Forex news from the European morning session 27 Jan

News:

  • Premier Li says China's downward economic slide is not going to end anytime soon

  • PBOC looking at additional measures to curb yuan losses

  • China to ask financial institutions to support real economy

  • ECB's Coeure says using fiscal space would speed up Eurozone economic growth

  • German government lowers 2016 GDP forecast to +1.7% vs +1.8% prev

  • German economic ministry lowers 2016 export growth forecast to 3.2% vs 4.2% prev

  • ECB's Mersch says European banks are a lot more resilient nowadays

  • Oil and equities on the slide again 27 Jan

  • Chinese equity markets close lower 27 Jan

  • Option expiries 10am NY cut today 27 Jan

Data:

  • UK Nationwide house price index Jan mm +0.3% vs +0.6% exp

  • Germany GFK consumer confidence Feb 9.4 vs 9.3 exp

  • UK BBA mortgage approvals Dec 43,975 vs 45,500 exp

  • Italy business confidence Jan 103.2 vs 103.8 exp

  • France consumer confidence Jan 97 vs 96 exp

  • Switzerland UBS consumption indicator Dec 1.62 vs 1.55 prev

  • Nikkei 225 closes up +2.72% at 17,163.92

Oil and equities dominate the landscape again but eyes are firmly on the FOMC prize later.

Chinese equity markets closed lower but pared larger losses into the close. That wasn't enough to avoid falls in oil and European equities though and the euro was on the front foot from the off.

EURUSD posted 1.0883 before capping in a move that also saw EURGBP push up through 0.7600 and pushing down GBPUSD to 1.4283 after failing around 1.4350 offers/res in Asia.

USDJPY had rallied on a firmer Nikkei but soon found itself on the back foot again and was testing 118.00 having found 118.50 a step too far.

USDCAD has once again been given the run around by oil and after a couple of sharp rallies into 1.4140 has now found itself on the back foot through 1.4080 as oil prices steady/firm.

USDCHF has dipped on the EURUSD demand helped along by EURCHF supply above 1.1050 again while AUDUD and NZDUSD have both found dip demand only to run into fresh supply on the rallies.

Lots going on but in contained ranges as we wait to see whether Yellen and Co have another hike up their sleeve.