U.S. Session Forex Recap – Oct. 15, 2014

  • German economic ministry downgrades 2014 and 2015 growth forecasts, sends German 10-year yields to fresh all-time low
  • Fitch places France’s AA+ rating on negative watch
  • US NFIB small business optimism at 95.3 in September vs. 95.8 expected
  • Sharp drop in oil prices weighs on CAD
  • Chinese inflation to print at 1.7%?

Forex traders might have calmed down after London session’s big moves, but that doesn’t mean we didn’t see interesting currency price action!

Only the NFIB small business optimism index was reported from Uncle Sam yesterday, so London session’s risk aversion moves dictated price action in the early U.S. session.

But the euro recovered slightly across the board after taking hits from a weak German ZEW report, Germany’s economic ministry downgrading its 2014 and 2015 GDP forecasts, and France’s AA+ credit rating being put on Fitch’s watchlist. EUR/USD inched 4 pips higher to 1.2655, EUR/GBP climbed 10 pips higher to .7958, and EUR/JPY jumped 22 pips to 135.43.

The bigger headliner was U.S. oil prices, which posted its biggest one-day drop in two years in response to news that the OPEC is unlikely to cut production despite lower demand forecasts. USD/CAD jumped by 53 pips to 1.1305, CAD/JPY fell by 32 pips to 94.67, and EUR/CAD flew by a whopping 81 pips to 1.4309 throughout the session.

Will the Aussie and Kiwi show similar volatility today? China is set to print its PPI and CPI numbers at 2:30 am GMT. Analysts are expecting a 1.7% uptick in consumer prices for the month of September, while PPI is expected to print a 1.6% decline.

Lower readings could mean disappointing consumer producer and consumer activity, which could affect China’s trading partners like Australia and New Zealand. Watch your newswires closely for updates on these reports, will ya?

See also:

London Session Recap

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