London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Aug 25 08 12:03 GMT |

The buck pared gains in the London session as oil prices bounced a touch from overnight lows. With no economic data to speak of the market seems to have been primarily focused on commodity prices. Oil popped about $1 in the session to a close near $115.50/bbl. It will be interesting to follow the price action here today after the 5.4% plunge in oil prices on Friday.

EUR/USD traded up about 50 points after opening the session near the 1.4715 mark. Meanwhile, GBP/USD recovered about 90 pips and was sitting near 1.8510 at the session close. USD/CAD was bumped lower on higher oil prices and fell about 60 pips to a close near the 1.0450 level. Poor equity market performance in Europe and expectations for an open in the red for the US helped take USD/JPY a touch lower as well -- from an open near 110.15 towards 109.75 at the close.

The focus this morning is likely to be on the further evolution of oil prices and existing home sales data out of the US due up at 1400GMT. The market expects home sales rose 1.0% to an annual rate of 4.91 million units in July. Existing home sales have shown signs of stabilization since 4Q07, averaging roughly a 4.95 million unit run-rate since that period. We would expect a "stable" number coupled with further reduction of inventories would lead to further speculation that the US housing market is bottoming out and likely help boost the USD. Stay tuned.

Upcoming Economic Data Releases (NY Session) Prior Estimate

* 8/25/2008 14:00 GMT US Existing Home Sales JUL 4.86M 4.91M
* 8/25/2008 14:00 GMT US Existing Home Sales MoM JUL -2.60% 0.90%

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