London Session Forex Recap – September 28, 2015

  • Italian Business Confidence: 104.2 actual v.s. 102.7 expected, 102.7 previous
  • Italian Consumer Confidence: 112.7 actual v.s. 108.7 expected, 109.3 previous

There wasn’t much on the docket for today’s London forex session, so currency traders turned to risk appetite, news reports, and the forex market’s inter-market relationships for direction.

Today was a downbeat day for European equities, with the DAX down by 1.36% to 9,556.80 and the FTSE 100 down by 1.40% to 6,023.50 during the forex session. Commodities were in the red during the forex session too, with Brent crude oil down by 1.73% to $47.76 per barrel during the forex session due to concerns over demand growth for oil products.

As a natural consequence, the comdolls began to feel some selling pressure from forex traders, with the Kiwi being the weakest of them all. There weren’t any catalysts that could help to explain the Kiwi’s weakness, but it’s possible that forex traders were able to read up on Forex Gump’s monthly economic round-up for New Zealand. Okay, okay, I’m only half joking.

It’s also possible that the Kiwi’s weakness was amplified by forex traders taking some delicious profits off the table after buying up the Kiwi during the Asian session as a probable reaction to the RBNZ’s somewhat optimistic outlook for New Zealand in their annual report. RBNZ Governor Graeme Wheeler also said in the aforementioned report that New Zealand’s economy “has performed much better than many advanced economies in recent years,” which partially offset his earlier warning that that “some further easing in the OCR seems likely.”

NZD/USD is down by 42 pips (-0.66%) to 0.6343, NZD/JPY is down by 58 pips (-0.76%) to 76.19, NZD/CAD is down by 31 pips (-0.37%) to 0.8482

AUD/USD is down by 33 pips (-0.48%) to 0.6989, AUD/JPY is down by 53 pips (-0.63%) to 83.94, AUD/NZD is up by 19 pips (+0.18%) to 1.1016

USD/CAD is up by 33 pips (+0.25%) to 1.3366, CAD/JPY is down by 33 pips (-0.37%) to 89.85, CAD/CHF is down by 19 pips (-0.27%) to 0.7328

As for the high-yielding pound, it was mostly in the green, but it was about flat against the safe-havens even though there weren’t any direct catalysts. Some analysts pointed to a rather optimistic report from Ernst & Young, which claimed that business investment in the U.K. is climbing and that the U.K. economy will continue to strengthen even though the IMF warned of a global slowdown. Some analysts, meanwhile, pointed to speculation of an imminent takeover of Britain’s SAB Miller by Anheuser-Busch InBev since the latter would need a LOT of pound sterlings to even attempt a takeover of the former.

GBP/USD is up by 3 pips (+0.02%) to 1.5189, GBP/NZD is up by 152 pips (+0.65%) to 2.3930, GBP/AUD is up by 112 pips (+0.52%) to 2.1733

As for the euro, well, it was being led around by opposing currency price action, so it won out against the comdolls while remaining flat or edging lower against the safe-havens. Still, the euro was really putting up a fight against the safe-havens, probably because of the positive Italian data, which were the only economic reports released during the forex session.

EUR/USD is up by 4 pips (+0.04%) to 1.1172, EUR/JPY is down by 20 pips (-0.15%) to 134.12, EUR/NZD is up by 119 pips (+0.63%) to 1.7607

The forex calendar for the upcoming afternoon London/morning U.S. session has some mid-tier items and a couple of central bank speakers lined up, so get ready.

Federal Reserve Bank of New York President William Dudley will be interviewed by the Wall Street Journal with regard to interest-rate increases and inflation expectations at 1:30 pm GMT. Given the interview topic, I don’t think I have to emphasize to you guys that this could potentially be a market-move, right?

Also at 1:30 pm GMT, we’ll get the readings for the U.S. core PCE price index (0.1% expected, 0.1% previous), U.S. personal spending (0.3% expected, 0.3% previous), and U.S. personal income (0.4% expected, 0.4% previous).  Do note that the readings for all consumer indicators are expected to increase at the same rate as their respective previous readings, so an actual reading which deviates from the market’s expectations may cause the Greenback to react.

Next, at 3:00 pm GMT, forex traders will get the reading for U.S. pending home sales (0.4% expected, 0.5% previous). Do note that the reading is expected to deteriorate, so the Greenback may see some weakness if the actual reading is within expectations or worse.

Finally, at 6:30 pm GMT, we’ll get another central banker speaker in the person of Federal Reserve Bank of Chicago President Charles Evans, who has a speech in Milwaukee. You know the drill, guys. Keep an ear out for any major updates or shifts on sentiment, although there’s also a chance that the market will not react given the topic of Fed Dudley’s earlier interview. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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