ForexLive European Morning Wrap: USD weaker

• Yellen said to be Obama’s pick for Fed Vice Chairperson
• Angus Reid poll shows Tories stretching poll lead out to 13 points.  This poll has consistently had oppostion with bigger lead over government than other polls
• German February wholesale prices +0.1% m/m, +2.1% y/y vs median forecasts +0.3%, +2.3% respectively
• Russia CBank moves floating rouble band boundary to 34.25vs basket from 34.30 after buying $700 mln – dealers
• China’s Customs Authority:  To keep stable yuan. Disputes about yuan exchange rate are increasingly sharp.  US exports strategy poses threats to China’s goal of maintaining global market share
• Euro zone January industrial output +1.7% m/m, +1.4% y/y, demonstrably stronger than median forecasts of +0.7%, -1.9% respectively
• BOE’s Dale:  Pause in monetary loosening does not mean loosening has come to an end
• ECB’s Provopoulus: Greek GDP to contract around 2% in 2010, austerity steps to hit growth.  Confident Greece will cut deficit below 3% of GDP by 2012

The USD has seen some across the board slippage. Some have cited reports Janet Yellen is Obama’s pick for Fed  vice chairperson as one of the reasons for this bout of weakness. She is a noted monetary dove. In her most recent speech she said the economy will operate below potential this year and next and still needs low interest rates saying “This is not the time to be tightening.” Oh well it’s a reason of sorts I guess.

EUR/USD presently at 1.3765 having started out around 1.3695 and has been as high as 1.3796.   Asian sovereign buying seen early.  We got to around 1.3725/30 where Russia was a notable seller stalling the rally. But not for long.  We were soon through touted sell orders at 1.3730/50, tripping stops just above and making it to just shy of 1.3800 where sovereign sell orders had been cited earlier in the day.

Traders were quick to note a US investment bank putting out a long EUR/USD recommendaton, target 1.4500, stop 1.3500.  The release of demonstrably stronger than expected euro zone industrial output data certainly helped provide underpinning.

Cable up at 1.5155 from early 1.5065, but slightly off session high 1.5172.  Asian sovereign seen buying early.  Market noted the Angus Reid poll showing Tories extending poll lead out to 13 points.  The pairing did swoon when comments from BOE’s Dale hit the wires, the MPC member opining that the QE pause doesn’t mean it has come to an end. We went quickly from around 1.5155 to 1.5135 before recovering just as quickly.

USD/JPY down at 90.45 from early 90.60 having been as low as 90.18 at one stage.

EUR/CHF down on the day. Started around 1.4618 and fell quickly.  It made it all the way to 1.4581 with a Swiss commercial bank a notable seller managing to run through reported  SNB bids in the 1.4590/95 area.  We’re presently at 4588.

USD/CAD sharply lower, down at  session low 1.0157 from early 1.0235, with decent stops tripped on move through 1.0200.  Move coincided with release of latest Canadian jobs data.