London Session Recap – November 26, 2013

  • Major hedge fund selling weighs on Aussie pairs
  • BOE Gov Carney says employment is a threshold and not a trigger for rate hikes
  • Carney says wage growth is weak and might undermine domestic growth

The BOE inflation report hearings caused a bit of commotion among pound pairs, although GBP/USD and GBP/JPY are still struggling to find a clear direction. Traders couldn’t seem to make up their minds on where to take the pound, as BOE Governor Carney reiterated that employment targets are simply a threshold but not exactly a trigger for interest rate hikes. He pointed out that wage inflation is still subdued and might weigh on domestic growth later on, which means that tightening isn’t guaranteed even if hiring keeps improving.

As for the Australian dollar, the currency continued to get heavily beaten by its counterparts in today’s London session, as news of another major hedge fund selling its Aussie holdings hit the airwaves. AUD/USD slipped back to the .9100 support level, as the bearish sentiment also weighed on NZD/USD.

In the next few hours, we’ll get a glimpse of U.S. building permits data and CB consumer confidence. Building permits are estimated to come in at 0.94M while the consumer confidence index could rise from 71.2 to 72.2, reflecting stronger optimism. Higher than expected readings might remind traders that a December taper could still be on the table, which could be dollar-positive.

See also:

Asian Session Recap

U.S. Session Recap

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