London Session Forex Recap – September 8, 2015

  • Swiss Jobless Rate: unchanged at 3.3% as expected
  • German Current Account: 23.4 actual v.s. 21.5 expected, 24.4 previous
  • German Trade Balance: €22.8B actual v.s. €23.5B expected, €22.1B previous
  • French Trade Balance: -€3.3B actul v.s. -€3.1B expected, -€2.8B previous
  • Euro Zone Revised Q2 GDP q/q: 0.4% actual v.s. 0.3% expected, 0.3% previous
  • Euro Zone Revised Q2 GDP y/y: 1.5% actual v.s. 1.2% expected, 1.2% previous
  • U.S. NFIB Small Business Optimism: 95.9 actual v.s. 96.0 expected, 95.4 previous

The risk-on sentiment from the earlier Asian forex session refused to go away, resulting in another lopsided battle between the safe-havens and high-yielders during today’s morning London forex session. Let me give y’all a brief rundown.

As usual, the prevailing risk appetite convinced forex traders to load up on the high-yielders at the expense of the safe-haven currencies. And among the high-yielders, the Loonie was the strongest currency of them all, probably because of a surge in oil prices, with Brent crude oil up by 2.26% to $48.71 per barrel during the forex session.

USD/CAD is down by 40 pips (-0.31%) to 1.3232, EUR/CAD is down by 92 pips (-0.62%) to 1.4771, AUD/CAD is down by 17 pips (-0.19%) to 0.9237

As for the other high-yielding currencies, the pound and the Aussie got some love too. The Kiwi, meanwhile, was mostly down despite an earlier report that New Zealand’s manufacturing sales grew by 0.4% (-2.6% previous).

GBP/USD is up by 44 pips (+0.30%) to 1.5401, GBP/JPY is up by 72 pips (+0.39%) to 184.76

AUD/USD is up by 9 pips (+0.14%) to 0.6982, AUD/CHF is up by 49 pips (+0.73%) to 0.6830

NZD/USD is down by 8 pips (-0.14%) to 0.6283, NZD/CAD is down by 37 pips (-0.44%) to 0.8316

Among the safe-havens, the Swissy was the weakest currency yet again. The only catalyst during the forex session was Switzerland’s jobless rate remaining steady, but that’s a good thing. Maybe it’s safe to assume that the Swiss National Bank is taking advantage of the risk-on sentiment to weaken the Swissy again?

USD/CHF is up by 57 pips (+0.59%) to 0.9784, CAD/CHF is up by 66 pips (+0.91%) to 0.7391, GBP/CHF is up by 135 pips (+0.91%) to 1.5068

As for the euro, it was mostly weak during the forex session even though the euro zone got a slew of mostly positive data and the DAX was up by 2.22% to 10,333.50 during the forex session. The euro did climb higher during the Asian session, so it’s possible that forex traders who had pre-emptive positions decided to take some profits off the table when the reports came out, but the euro’s weakness was so intense that I don’t think that’s the main reason. There were  some analysts who attributed the euro’s weakness solely to the prevailing risk-on sentiment since it seems like forex traders have been using the euro as a sort of safe-haven lately. I guess that sounds plausible.

EUR/USD is down by 43 pips (-0.38%) to 1.1155, EUR/JPY is down by 34 pips (-0.26%) to 133.85, EUR/AUD is down by 76 pips (-0.47%) to 1.5984

The forex calendar for the upcoming afternoon London/morning U.S. session is a bit sparse since we only have a couple of low-tier items on tap.

Up first, at 3:00 pm GMT, we’ll get the reading for the U.S. labor market conditions index (1.1 pevious). Do note that this is a composite of previously released labor market data, so it usually doesn’t move the market much. But it is released by the Federal Reserve and it’s the only data point up for release at this time, so some forex traders may be paying attention.

After that, at 8:00 pm GMT, we’ll have the reading for U.S. consumer credit ($18.6B expected, $20.7B previous). This is a leading indicator for consumer spending, and it is expected to shrink, so keep an eye on this data point and the Greenback, alright? Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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