Forex news from the European morning session 10 Feb

News:

  • ECB rumours that they could buy bank stocks as part of QE - Livesquawk
  • OPEC cuts 2016 world oil demand growth forecast to 1.25bln bpd vs 1.26bln prev
  • Cut oil production ? Not for us say Iran
  • Can Yellen dig herself and the dollar out of a hole?
  • 6 things you can expect from Yellen's testimony today and tomorrow
  • Greece's Stournaras doesn't know when they'll be eligible for ECB QE
  • Bank of Greece governor Stournaras says market panic in past few days is "unjustified"
  • Russia's Sechin says oil supply exceeding demand only because of OPEC over producing
  • Suga says global risk avoidance has spread to Japan
  • BOF's Villeroy says he's not worried about situation of French banks
  • More from Villeroy: ECB ready to act if necessary to lift inflation
  • Germany's DIHK still sees 2016 GDP of +1.3%
  • Nikkei closes down -2.31% at 15713.39
  • Option expiries 10am NY cut today 10 Feb
  • Apologies for intermittent service in Europe. Here's a solution

Data:

  • December 2015 UK industrial production -1.1% vs -0.1% exp m/m
  • France industrial production Dec mm -1.6% vs +0.3%
  • Italy industrial production Dec mm -0.7% vs +0.3% exp

A good day for European equities as traders/investors cover a few shorts ahead of Yellen's 2-day testimony to Congress. Impact notable again on currency pairs with the euro on the back foot and the pound feeling some love albeit on a round trip.

The Nikkei pared some losses into the close and European equities opened a tad firmer only to have an early wobble. Since then it's been a steady climb higher that has seen EURUSD fail around 1.1300 and drop to 1.1237 which in turn initially capped USDJPY gains as EURJPY fell into 129.00.

EURGBP had an early look at 0.7800 and again after softer UK production data which saw GBPUSD plummet to 1.4439 before staging an equally rapid recovery to take out supply around 1.4500 and post 1.4542 with EURGBP falling back to 0.7738

USDJPY eventually staged a decent rally in all this to test resistance/supply around 115.20 as GBPJPY buyers prevailed. USDCHF hasn't enjoyed so much love though as EURCHF downward pressure continues with the SNB seemingly happy to sit this one out for the moment.

USDCAD has been in retreat from 1.3920 to 1.3838 as oil firms with Brent and WTI both enjoying a decent session albeit tempered by some supply-focussed comments from Iran and OPEC.

AUDUSD and NZDUSD have both enjoyed the commodity-led support enhanced by EURAUD and EURNZD sales but rallies have equally found good supply still.

Fragile conditions then as we await on Yellen with the text of her testimony at 13.30 GMT and then later facing Congress from 15.00 GMT.