ForexLive European Morning Wrap: Sterling weakness a feature

• German government spokesman:  No political decisions to be made on Monday on euro zone aid for Greece.  Not talking about possible financing for any EMF.  Greece has not asked for aid, is working on its debt problems itself
• Japan MOF’s Noda: Hopes BOJ will take appropriate policy steps in view of economic situation
• Japan government upgrades economic assessment for first time since July 2009. Economy has been steadily picking up. Raises assessment on personal consumption, capex
• Shanghai share index down 1.2%, lowest close in 5 weeks
• Swiss February producer/import prices -0.3% m/m, -1.0% y/y
• Euro zone Q4 2009 employment -0.2% q/q, -2.0% y/y
• Japan FinMin Kan:  Yen relatively stable now. Concerns remain that euro’s woes could effect yen
• BOE’s Barker: Possible Uk may have a quarter when GDP falls, but no double dip. Recovery will be bumpy, fragile

Bad morning for sterling, cable down at 1.5045 from early 1.5160, while EUR/GBP is up at .9118 from early .9060.  The move comes with worries over a hung parliament exacerabated by weekend polls; warning from Moody’s re Uk’s AAA rating; downbeat comments from BOE’s Barker; and poor UK housing data from Rightmove,  the +0.1% m/m rise in March being the lowest recorded for the month.

Cable, and sterling in general, started out on the front foot however, cable fleetingly above 1.5200, EUR/GBP down to .9047.  Given the raft of poor news the move was a little baffling and sources cited decent cable buying from Eastern Europe.  Some also seemed to take solace in the Moody’s comments, but I couldn’t quite see that myself.

Talk UK clearer was an aggressive cable seller during the session, mutterings it was tied to Prudential’s purchase of AIA.

EUR/USD little easier, but not by much.  EUR/USD sits at 1.3724 having been as low as 1.3699 after stops tripped through 1.3720.  Comments from German spokesman and others re Greek aid have been duly noted (see above).  Talk of sovereign sell interest up at 1.3800 and again up at 1.3830/50 will be adding note of caution to euro bulls.

USD/JPY very marginally firmer, up at 90.70 from early 90.57.  The pairing remains fairly well underpinned ahead of  BOJ’s meeting later in the week.  Sell orders seen 90.80/00, stops just above there.

EUR/CHF has continued lower, presently down at 1.4533 from early 1.4560 as the SNB stays at home.