- No economic reports released during London session
- ECB Nowotny: E.U. fiscal policy needs to “become expansive”
- Canadian federal elections today
Today’s morning London forex session was a rather slow one since there was literally nothing on the docket. Still, the euro, the pound, and the Swissy were clearly on the move.
Despite a lack of economic reports, the euro was noticeably weak during the forex session due, perhaps, to pre-emptive positioning ahead of the ECB Governing Council’s policy meeting that’s gonna culminate with the ECB’s rate decision and press conference this coming Thursday. It should be noted that some ECB officials have been clamoring for more easing measures.
As an example, European Central Bank (ECB) Governing Council member Ewald Nowotny said last week that the “ECB is using the monetary policy instruments available – but it is quite obvious that in the current macroeconomic situation additional sets of instruments are necessary.”
Speaking of Nowotny, he said in an interview during the forex session that “For a considerable time, [the euro zone’s fiscal policy] was restrictive. Now it could be described as neutral, but there may be a need for it to become expansive” in order for the euro zone economy to grow, which is a subtle hint that the euro zone’s growth may be slowing down.
EUR/USD is down by 52 pips (-0.46%) to 1.1321, EUR/AUD is down by 89 pips (-0.58%) to 1.5512, EUR/JPY is down by 47 pips (-0.35%) to 135.19
Moving on, the pound was climbing higher even though there weren’t any direct catalysts that could have convinced forex traders to load up on the pound. It’s possible that the pound was benefiting from the euro’s weakness since EUR/GBP is down by 49 pips (-0.69%) to 0.7306.
GBP/USD is up by 37 pips (+0.24%) to 1.5491, GBP/JPY is up by 59 pips (+0.32%) to 184.99, GBP/CHF is up by 72 pips (+0.50%) to 1.4812
As for the Swissy, it was clearly weak during the forex session. And like the pound, there weren’t any catalysts for the Swissy as well, so it’s possible that the Swiss National Bank was sneakily weakening the Swiss franc again. In fact, the weak euro was least weak in terms of percentage change against the Swissy, with EUR/CHF is down by 17 pips (-0.16%) to 1.0829 for the forex session.
USD/CHF is up by 27 pips (+0.28%) to 0.9563, AUD/CHF is up by 24 pips (+0.35%) to 0.6975, CAD/CHF is up by 26 pips (+0.34%) to 0.7402
The forex calendar for the upcoming afternoon London/morning U.S. session only has the NAHB builders survey (62.0 expected, 62.0 previous) on tap. It’s a leading indicator for housing sales and the overall health of the U.S. housing market, and it’s scheduled for release at around 3:00 pm GMT. It’s considered a low-tier item, though, so it usually doesn’t move the market much.
Aside from the NAHB builders survey, we also have a couple of FOMC members with speaking engagements today, so make sure to keep an ear out for any juicy updates on the future direction of monetary policy and/or shifts in economic outlook.
Up first, at 3:00 pm GMT, Federal Reserve Governor Lael Brainard will deliver a speech in Chicago. We probably won’t be getting much in terms of updates since he’ll be talking about regulatory burden, but you never know, right?
Next, at 5:00 pm GMT, Richmond Fed President Jeffrey Lacker will be giving a speech over at the University of Richmond. His speech is titled “Early Childhood Education in the Context of Lifetime Human Capital Investment,” so we probably won’t be getting any juicy updates as well, but do keep an ear out just in case.
Also, note that Canada is holding its federal election for the members of the House of Commons today, so make sure keep a close eye on the Loonie’s forex price action, alright? Stay frosty!
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