ForexLive European Morning Wrap

Quite a session once again...... G20 rhetoric dominates the morning's trading Euro rallied after comment from Bundesbank's Weidmann  but falls again soon after Pound fell sharply on biggest fall in UK Retail Sales since April 2012 As expected we had a morning of G20 chatter on the newswires, but this time it all seemed to be sticking to a party line of markets forces to dictate exchange rates not fixed policies, as well as stating that any agreement will not be specified at one country.... Then German Bundesbank President Weidmann commented that the ECB would not cut interest rates to weaken the Euro and cue EURUSD surging to 1.3393 from 1.3355 only to run into a bank of offers and with USDJPY finding offers all morning it didn't take long for EURJPY to drive everything back down again. ECP President Draghi stated, amongst a host of other stuff, that the LTRO repayments showed that things were looking better for the EMU but that fragility still remained, and that Q4 GDP was worse than expected. EURJPY sank to 2 week lows of 123.11 and then dipped again only to run into more bids at 122.90 from where we've seen a steady climb, dragging EURUSD off lows around 1.3315 again but it's all been very quiet in the last hour or so. Adding to the general chos and mayhem was the release of UK Retail Sales data for January which produced the biggest fall since April 2012. The figures came out at -0.6% for both mm and yy versus expectations of +0.4% and +0.8% respectively. Cue a sharp fall in the Pound with GBPUSD falling from 1.5530 to 6 1/2 month lows of 1.5470 and dragging every GBP pair with it.. Decent bids down there though saw the move come to a halt. Sellers since appearing above 1.5500 unsurprisingly to fill the gaps and currently at 1.5490. BOJ governor Shirakawa says he will tell the G20 meeting that Japan's policies are aimed at domestic policy and that the Yen's weakening is due to receding rsk aversion amongst investors.. They'll be all ears for that one.. For the last hour or so it's been quiet ahead of more anticipated G20 newsbombs and upcoming US data, but it's been a very messy morning....