London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Aug 06 08 12:02 GMT |

The buck was modestly bid in London trading on the back of some more disappointing economic data across the pond. UK consumer confidence plunged to 51 in July from a previous 62 print in June, marking the sharpest decline in the series history. Meanwhile, the Euro-zone did not offer any better results as Germany factory orders plummeted -2.9% in June after a downwardly revised -1.4% in May. This took the annual rate to a dreadful -6.1% from -2.5% the prior month, the weakest run-rate since November 2001.

The dollar strengthened on the weaker data with EURUSD dipping to a close near 1.5470 after opening around the 1.5500 mark. Sterling (GBPUSD) lost some ground as well as it fell to a session close near 1.9540 after opening near the 1.9575 area. Oil prices remained contained below $120/bbl and this helped USDCAD hold on to gains, opening near 1.0425 and closing around the 1.0440 level. Oil inventory data today at 1435GMT will be closely watched and higher than expected results should give the oil price another hit, below yesterday's $118/bbl low.

USDJPY also gained, catching up a bit to the other currency moves from yesterday. The pair opened near 108.35 and was sitting near 108.65 at the close of London trading. It rose as high as 108.70, which seems to be the next key resistance level and trigger for more upside. US stock markets are currently pointing to a weak open, but another pullback in oil prices could propel them into the green and thus help extend USDJPY gains.

Upcoming Economic Data Releases (NY Session) Prior Estimate

* 8/6/2008 14:00 CA Ivey Purchasing Managers Index JUL 69.6 62.5
* 8/6/2008 14:35 DOE U.S. Crude Oil Inventories AUG 1 -200K -81K

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