London Session Forex Recap – August 10, 2015

  • French BoF Business Sentiment: unchanged at 98.0 v.s. 99.0 expected
  • Euro Zone Sentix Investor Confidence: unchanged at 18.5 v.s. 20.3 expected

Whereas last Friday’s morning London forex session saw little movement despite a ton of data, today’s morning London forex session was the complete opposite, with most currencies on the move despite an almost empty forex calendar. Lemme give y’all a rundown of the most noteworthy movers.

First up are the Kiwi and the Aussie. Both currencies were losing out big time to their forex rivals, and since there weren’t really any direct catalysts that could explain the severe weakness of the two commodity currencies, it’s therefore very likely that European forex traders were pricing-in the events over the weekend. Specifically, European forex traders were probably none too happy with how China’s trade balance turned out (43.0B actual v.s. 53.4B expected, 46.5B previous) due to a strong yuan and lower overseas demand, which means less Chinese demand for commodity exports from Australia and New Zealand .

European forex traders were also probably none too happy with China’s poor PPI reading for July (-5.4% actual v.s. -5.0% expected, -4.8% previous). Digging around in the report, producer prices for ferrous metal manufacturers and processors decline by 3% m/m and a whopping 18.3% y/y, which is bad news for both Australia and New Zealand, but espcially for Australia. New Zealand also got another stinger because producer prices for non-ferrous metal manufacturers and processors declined by 1.9% m/m and 8.5% y/y, which means lower prices (and lower demand) for New Zealand’s aluminum exports.

NZD/USD is down by 35 pips (-0.56%) to 0.6560, NZD/JPY is down by 28 pips (-0.34%) to 81.84

AUD/USD is down by 32 pips (-0.44%) to 0.7357, AUD/JPY is down by 19 pips (-0.21%) to 91.77

Not all the comdolls were feeling the pain, though, since the Loonie was doing rather well during the forex session, especially against the other comdolls. The only catalyst for Loonie strength during the forex session was Brent crude oil climbing by +0.72% $49.59 per barrel, although it’s also possible that forex traders were pricing-in last Friday’s surprisingly good reading for Canada’s building permits (14.8% actual v.s. 5.1% expected, -13.9% previous).

USD/CAD is down by 15 pips (-0.12%) to 1.3136, NZD/CAD is down by 40 pips (-0.46%) to 0.8634, AUD/CAD is down by 37 pips (-0.38%) to 0.9681

The euro was on the move too, but with the French BoF business sentiment and the Sentix investor confidence index both coming in unchanged versus the previous reading, and Greece and its creditors finally about to seal a new bailout deal, it seems like the euro was being kicked around by counter-currency price action.

EUR/USD is down by 30 pips (-0.28%) to 1.0931, EUR/CAD is down by 30 pips (-0.21%) to 1.4386, EUR/NZD is up by 47 pips (+0.29%) to 1.6661

Speaking of counter-currency price action, the mighty Greenback got in on the action too. There weren’t any major news or economic data released during the forex session, so aside from counter-currency price action, it’s also quite possible that European forex traders were pricing-in last Friday’s jobs data. After all, the U.S. jobs report states that average hourly earnings went up by 0.2% while the jobless rate remained steady at 5.3%. And the NFP reading coming in at 215K is apparently not enough to dissuade the Fed from hiking rates within the year.

USD/CHF is up by 43 pips (+0.33%) to 0.9848, USD/JPY is up by 28 pips (+0.23%) to 124.73

Looks like the forex calendar for the upcoming afternoon London/morning U.S. session is a bit on the light side.

Up first at, 2:00 pm GMT, we’ll have a central banker speaker in the person of Federal Reserve Bank of Atlanta President Dennis Lockhart, who has a speech at the Federal Reserve Bank of Atlanta’s conference. Make sure to keep an ear out for any juicy updates on economic outlook and/or monetary policy, okay?

Next, at 3:00 pm GMT, forex traders will get U.S. labor market conditions index (0.8 previous). It’s rarely a market mover, though, since it’s a composite based on jobs data that have already been released previously.

And it looks like Federal Reserve Bank of Atlanta President Dennis Lockhart has a busy schedule today since he is scheduled to give another speech at the Atlanta Press Club Newsmaker Luncheon at around 5:25 pm GMT, so keep an ear out for that one as well.

Finally, we have an item lined up way late into the U.S. session. At 11:45 pm GMT, the reading for New Zealand’s retail card spending (0.5% expected, 0.5% previous) will be released and it’s expected to print the same level of growth as the previous reading, so perhaps Kiwi traders will use that as an opportunity to load up since it means that consumer spending is probably going steady. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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