London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Aug 12 08 12:03 GMT |

The buck traded sideways in the London session, as economic data across the pond came in broadly in line with expectations and did not offer a compelling reason to take currencies one way or the other. French consumer prices were in line at -0.2% in July, leaving the annual rate unchanged at 3.6%. Meanwhile, UK consumer prices came in flat in July and the annual rate did come in above expected at 4.4% from 3.8%. Weaker home price data offset this, as the DCLG showed home prices in the UK rose just 0.6% annually in June from a 3.0% run-rate the prior month.

The dreary economic data provided little decisive price action. EURUSD opened London trading near 1.4880 and was sitting near 1.4890 at the close. GBPUSD saw a similar reaction, opening around 1.9050 and closing near the 1.9025 level. USDJPY meanwhile closed right about where it opened in London, right around the 100.20 mark. USDCAD traded in a very tight 30 pip range as oil prices dropped off a modest $0.50 in the session. The pair opened and closed near the 1.0705 area.

Trade data out of the US and Canada kick of the NY session this morning. The market expects a widening in the US trade deficit to $62.0B in June from $59.8B the prior month. A better than expected trade balance should provide a boost to the buck. Canada's trade balance is expected to print C$5.8B in June after a C$5.5B result the previous month. The market is also likely to be focused on oil in NY trading, as the improvement in the Russia/Georgia conflict provides oil traders another excuse to sell the commodity.

Upcoming Economic Data Releases (NY Session) Prior Estimate

* 8/12/2008 12:30 GMT CA Int'l Merchandise Trade JUN C$5.5 C$5.8
* 8/12/2008 12:30 GMT US Trade Balance JUN -$59.8B -$61.5B
* 8/12/2008 14:00 GMT US IBD/TIPP Economic Optimism AUG 37.4 - -
* 8/12/2008 14:00 GMT SZ SNB Announces Results of Dollar Repo Auction
* 8/12/2008 18:00 GMT US Monthly Budget Statement JUL -$36.4B -$82.7B
* 8/12/2008 21:00 GMT US ABC Consumer Confidence AUG 10 -49 - -

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