Article Highlights

  • U.K. RICS House Price Balance weaker: 20% vs. 25% forecast, 30% previous
  • Final reads on German inflation came inline with forecast/previous – HICP m/m at -0.3%; CPI m/m at 0.7%
  • French CPI m/m: 0.0% vs. -0.1% forecast, -0.4% previous
  • Swiss Producer & Import Prices m/m: -0.1% vs. -0.3% forecast, -0.1% previous
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The big mover of the session is once again the British pound, finding more fuel to the selling pressure from today’s release of U.K. housing data.  Data from the Royal Institution of Chartered Surveyors indicated that house prices fell to low levels not seen since October 2010, showing more disinflationary pressures and continuing the debate of when an appropriate would be for the Bank of England to raise rates.   Sterling has been on a slow grind lower all session, with the move seemingly gaining traction as we head into the U.S. trading session:

GBP/USD is down 38 pips (-0.24%) to 1.5737, EUR/GBP is up 30 pips (+0.39%) to .7911, and GBP/JPY is down 43 pips (-0.25%) to 181.72

Comdolls have also taken a bid, specifically the Australian and New Zealand dollars, possibly on the idea that continued easy money policies from the BOJ would support risk sentiment or on a slight pullback in U.S. dollar strength (possibly on comments from NY Federal Reserve President Dudley pushing rate hike expectations to mid-2015).  Whatever the catalyst may be, the Aussie and Kiwi found steady buyers in London (especially against GBP), which seems like it may continue into New York trading.

GBP/AUD is down 79 pips (-0.44%) to 1.8015, GBP/NZD is down 92 pips (-0.46%) to 1.9925, and GBP/CAD is down 20 pips (-0.11%) to 1.7835

The  forex calendar for the Thursday afternoon London/morning U.S. session has a little more meat to relative to the past few days, but still not much to chew on in terms of economic data.

At 1:30 pm GMT, we’ll get Canadian house price index data (0.2% forecast vs. 0.3% previous) and the weekly U.S. initial jobless claims data (280K forecast vs. 278K previous).  Both are low tier events, so don’t expect a big pick up in volatility without a huge surprise from the forecast/previous reads.

And at 7:00 pm GMT, we’ll get the monthly report on the U.S. government budget balance (-$111.7B forecast vs. $105.8B previous). This data point has been beating expectations in the past few months, which could continue with today’s read as the U.S. economy continues to exhibit all around strength in its recovery.

Federal Reserve Chair Janet Yellen will be giving a speech today at the European Central Bank, Federal Reserve Board, and Federal Reserve Bank of New York Conference in Washington, D.C. today. They are only welcoming remarks, so don’t expect big fireworks but anytime the Fed Chairwoman speaks, you’ve got to be on your toes. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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