Forex news for January 21, 2015

ECB decision and statement:

  • ECB keeps interest rates on hold
  • Draghi: There are no limits on how far we are prepared to act
  • ECB wants to make sure that all technical work is done so all tools are ready for March
  • We're watching China closely says Draghi
  • Draghi: Exchange rate is not a policy target

Other news:

  • George Soros "I'd be surprised if the Fed raised rates again"
  • Magnitude 6.9 earthquake hits 167 miles west of Cihuatian, Mexico
  • OPEC cuts non-OPEC 2016 supply estimate
  • SNB's Jordan: There is no deflation danger for Switzerland
  • BOE's Weale: Feeling fairly upbeat about UK prospects
  • BOE's Weale says sterling's fall could easily offset the oil and wage effects
  • Chinese vice-president Li: We will keep intervening in stock market
  • Eurozone consumer confidence -6.3 vs -5.7 expected
  • Saudi Arabia would be willing to work with other producers but won't balance market alone - Aramco chairman
  • BOE's Weale: Expects pickup in UK unit-wage costs
  • Philly Fed Jan business outlook -3.5 vs -5.9 expected
  • Initial jobless claims 293K vs 278K expected
  • UK's Cameron says there's a possibility of getting a deal from Feb EU meeting
  • More from Lew: Strong dollar reflects strong US economy

Markets:

  • US 10-year yields up 5 bps to 2.03%
  • S&P 500 up 9 points to 1869
  • Gold flat at $1101
  • WTI crude up $1.50 to $29.85
  • Commodity FX leads, JPY lags

It was another rollercoaster as Draghi surprised with a strong hint that the ECB will do more in March. The euro dropped 150 pips in a flash but the spike bottom was the low for the day. Th euro eventually recovered nearly all the decline and recovered to 1.0900 before a late slip to 1.0871.

Cable finally staged a comeback and it was an impressive one as it touched a fresh long term low below 1.41 and then shot back to 1.4250 before settling near 1.4217.

USD/CAD fell more than 200 pips as the entire commodity block soared around 1.5%. Oil was the catalyst as it surged 5.3%.

USD/JPY also finished at the highs as bonds sold off. The stock market rallied early but gave back most of the gains for a modest