Forex news and economic data headlines 19 October 2016

News:

  • No easing from the BOJ expected in Nov - Kyodo
  • USDJPY continues it's journey lower but option-related support nearby
  • USDJPY breaks lower as yen demand prevails
  • Germany said to close the door to back channel Brexit negotiations - Bloomberg
  • Stronger price pressures weigh on UK households’ financial outlook - Markit
  • GBPUSD finds support below 1.2280 as range-trading continues
  • Preview: What are the banks looking for from the Bank of Canada today ?
  • Buba's Dombret says the solvency and liquidity of German banks is beyond doubt
  • EU US TTIP trade deal is on the rocks says EC
  • We are now at the end of a considerable downturn says Saudi energy minister

Data:

  • September 2016 UK claimant count 0.7k vs 3.0k exp
  • August 2016 Eurozone construction output -0.9% vs 1.8% prior m/m
  • Japan all industries activity index Aug mm +0.2% vs +0.2% exp

Range-trading still the order of the day by and large but we have seen USDJPY drop down through recent lows of 103.50 as yen demand prevails, helped by reports of BOJ staying on hold.

Yen pairs were drifting lower from the off after USDJPY failure to get back above 104.00 and we've a continuation pausing for breath at 103.50 then accelerated by reports of the BOJ keeping rates/policy on hold in November.

The pound has had another roller-coaster ride in relatively tight ranges with stronger UK jobs/wages data pushing GBPUSD to test 1.2330 after an early look at 1.2250 then Brexit-based comments sending it back below 1.2280 in a rush only to run into fresh demand.

The euro has remained mainly on the back foot led by EURJPY selling but with good two-way on EURGBP limiting losses or indeed gains on EURUSD where a brief look above 1.1000 has given way to a retreat back toward 1.0974 lows.

Aussie, Kiwi and Canadian $ have all been trading at the behest of cross-ccy JPY flows resulting in core USD pairs finding rallies easily capped. USDCAD has seen the biggest decline with the BOC decision today in focus at 14.00 GMT

US housing data at 12.30 GMT before that and then a series of US Fed-heads after should keep things ticking over nicely before attention turns to the ECB tomorrow.