London Session Forex Recap – August 14, 2015

  • French Prelim Q2 GDP q/q: 0.0% actual v.s. 0.2% expected, 0.7% previous
  • German Prelim Q2 GDP q/q: 0.4% actual v.s. 0.5% expected, 0.3% previous
  • Euro Zone Prelim Q2 GDP q/q: 0.3% actual v.s. 0.4% expected, 0.4% previous
  • Euro Zone Headline HICP y/y: same as previous at 0.2% as expected
  • Euro Zone Core HICP y/y: same as previous at 1.0% as expected
  • U.K. Construction Output m/m: 0.9% actual v.s. 2.0% expected, -1.0% previous
  • Canadian manufacturing sales coming up
  • U.S. headline and core PPI on tap

Today’s morning London forex session was relatively subdued ahead of top-tier Canadian and U.S. data for later. But as always, there were a few currencies that just couldn’t resist being under the spotlight.

The first attention-getter was the euro, which started the forex session by taking a dive shortly after the preliminary estimates for French and German Q2 GDP were released, probably because they both failed to meet the market’s expectations. The euro bears didn’t have time to celebrate, however, as reports came out that the Greek parliament finally approved the bailout deal. And as these reports began to circulate among forex traders, euro bulls also began to launch a counter-offensive, allowing most euro pairs to take back some of their losses (and then some).

EUR/USD is up by 11 pips (+0.10%) to 1.1173 with 1.1123 as session low, EUR/CAD is up by 26 pips (+0.18%) to 1.4602 with 1.4530 as session low, EUR/AUD is up by 12 pips (+0.08%) to 1.5123 with 1.5067 as session low

Surprisingly enough, Kiwi pairs were mostly up during the forex session despite worse-than-expected readings for Q2 retail sales data from earlier. Since today’s a Friday, and given that most Kiwi pairs were down for the week, it’s therefore probably safe to assume that forex traders who have been shorting the Kiwi for most of the week were just covering their positions in order to avoid weekend risk.

NZD/USD is up by 16 pips (+0.25%) to 0.6562, NZD/CHF is up by 10 pips (+0.15%) to 0.6391, NZD/CAD is up by 21 pips (+0.27%) to 0.8569

The Greenback was a head-turner too since it was weak for most of the forex session. There were no catalysts during the forex session, other than Gold prices rising by 0.25% to $1,118.40 per troy ounce, so it’s possibly just pre-emptive positioning ahead of U.S. economic data later.

USD/CAD is down by 20 pips (-0.16%) to 1.3037, USD/JPY is down by 19 pips (-0.15%) to 124.11, USD/CHF is down by 18 pips (-0.19%) to 0.9732

Speaking of economic data, the forex calendar for the upcoming afternoon London/morning U.S. session has some top-tier and mid-tier data on tap, so get your game face on.

We’ll start the session hard at 1:30 pm GMT, with the release of U.S. headline (0.1% expected 0.4% previous) and core (0.1% expected, 0.3% previous) PPI readings as well as the reading for Canada’s manufacturing sales (2.7% expected, 0.1% previous). These are all heavy-hitters, so watch out. And do note that both U.S. PPI readings are expected to deteriorate while Canada’s manufacturing sales data is expected to print an increase.

Next, at 2:15 pm GMT, forex traders will get the the readings for U.S. capacity utilization (78.0% expected, 77.8% previous) and U.S. industrial production (0.3% expected, 0.2% previous). Both production indicators are expected to increase a bit, so expect some demand for the Greenback if the actual readings manage to meet or beat expectations.

Finally, at 3:00 pm GMT, we’ll get the preliminary readings for the University of Michigan’s consumer surveys for the month of August, with readings for consumer expectations (84.0 actual v.s. 84.1 previous), consumer sentiment (93.5 expected, 93.1 previous), and current conditions (107.0 expected, 107.2 previous) on tap. I just want to point out that forex traders usually have their sights on the reading for consumer sentiment, and it is expected to tick higher, so we may see some Greenback strength if the actual reading comes in as expected or better. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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