- German Current Account: 25.3B EUR vs. 20.5B EUR forecast, 18.9B EUR previous
- German Trade Balance: 19.1B EUR vs. 16B EUR forecast, 17.9B EUR previous
- French BoF Business Sentiment: 98 vs. 97 forecast/previous
- Sentix Indicator Index: 12.4 vs. 3 forecast, 0.9 previous
The weak Chinese trade data posted in the Asia session continued to have a strong influence on risk sentiment in the morning London session, sparking forex traders to move to risk-off behavior like selling off higher-yielding currencies and buying back the Japanese yen. We’re seeing yen pairs on the downswing, with momentum picking up right from the London open.
USD/JPY is down 45 pips (-0.37%) to 118.63, GBP/JPY is down 106 pips (-0.59%) to 180.39, and AUD/JPY is down 6 pips (-0.6%) to 92.65
Because of the close trade ties with China, the Australian dollar initial took a hit on the Chinese trade data news, but is bouncing back nicely to get back in the green against most majors during European trade:
AUD/USD is up 29 pips (+0.38%) to .7812, GBP/AUD is down 70 pips (-0.36%) to 1.9459, and AUD/NZD is down 30 pips (-0.29%) to 1.0539
And of course, the other main story of the morning continues to be the story in Greece, where Greek and European leaders continue to work for a way to balance austerity demands on Greece and keep financing going to avoid a potentially disastrous Greek exit. Sentiment seems to be on the rise in probability of a Grexit, prompting currency traders to sell the euro (and even the British pound) on the session despite positive German data and a rise in European sentiment:
EUR/USD is down 39 pips (-0.35%) to 1.1275, GBP/USD is down 26 pips (-0.17%) to 1.5206, EUR/JPY is down 93 pips (-0.69%) to 133.72
The forex calendar for the Monday afternoon London/morning U.S. session looks like it may be a snoozer with only the Canadian housing starts at 1:15 pm GMT in the lineup as a potential economic catalyst. This is a fresh read on the Canadian housing market, with an expectation of coming in at 178.5K starts vs. 180.3K previous. This is a mid-tier event, so we not see much reaction to the event, but with a light calendar, the focus it may receive may be more than usual for this number.
With no major economic data points from the U.S. or Canada, the focus will continue to be on the developing bailout negotiations between Greece and the EU, as well as the weakening global growth fears sparked by Chinese trade data this past weekend. Stay frosty!
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