London Session Forex Recap – September 14, 2015

  • Swiss PPI m/m: -0.7% actual v.s. -0.4% expected, -0.3% previous
  • Swiss Retail Sales y/y: -0.1% actual v.s. 1.5% expected, -1.2% previous
  • Euro Zone Industrial Production m/m: 0.6% actual v.s. 0.3% expected, -0.3% previous
  • Euro Zone Industrial Production y/y: 1.9% actual v.s. 0.7% expected, 1.5% previous

Despite a rather sparse forex calendar, today’s morning London forex session saw enough volatility and directional movement to keep the forex session interesting.

One of the main movers during the forex session was the Aussie since all Aussie pairs were relentlessly taking ground from their forex rivals for most of the forex session, even though there weren’t really any direct catalysts that could account for the Aussie’s strength.

Some analysts attributed it to upside risks for the Aussie due to bets that the U.S. Federal Reserve will be delaying a highly-anticipated rate hike, but I don’t buy it since it doesn’t really explain fact that the Aussie was strong across the board, and not just against the Greenback. And besides, the U.S. dollar was actually in the up and up during the forex session, although the Greenback’s directional movement wasn’t as clear-cut as the Aussie’s.

USD/CHF is up by 35 pips (+0.36%) to 0.9708, USD/CAD is up by 26 pips (+0.20%) to 1.3259, USD/JPY is up by 12 pips (+0.10%) to 120.39

Going back to the Aussie, other analysts pointed to an “over-shoot” in Aussie depreciation brought about by the Chinese equities market meltdown, which has been dragging the Aussie down. Australia and New Zealand Banking group currency strategist Daniel Been, for example, estimates that the Aussie’s fair value should be around US72¢.

Of course, it could just be Aussie shorts unwinding their positions or Aussie bulls loading up as a pre-emptive move ahead of the RBA’s meeting minutes tomorrow.

AUD/USD is up by 39 pips (+0.55%) to 0.7125, AUD/JPY is up by 49 pips (+0.58%) to 85.73, AUD/CAD is up by 64 pips (+0.68%) to 0.9442

The other currencies that were on the move during the forex session were the euro and the pound, which were both mostly down for the session. Both currencies were probably victims of dampened demand due to risk aversion slowly creeping back into the European equities market, with the FTSE 100 down by 0.10% to 6,112.50 and the DAX down by 0.19% to 10,104.00 during the forex session. I guess not even the upbeat readings for industrial production in the euro zone was enough to muster enough buyers to keep the euro supported.

EUR/USD is down by 42 pips (-0.37%) to 1.1321, EUR/AUD is down by 146 pips (-0.92%) to 1.5883, EUR/JPY is down by 46 pips (-0.35%) to 136.20

GBP/USD is down by 41 pips (-0.27%) to 1.5408, GBP/AUD is down by 148 pips (-0.68%) to 2.1650, GBP/CAD is down by 15 pips (-0.07%) to 2.0431

The forex calendar for the upcoming afternoon London/morning U.S. session has nothing lined-up, so perhaps volatility may dry up. But do keep on your toes, though, since forex traders may look to commodities and equities price action, as well as market sentiment for direction. And with all the central bank events lined-up for the week, why not get up to speed on what the major central banks have been up to? Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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