London Session Forex Recap – Apr. 28, 2015

  • French INSEE Consumer Confidence: 94 vs. 94 forecast, 93 previous
  • U.K. BBA Mortgage Approvals 38.75K vs. 37.8K forecast, 37.31K previous
  • U.K. GDP q/q: 0.3% vs. 0.5% forecast, 0.6% previous; y/y at 2.4% vs. 2.6% forecast, 3.0% previous
  • U.K. Index of Services q/q: 0.7% vs. 0.5% forecast, 0.8% previous; m/m at 0.3% vs. 0.7% forecast, 0.8% previous

As expected, the U.K. GDP data was the headliner for the morning London economic calendar, coming in below expectations and sending Sterling lower–at least briefly.  With exception to the comdolls, the British pound was actually able to bounce back quickly and even trade in the green for the session, possibly on the better-than-expected Index of Services, BBA mortgage approvals data, or stories from the counter currencies driving the pair:

GBP/USD is up 64 pips (+0.42%) to 1.5292, GBP/JPY is up 41 pips (+0.22%) to 181.74, and GBP/NZD is down 27 pips (-0.17%) to 1.9886

Again, the comdolls continue the broad strength we saw in the Asia session, possibly all lifted by the  Aussie who likely drew in buyers after the better-than-expected CB leading index data for February.  Whatever the case may be for their strength, comdolls are still kicking butt going into the U.S. trading session:

AUD/USD is up 96 pips (+1.22%) to .7953, NZD/USD is up 50 pips (+0.66%) to .7689, and AUD/NZD is up 69 pips (+0.67%) to 1.0341

The biggest currency move of note is from the Swiss franc, taking a big hit on the session on talks of intervention by the Swiss National Bank, something that SNB Chairman Thomas Jordan has mentioned they were open to recently to combat the damage to the Swiss export economy that a rising Swiss franc can do.  The pain is far and wide for the franc and doesn’t seem to be slowing down at the moment:

USD/CHF is up 25 pips (+0.25%) to .9565, EUR/CHF is up 75 pips (+0.72%) to 1.0467, and the biggest gainer of the session among the franc pairs is AUD/CHF, up 102 pips (+1.36%) to .7601

And finally, the Greenback is also on the downslide in the morning London session, and with no direct catalyst, it’s likely a continuation of recent weakness, possibly due to low expectations for the upcoming U.S. GDP data or FOMC monetary policy decision.

Is the economy slowing down? Will the Fed push back rate hikes? These are valid big time questions, and it seems like forex traders would rather square away their long USD positions than hang around to find out.  Overall, it’s a down day for the Greenback, minus the franc and its weakness on SNB intervention speculation:

EUR/USD is up 54 pips (+0.50%) to 1.0942, USD/JPY is down 4 pips (-0.04%) to 118.97, and USD/CAD is down 28 pips (-0.23%) to 1.2055

The forex calendar for the Tuesday afternoon London/morning U.S. session is light on top tier data, but probably busy enough to keep this morning’s volatility going through the London close.

At 2:00 pm GMT, we’ll get the S&P Case-Shiller home price index data for another read on the U.S. housing sector. The forecast is for a 4.7% rise vs. the 4.56% rise in the previous month. The trend has been higher since December, but still far below the the double digit gains we saw in the first half of 2014.

At 3:00 pm GMT, we’ll get a read on U.S. consumer confidence (forecast 102.5 vs. 101.3 previous) and the Richmond manufacturing index data (-2 forecast vs. -8 previous). The consumer confidence number is the likely number between the two, and if it is able to hold onto that rising trend and stay above the 100.0 index level, it should have a positive boost for the Greenback.

Outside of economic event catalysts, we’ve got Bank of Canada Governor Stephen Poloz testifying to the House of Commons Standing Committee on Finance at 1:45 pm GMT.  We don’t usually get new monetary policy insights from these kind of events, but they can be big market movers is we do get surprised by the Governor. Be ready Loonie traders and stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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