ForexLive European Morning Wrap
Cable sees early pressure, falling again down to 7-month lows of 1.5438 but recovers on ME buying interest
Euro finds good support after Asian sovereign buying in EURJPY causes rapid surge to 125.91
BUBA rejects calls for Germany to loosen fiscal policy
French Fin Min Moscovici says France will await EU Commission's estimates on Feb 22 before considering further budget savings
ECB's Nowotny sees " no cause for concern in Euro exchange rates.
Quiet at the moment as traders await ECB President Draghi testimony at 14.30 GMT.
First action of the day saw GBPUSD getting clumped through reported barrier option support at 1.5450 to post 7-month lows of 1.5438. Continuing fears over the UK economy and comments made at the weekend by MPC member Martin Weale that the Pound may need to fall further to help UK trade imbalance all added to the bearish sentiment.
Nothing new in that given BOE governor King's frequent comments/intimations as recently as last week but it does suggest a growing policy of more deliberate nature. There is no guaranteee it will have the required level of success though.. Check out a post I made yesterday. http://www.forexlive.com/blog/2013/02/17/uk-weekend-press-pound-devaluation-has-mimimal-impact/.
Anyhow, cable got sold down to support levels around 1.5460 then rallied above 1.5480 only to come tumbling down again before Middle East buying put the brakes on and took it back up to 1.5483 again.
EURUSD was testing strong support at 1.3320 when a large Asian sovereign name, reportedly with black and white eyes, took the market by surprise and hoovered up on EURJPY forcing the pair to 125.91 before running into good selling interest. EURUSD posted highs of 1.3379 before running into a decent seller, reported to be the SNB.
We've since been down to 1.3340 with EURJPY falling to 125.33.
The Bundesbank's monthly report offered little of anything new but rejected calls for any loosening of fiscal policy and sees growth in and from Q1.
ECB governing council member Nowotny repeated his previous comments over Euro rates of exchange but market was non-plussed http://www.forexlive.com/blog/2013/02/18/ecbs-nowotny-forex-markets-extremely-volatile-but-no-cause-for-concern
Market now awaits the testimony of ECB President Draghi to his Economic and Monetary Affairs Committee at 14.30 GMT.. Catch it live at http://www.europarl.europa.eu/ep-live/en/committees/video?event=20130218-1530-COMMITTEE-ECON
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.