Forex news and economic trading headlines 21 July 2016

News:

  • Yen demand prevails on reports of BOJ hesitation on further easing
  • BOJ's Kuroda says there is no need/possibility for helicopter cash
  • USDJPY breaks down through 105.80 and triggers stops to 105.42
  • King Kuroda pops some bubbles
  • Yen pairs on the rise again as BBC say the Kuroda interview was in June
  • ECB Preview: Focus will be on Brexit and Italian banks say UBS
  • ECB Preview: Here's what your favourite banks are looking for today
  • Greece is discussing detailed debt relief measures
  • Turkey's Simsek says they will use emergency state powers in a measured way
  • Option expiries 10 am NY cut today 21 July
  • Nikkei closes up +0.77% at 16,810.22

Data:

  • June 2016 UK retail sales -0.9% vs -0.6% exp m/m
  • UK PSNBR June GBP 7.31bln vs 9.2bln exp
  • Switzerland trade balance June CHF +3.55bln vs +3.78bln prev
  • France manufacturing confidence July 103 vs 101 exp
  • Spain trade balance May EUR -940.9m vs -640m prev
  • Japan All Industry Activity Index May mm -1.0% vs -1.1% exp
  • Japan supermarket sales June yy -0.5% vs -1.3% prev

The ECB announcement looms large but it's all things yen that has dominated the landscape and price action.

USDJPY began on the back foot as the Nikkei pared earlier gains but then both staged a rally with USDJPY posting 107.24 from 106.87. Talk then did the rounds concerning the BOJ weighing up the current policy/potential easing and we saw yen pairs retreat.

Then came headlines from a BBC radio interview which Kuroda ruled out any chance of helicopter money and the algos went into panic/plunge mode sending USDJPY from 106.80 to 105.85 in moments. Recent line in the sand 105.80 soon gave way triggering stops to 105.42 with yen pairs in similar freefall.

GBPJPY supply gave an extra kick lower to GBPUSD already under pressure from soft UK retail sales and we saw 1.3154 in a rush having already broken back down through 1.3200.

Then came headlines that the Kuroda comments were in fact from an interview conducted on 17 June and the algos went into reverse sending yen pairs rapidly higher with USDJPY leading the way back to 106.30 from 105.45 in moments.

AUSD,CAD,NZD and CHF all caught up in the mayhem while the euro pairs all had one eye on the ECB decision but with option related support at 1.1000 providing a good base.

Bring on Draghi & Co