- German Gfk Consumer Sentiment: 10 vs. 9.8 forecast, 9.7 previous
- French GDP (Final) q/q: 0.1% vs. 0.1% forecast/previous
- European M3 Money Supply y/y: 4.0% vs. 4.3% forecast, 4.1% previous
- U.K. Retail Sales m/m: 0.7% vs. 0.4% forecast, -0.3% previous
- U.K. Core Retail Sales m/m: 0.7% vs. 0.4% forecast, -0.7% previous
- U.K. CBI Distributive Trades: 18% vs. 18% bal forecast, 1% bal previous
The Canadian dollar continues to see support and an unusual rise in volatility, likely on today’s geopolitical news of Yemen airstrikes sending oil (one of Canada’s largest exports) on a tear higher. Where oil goes, the Loonie tends to go, and from Asia to the open of the morning London session, we saw more gains in the Loonie against most of the majors, especially against recent laggards like the Greenback and the British pound:
USD/CAD is down 92 pips (-0.74%) to 1.2426, GBP/CAD is down 69 pips (-0.38%) to 1.8556, and AUD/CAD is down 39 pips (-0.40%) to .9775
The British pound and euro are both movers and broadly lower on the session, with the former moving lower despite positive retail sales, and the latter lower on possibly the lower M3 money supply numbers. Or the bearishness could be on the Yemen airstrikes sparking risk aversion, but whatever the case may be both currencies are looking down (with exception to the Greenback) with the euro the apparent weaker of the two:
EUR/GBP is down 8 pips (-0.11%) to .7361, EUR/JPY is down 58 pips (-0.45%) to 130.46, GBP/JPY is down 60 pips (-0.34%) to 177.17
And finally, the U.S. dollar is also a loser with the spike in oil putting pressure on the Greenback, as well as lifting the Loonie and Japanese yen against the most widely traded currency to add more pressure. It’s all read across the board for the Buck with momentum still in favor of the sellers and risk-off traders going into the U.S. trading session:
USD/JPY is down 79 pips (-0.67%) to 118.67, GBP/USD is up 49 pips (+0.33%) to 1.4926, and EUR/USD is up 25 pips (+0.23%) to 1.0992
The forex calendar for the Thursday afternoon London/morning U.S. session is light on economic data, but we do have central bank speak to hopefully light the fire that’s been sparked by geopolitical news.
At 12:30 pm GMT, we’ll get a read on the weekly U.S. initial jobless claims, forecasted to tick lower to 290K vs. 291K previous. This is a mid-tier read that typically doesn’t spark broad currency market movement, but with a near empty calendar we could see at least today’s volatility levels remain elevated, at least in the Greenback.
We’ve also got a couple of central bank speeches for forex traders to be aware of as any surprises from policy makers can bring on a rush of buy and sell orders. At 1:00 pm GMT, FOMC member Dennis Lockhart due to speak on his economic and monetary policy outlook at an international investment education symposium, and at 1:30 pm GMT, Bank of Canada Governor Stephen Poloz is due to speak at the U.K. Chamber of Commerce. No new insights are anticipated, but once again, if there is a surprise be ready for big volatility. And if there are no surprises, look for today’s geopolitical news to keep the markets moving, at least until the close of the London trading session. Stay frosty!
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