Forex trading headlines from the European morning session 20 August
News:
- Bank of England MPC votes 2/7 to hike rates
- BOE MPC Minutes: Most MPC see merit in waiting for firmer evidence that wage growth will come before raising rates
- France’s Hollande says euro is still overvalued
- Germany prepared to send arms to Iraq
- BOJ says governor Kuroda will attend Jackson Hole meeting
Data:
- Eurozone construction output June m/m -0.7 % vs -1.4% prev
- German producer prices July mm -0.1% vs 0.0% exp
- August 2014 UK CBI industrial trends survey orders 11 vs 4 exp
- US MBA mortgage market index 342.4 vs 337.7 prior
- Nikkei closes up 0.03% at 15454.45
The greenback has been consolidating and advancing overnight gains but we’ve also seen the pound stage a decent rally on the MPC vote showing two in favour of a 0.25% hike
No great surprises in that as per my preview but it was enough in these fragile markets for GBPUSD to rally to 1.6680 from 1.6625 having seen the 1.6600 barrier hold earlier losses but then dropped back to 1.6628. EURGBP dropped from 0.7998 to 0.7970 triggering stops through 0.7980 along the way. Elsewhere the pound enjoyed a similar roller coaster journey
EURUSD finally gave up the barrier demand around 1.3300 and we’ve been to 1.3275 so far while USDJPY has made further gains to 103.41 but stalling ahead of decent offers into 103.50
USDCHF has been chewing through the offers into 0.9125 with EURUSD falling but it too is stalling for the moment as EURCHF remains around 1.2105
AUDUSD and NZDUSD have remained on the back foot after the Asian zone losses while USDCAD has made gains to 1.0964 from 1.0940 but large offers into 1.1000 loom large again.
Attention turns to the FOMC Minutes at 18.00 GMT and we can expect scrappy two-way markets in the meantime.
