Forex news from the European morning session 14 Jan

News:

  • Many members of ECB sceptical about the need for further easing
  • More on that Reuters ECB story: "We all hope that what we've done is enough"
  • UK government minister says staying in EU under current terms "would be disastrous for Britain"
  • Chinese equity markets close higher 14 Jan
  • China to continue simplifying FX regulation
  • China fixes end-of-day USDCNY at 6.5887
  • Merkel still hoping for a balanced 2016 German budget
  • Spain cannot expect budget easing says EU's Moscovici
  • Greek ELA ceiling lowered to EUR 72bln vs EUR 75.8bln prev
  • EU's Moscovici says Eurozone economic recovery is not strong
  • BOK's Suh says Korean economic recovery to be weak
  • Australian 2016 GDP seen growing at +2.6%
  • Here's a quick guide to trading big events in the run up to the BOE
  • Option expiries 10 am NY cut 14 Jan

Data:

  • German 2015 GDP comes out better than expected
  • Italy industrial output Nov mmm SA -0.5% vs +0.2% exp
  • Nikkei 225 closes down 2.68% at 17,240.95
  • Germany WPI Dec mm -0.8% vs -0.2% prev
  • Japan machine tool orders Dec flash yy -25.8% vs -17.7% prev

Lower equity markets and reports of ECB members not looking to ease policy further set the cat amongst the pigeons this morning as we wait on the BOE MPC rate decision and Minutes at the top of the hour.

European equities have traded lower with the DAX down over 3% despite a stronger finish to Chinese markets and this helped fuel some early euro demand which accelerated on the reported ECB comments.

EURUSD posted 1.0937 as the high after wiping its feet around 1.0900 from 1.0854 lows with EUR pairs all following suit on the journey higher.

EURGBP demand has taken it to new recent highs of 0.7607 from 0.7532 and that has added pressure to cable pushing it down from 1.4425 to 1.4360 with pound pairs generally on the back foot on dovish MPC expectations.

EURCHF continued its journey higher and posted 1.0983 in the euro rush higher but USDCHF has fallen back from a test of 1.0100 to post 1.0010 as EURUSD demand continues.

USDJPY rallied to 118.18 from 117.30 Asian lows as the Nikkei pared some of its early 4% losses and EURJPY demand posted 128.76

USDCAD had a look at 1.4400 but has fallen back but soft oil continues to keep the pair underpinned.

AUDUSD had tried to rally through 0.6570 but then got slapped lower again to 0.6911 on the EURAUD demand with a similar story on NZDUSD.

Focus now firmly on the BOE.