Forex news from the European morning session 24 Feb

This was originally posted an hour ago but appears to have got lost in the ether.

News:

  • BOJ's Kuroda says adoption of negative rates does not signal a limit to QQE
  • UK's Gove says Cameron's EU deal is not legally binding
  • Trump wins Nevada caucus vote
  • China says it will further open up domestic interbank bond market to foreign investors
  • BOJ say there is no evidence of a leak from 29 Jan meeting
  • Governments are not seizing chance to use low rates to cut debt says Weidmann
  • Bundesbank's Weidmann says gradual Eurozone recovery should continue
  • More from Weidmann: EU and UK have both benefitted from economic integration
  • This really isn't the time to catch a falling knife
  • I love the smell of panic first thing in the morning
  • Option expiries 10am NY cut today 24 Feb
  • Nikkei 225 closes down -0.85% at 15,915.79

Data:

  • Italy industrial sales Dec mm -1.6% vs -1.1% prev
  • UK BBA mortgage approvals Jan 47,509 vs 44,800 exp
  • France consumer confidence Feb 95 vs 97 exp
  • Switzerland UBS consumption indicator Jan 1.66 vs 1.61 prev
  • UK CBI reported sales index Feb 10 vs 12 exp

What began as a steady session with good two-way business soon escalated into panic stations as European equities posted further losses adding to what was already a fragile situation.

The long and short of it is, er, traders have been getting long of yen and short of just about everything else.

GBPUSD had an early look back above 1.4000 as EURGBP tested 0.7850 and GBPJPY found some buyers on Kuroda QQE comment but it was all short lived. We've since seen steady one-way traffic to 1.3880, 0.7907 and 155.10 as the pound takes another hit with Brexit once again adding to the wobbles.

USDJPY had that early look above 112.20 but then yen-pair selling capped rallies and sent the pair back to 11.74 before finding a few buyers.

EURUSD found itself pinned around 1.1000 with equity-led and EURGBP demand fighting against EURJPY sales plus option expiry interest casting a shadow. The pair has finally broken down though to post 1.0958 so far.

EURCHF has also retreated again to post 1.0892 which has capped USDCHF gains with the franc's own current safe-haven demand having its say.

USDCAD has also been pulled around by cross plays as well as oil price but the net result has been a contained range. Likewise AUDUSD and NZDUSD.

So it's all about risk and the market's on-going view that it's very much in need of the comfort blanket right now.