Forex news from the European morning session 14 Mar

News:

  • Japan's Hamada says current yen level not too strong versus US$
  • ECB's Villeroy says their determination to act is strong
  • China's NBS says inflation stable but still far from 3% government target
  • Meeting between oil producers on output freeze likely to take place mid-April
  • German government to continue with existing refugee policy despite yesterday's election results
  • DAX retreats after posting 2-month highs
  • Central bank devalues Egyptian pound as US$ squeeze continues
  • Option expiries 10am NY cut today 14 March
  • Goldman Sachs see further yuan weakness
  • Nikkei 225 closes up +1.74% at 17,233.75
  • Chinese equity markets pare some gains into the close 14 March

Data:

  • Eurozone industrial production Jan mm SA +2.1% vs +1.7% exp

A new week and another bit of euro bashing as the DAX posts solid gains and Merkel takes a hit in the regional elections.Overall though it's been a relatively sedate session with central banks very much in focus this week.

What started out as a cautious start soon trickled into a steady stream of euro selling as the DAX caught a bid to send it up through 10000 for first time in 2 months and we saw EURUSD reverse some Asian gains to trade back down through 1.1150 then 1.1130 to test some good option-related demand around 1.1100.

EURGBP fell down through 0.7750 after strong resistance around 0.7770 and we've posted 0.7736 only wiping its feet around 0.7750. The fall in the pair gave GBPUSD a nice kick bsack up to 1.4383 in a rush having followed EURUSD limply down prior. Good supply/res into 1.4400-20 continues to cast a shadow

Year-end yen demand remains in play and after failing to hold 114.00 in Asia we've had USDJPY test 113.50 accelerated by comments ( see above) from Hamada. EURJPY has needed no encouragement to make its way steadily down to 126.21 so far with yen pairs generally all lower too.

The Asian love for the Aussie$ has not been shared by those in Europe and AUDUSD has made a one way retreat to 0.7518 from 0.7593 as AUDJPY selling helps it on its way. USDCAD had a move back up to test 1.3280 offers as oil fell back from earlier highs but we've still seen decent demand into 1.3220

Nothing of note by way of data today but we welcome our NA readers and traders one hour earlier until March 27. That means for Europe and others the option expiries come around 1 hour earlier too. Today's large interest at 1.1100 is definitely in play.