The mid-week London Session brought the mildest trading environment of the week, and possibly of the active month of September. We seamlessly transitioned into the London open with virtually no change in activity or market tone. With the USD holding a modest bid, the final reading of UK Q2 GDP came at 0430 EDT (0830 GMT), spurring light volatility in related currency pairs. Beyond that, all has been very quiet on trading desks, with a reporting the same calm conditions.
The big mover in today�s London Session has been EURGBP. Though the absolute point difference from yesterday may not be as significant as other pairs, its ascension above last week�s 0.7020 high is further confirmation of the ongoing weakness in the British Pound. The GBP was again active relative to other currencies, leading the way to a firmer US dollar as Cable dipped to the 2.0110 area, roughly 75 pips off earlier highs and the New York closing rate. The pair remains very heavy as New York traders enter.
The other leader of the day is USDCAD, which experienced renewed interest following the comments of the Bank of Canada�s Governor Dodge yesterday. Speaking about the USD decline, he said it was �part of a global balancing that has to go on�. He also appeared to flag up a possible rate cut at the BoC’s next fixed date rate announcement (October 16th), by saying that the current overnight target (4.50%) now contained “significant risks”. USDCAD continued to hold a firm bid and is currently trading near the upper-end of its range around 1.0080.
New York traders will be eying the 0830 EDT release of August Durable Goods Orders in an effort to continue to fill in the blanks of the state of the US economy.
Upcoming Economic Data Releases (New York Session)
0830 EDT Aug Durable Goods Orders, consensus: -4.0% (relevance: medium)
0830 EDT Aug Durable Goods Orders ex. Transportation, consensus: -1.0% (relevance: medium)