ForexLive European Morning Wrap – Euro Finds Sellers Again After a Perky Start and USDCHF Posts 6 Month Highs After SNB Comments

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RBA's Kent - Economic growth expected to be a little below trend this year RBA's Kent says strong jobs number may have been the result of a change in data collection SNB leaves 3 month libor at target 0-0.25% SNB says it is prepared to buy foreign currency in unlimited quantities Norway keeps interest rate on hold at 1.55 but says that rate hike probably not until 2014 AUDJPY fails at 100. barrier option cited ECB monthly bulletin repeats policy statement and says monetary policy to remain accommodative Eurozone Q4 employment: q/q -0.3% vs -0.2% prev   y/y -0.8% vs -0.7% prev Spanish bond auction yields lower USDJPY sell orders cap the EUR rise SNB's Jordan says CHF cap at 1.2000 was "absolutely necessary" It's been a really scrappy session with Europe taking a long time to get going but then saw JPY weakness with USDJPY leading the way posting highs of 96.53. EURJPY was quick to follow suit seemingly ignoring the selling pressure of yesterday, and reached 125.25, dragging EURUSD up with it to 1.2992. But USDJPY ran into well-advertised option related sell orders starting at 96.60 and running through to 97.00 and the rally came to a grinding halt. Cue a similar turn-around to yesterday with USDJPY falling to 96.25,  EURJPY  to 124.50 and EURUSD to 1.2945 where it stayed for a while. Into the mix came comments from the RBA's assistant governor Charles Kent who said the strong february jobs data may have been due to a change in data collection and AUDUSD came swiftly back to 1.0335 fiom 1.0366 at the same time AUDJPY was threatening to take out the barrier option at 100, and this pair naturally failed too given the double whammy of USDJPY and AUDUSD turning down at the same time. The SNB kept its 3 month libor at the target level of 0-0.25% but also repeated its concerns over the strong swiss franc and said it was prepared to buy unlimited foreing currency if needed amongst a raft other CHF negative rhetoric. Cue USDCHF rallying to post 6month highs of 0.9554 dragging EURCHF up to 1.2371, the latter pair falling back as EUR pressure developed elsewhere. In a statement just now SNB chairman Jordan said the CHF cap vs EUR at 1.2000 was " absolutely necessary" but reaction has been muted. The ECB's monthly bulletin carried no surprises but repeated that monetary policy would remain accomodative while ECB's Likanen re-iterated that Eurozone downside risks remain. Eurzone Q4 employment data came in just under expectations and had no impact but the spanish bond auction prodcued lower yields adding to the general euro malaise at that point in the session. EURGBP continued its journey lower after pausing between 0.8660-80 and has broken through support at 0.8650 as EURUSD posts session/3 month lows of 1.2915. As I said, a scrappy morning showing just how nervous these markets are right now.
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Posted In: NewsForexGlobalEconomicsMarkets
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