- Swiss Producer & Import Prices m/m: -0.4% vs. -0.8% forecast, -0.7% previous; y/y at -2.1% vs. -2.4% forecast, -1.6% previous
- European Current Account: 18.1B EUR vs. 19.5B EUR
Mixed forex price action in the morning London session with strength in the euro and pound, and the Japanese yen pulling back from early session strength.
Currency traders went into buy mode on the euro and Sterling early in the session, possibly on a reduction in USD strength over the past week as risk aversion continues to rise, so profits may be taken off the table benefitting recent losers; we’re also approaching the highly anticipated ECB meeting this week which may also be prompting traders to take profits or lighten up on risk. We also saw weaker-than-expected Swiss trade data, possibly pulling forex traders out of CHF longs and back into weaker currencies:
EUR/USD is ups 63 pips (+0.55%) to 1.1621, GBP/USD is up 28 pips (+0.19%) to 1.5160, and EUR/CHF is up 166 pips (+1.69%) to 1.0088
The Japanese yen saw strength early on Monday, possibly on statements from the Bank of Japan that there does not need to be further easing this year and/or on fresh weakness in the Chinese equity markets, falling on weaker growth outlook. But we saw a pull back on that strength in the morning London session and with risk aversion sentiment driving higher, we may see more yen strength through a thin U.S. trading session. For now, the yen continues to be stronger on the session:
USD/JPY is down 12 pips (-0.11%) to 117.14, AUD/JPY is down 27 pips (-0.29%) to 96.41, and CHF/JPY is down 141 pips (-1.04%) to 134.91
The forex calendar for the Monday afternoon London/morning U.S. session is empty as well with the U.S. markets closed in observance for Martin Luther King Day and no economic releases from Canada. With U.S. forex traders out for the session, liquidity will likely be light. This typically means low volatility in the currency markets, but if it does move, it could be a fast spike with a lower amount of orders and traders on the other side of strong moves. Stay frosty!
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