Forex news and economic trading headlines 28 July 2016

News:

  • Abe's stimulus package is expected to include around JPY 7 trln in spending
  • Lloyds Bank to close 200 branches and axe 3000 jobs
  • EURGBP demand continues to cap cable
  • Large AUDUSD option expiries today cast a shadow
  • Moody's say severe recession would deplete capital of UK banks but from a higher starting point
  • Option expiries 10 am NY cut today 28 July
  • Nikkei 225 closes down -1.13% at 16,476.84

Data:

  • Germany unemployment change July -7k vs -4k exp
  • Eurozone economic confidence July 104.6 vs 103.50 exp
  • Saxony CPI July mm +0.3% vs +0.1% prev
  • Baden-Wuerttemberg CPI July mm+ 0.3% vs +0.0% prev
  • Brandenburg CPI July mm +0.5% vs +0.1% prev
  • UK Nationwide HPI July mm +0.5% vs 0.0% exp
  • Spain Q2 unemployment rate 20.0% vs 20.3% exp
  • Italy hourly wages June mm +0.2% vs 0.0% prev

A steady session overall in the aftermath of last night's Fed decision but one that's seen the pound on the back foot again with EURGBP month-end demand in focus.

The session began with USDJPY and the greenback in general in retreat still as USJPY posted 104.49 amidst general yen demand. That gave GBPJPY a nudge and we were soon seeing GBPUSD back down through 1.3200 from 1.3230, triggering stops to post 1.3170 in a rush. The move was accelerated by the usual month-end EURGBP demand, or at least the anticipation of it as the pair burst up through 0.8400 to post 0.8420.

That being done though it wasn't long before cable was back above 1.3200 posting 1.3217 on the general USD supply only to be slapped back down again to 1.3180 then 1.3160 as the EURGBP buyer returned to buy it up from 0.8412 to 0.8438. Further cable selling going on as I type with 1.3150 support under threat.

It's been a session of euro demand overall with funding ccy status also providing support but as NY get to their desks we're seeing some USD buying again that's knocked EURUSD down to 1.1085 after 1.1119 highs.

AUDUSD looks well supported by large option expiry interest at 0.7500 and has hardly budged in this latest move lower in other pairs. USDCAD has found support at 1.3100 and now enjoying the rally to 1.3167 while NZDUSD has largely been in retreat and now testing 0.7080 from 0.7120.

German CPI still to come but the regionals have shown stronger readings and that's followed by US initial jobless claims.

Market not needing data to have some fun though still.