Forex news from the European morning session 19 May 2015

News:

  • ECB's Coeure says short-term rate below zero doesn't pose policy problem
  • ECB's Noyer says they are ready to go further if necessary to deliver on mandate to achieve inflation near 2%
  • Greek labour minister says Greece will reach a deal with EU/IMF "within coming days"
  • EU's Juncker rules out possibility of Greek aid deal in Riga
  • The ECB would not cut ELA support to Greece if it misses an IMF payment
  • Enjoy low prices while they last says Bank of England's Carney
  • EURUSD torpedoed by front running ECB
  • Heads up for NZD traders - Global Dairy Trade auction today, from 1200GMT
  • Option expiries 10am NY cut today 19 May

Data:

  • April 2015 UK CPI -0.1% vs 0.0% exp y/y
  • UK PPI April input nsa mm +0.4% % vs +0.8% exp
  • April 2015 Eurozone HICP final 0.0% vs 0.0% exp y/y
  • German ZEW current situation May 65.7 vs 68.0 exp
  • Eurozone trade balance SA March EUR +19.7bln vs +21.9bln exp
  • Nikkei 225 closes up +0.68% at 20,026.38

If yesterday was a warm-up for the week ahead then we've wasted no time this morning in seeing markets in volatile mood after ECB comments then UK inflation data kicked the Euro and Pound lower again

Another quiet start was thrown into turmoil around 07.00 GMT on release of the text of a speech made last night in London by ECB's Benoit Coeure and talking of front-loading QE purchases to compensate for summer illiquidity. And to add fuel to the fire we had BOF gov Noyer suggesting that they wouldn't shy away from additional easing measures if needed.

These are fragile markets and the comments were more than enough to send the euro tumbling with EURUSD posting lows of 1.1160 from 1.1300, EURGBP to 0.7150 from 0.7210 and EURJPY to 133.93 from 135.60.

And if this wasn't enough to keep us busy out came the latest UK inflation data which saw CPI in negative territory for the first time in recent times sending GBPUSD down to 1.5540 from 1.5600 having already fallen with EURUSD to a degree and now down through 1.5500 as I type

In a roller coaster ride EURGBP has bounced back to 0.7225 helping to put a bid under the euro generally with EURUSD rallying above 1.1200 and EURJPY back to 134.60 helped by USDJPY clawing its way back above 120.00

USDCHF had a sharp rally to 0.9364 before an equally sharp tumble lower again while USDCAD had a look at 1.2200 from 1.2140 but now back to 1.2170 as the weight of sellers prevailed at the highs

AUDUSD and NZDUSD have been mostly on the back foot having tried unsuccessfully to rally back above 0.8000 and 0.7440 but both finding a few bids in the dips

Expect more volatility as the day continues