Forex news from the European morning session 29 Jan

News:

  • BOJ's Kuroda says they will lower rates further if needed
  • More from Kuroda: Negative rate policy doesn't mean BOJ has reached JGB buying limit
  • Kuroda says BOJ not targeting FX rates
  • Japan's Suga says BOJ took "appropriate" action after discussion
  • Japan's Aso says negative rates expand framework for monetary easing
  • Russia's Novak says there is no confirmation of OPEC/non-OPEC meeting
  • Russia in constant contact with other oil producers
  • SNB increases EUR reserves to 42.9% in Q4 vs 41.9% prev
  • Pound takes another pounding as EURGBP demand returns
  • USDCAD higher as oil sellers return
  • Chinese equities close higher on the day 29 Jan
  • Option expiries 10am NY cut today 29 Jan

Data:

  • Eurozone CPI Jan yy estimate +0.4% vs +0.4% exp
  • France Q4 GDP flash qq +0.2% as expected
  • France CPI Jan flash mm -1.0% vs -0.9% exp
  • Germany retail sales Dec mm -0.2% vs +0.4% exp
  • Spain Q4 GDP flash qq +0.8% as exp
  • Switzerland KOF leading indicator Jan 100.3 vs 96.0 exp
  • Nikkei 225 closes up 2.8% at 17,518.30

A busy session with the inevitable month-end volatility compounded by the BOJ rate cut fall out.

The BOJ negative interest rate move led to firmer Nikkei in a volatile Asian session and USDJPY found support at 119.30 rallying to 120.40 as I sat down. It's been underpinned since and finally punching through a few offers at 121.00. Yen pairs have seen similar dip demand and this has added to euro strength.

Also helping the euro has been the usual month-end EURGBP buying and we've seen a move in this session from 0.7570 all the way to 0.7646 before running into fresh supply. The move has slapped cable down to 1.4280 support after failing to hold above 1.4400.

Further EURCHF gains have the scent of SNB all over them and after falling below 1.1100 we've been back up to post new 1 year highs of 1.1166 giving USDCHF a lift back above 1.0200

Oil prices were firmer to start with and that saw USDCAD down to 1.3966 but lack of any fresh initiative on producer meetings or quota cuts saw oil drop over $1. USDCAD rallied through good res/supply at 1.4050 then 1.4080 before running out of steam as oil steadied

US and Canadian GDP data to come, throwing more volatility into what is already a potent and heady mix.