Forex news and economic trading headlines 19 July 2016

News:

  • UK's Hammond says Brexit represents a shock to the UK economy
  • UK government lawyer says Article 50 not being invoked this year but position could change
  • Moody's say UK creditworthiness under downward pressure post-Brexit
  • S&P says Brexit likely to cause a cut in Eurozone GDP by 0.8% in 2017-18
  • EU Commission says increased uncertainty post-Brexit is weighing on growth outlook
  • BOE's Woods says PRA paying close attention to UK housing market
  • ECB lending survey sees corporate and household demand rising further in Q3
  • Turkish central bank leaves key rate unchanged but cuts overnight lending rate by 0.25 %
  • AUDUSD continues its journey south after RBA hint at rate cut
  • Option expiries 10 am NY cut today 19 July
  • Nikkei 225 closes up +1.37% at 16,723.31

Data:

  • UK CPI June mm +0.2% vs +0.2% exp
  • UK PPI output June mm NSA +0.2% vs +0.2% exp
  • Germany ZEW July survey current situation 49.8 vs 51.8 exp
  • Eurozone construction output May mm -0.5% vs -0.3% prev

It's been all about the pound again in what essentially has been a subdued session as summer markets start to take hold.

A quiet opening stated to liven up as equity markets started to fall and that led to a bit of risk-off yen demand which saw USDJPY fall back from 106.12 highs achieved as the Nikkei closed near highs. That yen demand saw a return to 105.80 with GBPJPY once again a primer mover sending GBPUSD through stubborn (option expiry related) support at 1.3200 to post 1.3174 in a rush.

Demand down there saw GBP pairs all catch a bid accelerated by slightly better UK inflation data but with the main BOE-affecting July report still to come sellers were quick to jump back in at 1.3220. EURGBP has found good offers/res at 0.8400-05 but has found demand into 0.8380 since. The pound got a further kick lower on comments by UK fin min Hammond that the initial response to post-Brexit shock must come from the BOE. GBPUSD posted lows of 1.3156 but EURGBP still capped at 0.8404

USDJPY has made its way higher again to 106.25 in what has been a generally USD positive session that's seen USDCHF nudge higher to 0.9847 from 0.9820. USDCAD has been mostly underpinned by softer oil after initial gains.

AUDUSD has remained on the back foot after its Asian retreat on dovish RBA Minutes but found support below 0.7500 while NZDUSD too has been under pressure.

A session that's moved in fits and starts but provided plenty of opportunity for the intra-day trader at least.

US housing data out at 12.30 GMT the next calendar risk event.