Forex trading news and economic data headlines 27 October 2016
News:
- UK's Hammond says Q3 GDP data shows economy is resilient
- Pound demand after GDP data but sellers quick to pounce
- EIB's Hoyer says "the position of Europe in the world is at risk"
- Yuan bears out in force as traders look for US Fed rate hike
- Norway's central bank keep interest rates on hold at 0.5%
- Sumitomo Life says it plans to increase holdings of foreign bonds Oct-March
- AUDUSD bounces back to 0.7622 as option expiries cast a spell
- Option expiries for the 10 am NY cut today 27 Oct
Data:
- UK Q3 GDP qq flash +0.5% vs +0.3% exp
- UK CBI retailing reported sales Oct 21 vs -2 exp
- ECB M3 money supply Sept yy +5.0% vs +5.1% exp
- Spain Q3 unemployment rate 18.9% vs 19.3% exp
- Italy consumer confidence index Oct 108.00 vs 108.60 exp
- Switzerland UBS consumption indicator Sept 1.59 vs 1.53 prev
A lively session for GBP traders with great two-way opportunities pre and post Q3 GDP data.
GBP pairs began the session in quiet mode with GBPUSD eventually drifting lower from 1.2225 to test 1,2200 before rallying into the 1.2250 strong sell interest as data time approached. Cue better than expected headline and quick 1.2273 post before then falling back to 1.2211 wiping its feet at 1.2250 and 1.2230 along the way. We've since nudged steadily higher again as intra day shorts take some money off the table.
EURGBP fell to 0.8893 from 0.8928 on the data release only to climb back up and a similar pattern was noted in other GBP pairs. EURUSD has maintained a bid tone throughout underpinned by general cross demand.
JPY pairs had started on the back foot as the Nikkei posted losses and AUDJPY selling saw AUDUSD fall to 0.7609 wiping its feet at 0.7620 where large options expire today. It wasn't long though before the Nikkei pared some losses and put a bid under USDJPY and core pairs.
Oil has enjoyed a decent morning consolidating yesterday's sharp gains late in NY and that has helped cap USDCAD ahead of the 1.3400 sell interest. Belgian agreement on CETA has had little impact.
US durable goods is the big data risk coming up at 12.30 GMT so stand by for some knee-jerk as markets second-guess its impact on tomorrow's Q3 flash GDP reading and Fed rate hike chances.
