Forex news from the European morning session 11 August

News:

  • Greek deal reached and bailout talks have been concluded
  • EU confirms that Greece and creditors have agreed on terms for third bailout deal
  • Greek deal will see banks recapitalized by end-2015
  • Greek parliament to vote on new bailout deal on Thursday
  • ECB leaves ELA for Greek banks unchanged for next two weeks
  • PBOC says yuan change is a one-off move
  • EU says China's decision re yuan is a "positive development"
  • CIBC HK says PBOC devaluation will enhance yuan use
  • Is China's yuan devaluation more important to the global economy than a US rate hike?
  • OPEC raises 2015 forecast of world oil demand growth by 90k bpd
  • Option expiries 10am NY cut today 11 August

Data:

  • German ZEW survey economic sentiment August 25.0 vs 31.9 exp
  • German wholesale price index July mm +0.1% vs -0.2% prev
  • Italian CPI July mm final -0.1% vs -0.1% exp
  • Chinese July vehicle sales fall 7.1% yy
  • US small business confidence index up +1.3 to 95.4 in July
  • Japanese machine tool orders July yy flash +1.6% vs +6.6% prev
  • Nikkei 225 closes down -0.42% at 20,720.75

It's been busy session with traders still unsure of the real impact of the yuan devaluation sprung on them by the PBOC overnight, but also having to weigh up the euro strength on the news that a third Greek bailout deal has now been agreed

Following on from the post-PBOC USD rally we saw EURUSD down to 1.0960, GBPUSD to 1.5555, with AUDUSD testing 0.7300 option expiry interest and USDJPY up to 125.08

But then the tide turned and eventually, after little initial impact on the Greek deal news, we saw a strong rally for the euro with EURUSD finally coming to a halt into res/offers at 1.1050, EURGPB at 0.7080 and EURJPY at 138.00

Since then we've been treading water with a softer German ZEW reading for expectations providing a bit of a reality check

GBPUSD has joined in the USD reversal to post 1.5616 only to fall back while USDJPY has fallen to 124.75 before finding bids again. USDCHF has been underpinned again and forged higher to 0.9860 res/offers with EURCHF posting 1.0868, fresh highs since the Jan 15 lows

The AUDUSD rally peaked at 0.7355 while NZDUSD found itself on the backfoot around 0.6555 after its post-PBOC fall from 0.6633

USDCAD has been capped below 1.3100 but has bids around 1.3000 and since bounced to 1.3050

Busy/scrappy but pips to be had nonetheless