ForexLive European Morning Wrap – Good Two-Way Business Ahead of Bernanke and Draghi Coming up Later

German Import Price Index jan 0.1% vs 0.3% exp and -0.5% prev
German GFK consumer climate index feb  5.9 as exp vs 5.8 prev
French consumer confidence feb  survey uchanged at 86 as exp
Swiss KOF leading indicators jan 1.03 vs 1.00 exp and 1.12 prev
UK GDP q4 second reading unchanged at -0.3% but 2012 revised up to 0.2% from flat after q1+q3 improvements
UK business sentiment q/q -1.2% vs +2.2% exp and 0.5% prev
EZ economic sentiment index better at 91.9 vs 89.8 exp
BOE's Bean doesn't want negative interest rates. says inflation policy reveiw sensible
Italian 10 yr + 20 yr bond auctions have good take up but disappoint with lower yields
ECB's Coeure says OMT bond-buy plan isn't a nuclear deterrent
Asian sovereigns selling eur/usd at 1.3115-25, buying aud/usd 1.0185
Cable rallies to 1.5165 after failing to break below previous lows

All in all a quiet session for the most part with a generally better bid tone to the euro and cable after failure to break down through previous lows.

Eur/usd rallied to 1.3123 aided by better than expected EZ economic sentiment data at 91.1 and talk of good Italian bond auction but it ran into asian sovereign selling around 1.3120. Disappointing yields on the 10+20 year bonds also added to the turnaround back below 1.3090 but fresh buyers emerged.

Eur/gbp climbed higher in early trading as the euro headed north but then talk of better than expected UK gdp q4 data and vodafone stalling on its purchase of Germany's Kabel gave gbp/usd a lift up through 1.5120 resistance to a high of 1.5165. Confirmation that the upward revision was to q1+q3 in 2012 put a softer tone under the pound again and we've seen decent gbp selling since.

Comments from BOE's Bean and ECB's Coeute had little impact and we've spent the last couple of hours in tight ranges

Reported large asian sovereign buying interest on aud/usd at 1.0185 has put the brakes under its continuing fall with the barrier option at 1.0200 falling this morning. 1.0150 remains a key level and is understndably going to be defended by the aussie dollar bulls.

Yen pairs have been relatively well behaved given recent moves and have largely been euro-led in our session.

Market awaits Messrs Bernanke and Draghi this afternoon at 15.00 gmt and 17.30 gmt respectively.