Forex headlines for April 7, 2014:
- ECB ready to act swiftly if needed says Constancio
- Constancio: Extraordinary policy cannot be considered lightly
- ECB’s Nouy: the state of European banks is better than markets think
- Bank of Canada business outlook for future sales 27.0 vs 29.0 prior
- US sends warship to Black Sea
- G20 financial leaders to agree on more ambitious economic reforms for growth
- US Feb consumer credit $16.489B vs $14.0B expected
- Bullard says he’s worries about low US inflation but it’s ‘poised to go higher’
- Highlights: ECB annual report for 2013
- Australia could curb high-frequency trading with momentary pauses
- Gold down $7 to $1296
- WTI crude down 60-cents to $100.54
- CHF leads, AUD lags
European trading was quiet but fear gripped the bond and stock markets in US trading and that spilled over to FX. Yields moved lower and stocks tumbled but USD/JPY was surprisingly able to hold 103.00 twice. The BOJ meeting in the hours ahead could be a make or break moment for the level.
The beneficiaries of the dollar weakness were the euro and pound sterling. EUR/USD retraced about half of the post-ECB losses but could rise above 1.3749 with offers stretching up to 1.3760. Cable chugged 40 pips higher but stalled at 1.6624 to end a four-day losing streak.
The loonie didn’t mind the ‘risk off’ environment. In Europe, EUR/USD skipped up to 1.1010 from 1.0970 but when the risk trade hit the fan the Canadian dollar was able to take advantage — that doesn’t happen every day. The pair sank to a marginal session low of 1.0962 but couldn’t get below Friday’s low of 1.0957.
AUD/USD was stuck in a 20 pip chop between 0.9254 and 0.9274. It didn’t take many cues from broader markets. Friday’s close was the highest in 4 months but the inability to clearly break 0.9300 is a bit of a red flag for risk trades.
