prelim): 0.5% vs. 0.5% forecast, 1.0% previous

The U.S. dollar is one of the big movers on the session, back onto it’s longer-term rally without any one direct catalyst.  It could be a mix of weak commodities (sliding iron ore and oil prices weaken) and/or broad risk aversion on geopolitical concerns like Greece debt relief uncertainty.  Whatever the case may be, it’s been a relatively easy move higher to start the week for the Greenback against the majors:

USD/JPY is up 78 pips (+0.66%) to 119.89, USD/CHF is up 32 pips (+0.33%) to .9638, and NZD/USD is down 52 pips (-0.71%) to .7507

As mentioned earlier, we’re seeing weaker commodities prices on the session, most notably in the iron ore markets over in Asia.  Today’s slide in the Aussie is being attributed the move in iron ore as the commodity’s fall not only affects Australia’s mining sector, but also their biggest trading partner, China’s mining sector as well. With no exception, it’s all red for the Aussie on the session with strong selling momentum going into U.S. trade:

AUD/USD is down 90 pips (-1.17%) to .7654, AUD/JPY is down 46 pips (-0.50%) to 91.79, and AUD/NZD is down 36 pips (-0.36%) to 1.0190

And the Swiss franc is seeing a rare round of high volatility thanks to better-than-expected KOF leading indicators data, possibly signaling a potential bottom in this data point that has been falling since hitting 100.7 back in June 2014, especially after the SNB removal of the floor on EUR/CHF in January hurt their exporter’s competitiveness bigtime (KOF leading indicators dropped from 97.0 to 90.1 between January and February):

EUR/CHF is down 26 pips (-0.26%) to 1.0437, GBP/CHF is down 54 pips (-0.38%) to 1.4243, and CHF/JPY is up 60 pips (+0.49%) to 124.40

The forex calendar for the first afternoon London/morning U.S. session of the week is unusually busy, lined up with a full slate of economic data from both the U.S. and Canada.

We’ll get the bulk of this morning’s data at 12:30 pm GMT, including the U.S. personal income (0.3% forecast/previous) and spending (0.2% forecast vs. -0.2% previous), as well as the core PCE price index data (0.1% forecast/previous).  And from Canada, we’ll get monthly prices data on raw materials (4.5% forecast vs. -7.7%) and industrial products (0.9% forecast vs. -0.4% previous). These are mostly mid-tier data points, so we won’t likely see big moves, but a big surprise in the core PCE price index could be a market mover as it is the preferred measure of inflation.

At 2:00 pm GMT, we’ll get U.S. pending home sales for the latest read on the housing sector, forecasted to come in lower at 0.4% vs. 1.7% previous.  This is also a mid-tier event that won’t likely spark a big reaction without a big surprise, but it is one worth watching as the housing sector is an important component of the U.S.’s consumer driven economy and to see if this data point gives us the rare positive surprise.

See also:

Asia Session Recap

U.S. Session Recap

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