AUTOREFRESH 
ForexLive European Morning Wrap: Sterling strength very much the main feature
- Merkel: Euro facing biggest challenge ever. No alternative to Greek savings programme. No country can be left alone in euro zone. On Greece, nothing can be done that goes against national law. In future need entry in the treaty that would make it possible as a last resort to exclude a country from euro zone if conditions not fulfilled “again and again over the long-term”
- Shanghai share index up 1.9% after Fed leaves policy stance unchanged
- Russia moves rouble floating trading band to 34.15 vs basket after buying $700 mln. Russian FinMin Kudrin says current exchange rate is justified. Given current oil prices , rouble trend is appreciation. Russia moves second time to move band to 34.10 after buying another $700 mln
- IMF’s Strauss Kahn says a bit worried countries not working together enough on ending crisis
- UK February claimant count -32,300, better than median forecast +8,ooo, biggest fall since November 1997
- Bank of England voted 9-0 in favour of leaving rates at 0.5%, QE at £200 bln in March - Minutes
Good morning for sterling, cable up at 1.5345 from early 1.5225, while EUR/GBP is down at .8985 from early .9057. The trigger for the sterling gains was the better than expected jobs report. Cable buying by a US investment bank in the 1.5210/15 area contained early weakness. The BIS came in buying in 1.5220/25 area minutes before the release of the jobs data. How opportune.
After the release it was basically a moonshot all the way to 1.5380 as sterling shorts were horribly squeezed, before we settled back slightly.
EUR/USD started round 1.3785 which is basically where we sit at writing. It didn’t take long for the euro bulls to take out barrier option interest touted up at 1.3800 and we got to session high 1.3817 before slipping back. More sovereign sell orders tipped at 1.3825/50 with further barrier option interest said to lie at 1.3850.
The pairing did come under some pressure mid morning, reaching session low 1.3761, weighed down by heavy EUR/GBP selling in wake of UK jobs report. Merkel’s comments probably played a little part there as well. BIS was seen buying in low 1.3780′s.
USD/JPY at 90.50, unchanged on day. Reports Japan Post Bank has been buying the pairing today, probably tied to purchases of US treasuries. We remain stuck in well-defined 90-91 range at the present time.
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