Forex news from the European morning session 3 Feb

News:

  • Oman says OPEC meeting "will be soon"
  • Japan's Abe says BOJ decide monetary policy steps
  • BOJ's Kuroda says it will be natural for rates to rise if JPY600trln GDP target approached
  • Xu says unstable global economic conditions will impact China in 2016
  • China planning to loosen limits on foreign fund outflows - Livesquawk
  • Juncker says EU Commission supports Tusk proposal to UK
  • Cable peeps over 1.4500 as it chews through the offers
  • China's equity markets close lower 3 Feb
  • Option expiries 10am NY cut today 3 Feb

Data:

  • January 2016 UK Markit CIPS services PMI 55.6 vs 55.3 exp
  • December 2015 Eurozone retail sales 0.3% vs 0.3% exp m/m
  • January 2016 Italian HICP flash 0.4% vs 0.3% exp y/y
  • US MBA mortgage applications -2.6% vs +8.8% prior
  • Eurozone Markit services PMI Jan final 53.6 as flash
  • Germany Markit services PMI Jan final 55.0 vs 55.4 flash
  • France Markit services PMI Jan 50.3 final vs 50.6 flash
  • Italy services PMI Jan 53.6 vs 55.3 exp
  • Spain Markit services PMI Jan 54.6 vs 54.3 exp

Lots going on again with oil and equities still the main attraction overall but it's the pound that's caught the eye this morning after better than expected UK services PMI.

We had softer equity markets in Asia and that weighed on USDJPY, continuing to do so down to 119.23. European markets opened softer putting a bid under the euro again with EURUSD finding good demand into 1.0900.

Oil has firmed on renewed hope of an OPEC meeting and that has given USDCAD a decent push down to 1.3914 from 1.4100 accelerated by losses through 1.3980. CAD pairs across the board have taken a tumble. The commodity-positive tones have also helped AUDUSD up to 0.7077 from 0.7010 and put a bid under NZDUSD.

It's the pound though that's stolen a few headlines as recent highs on GBPUSD into 1.4450 have been breached to climb steadily to 1.4505. EURGBP in turn has reversed earlier euro-led gains into 0.7600 to turn sharply lower through strong support around 0.7550 to post0.7528 so far.

Tomorrow sees the release of the latest BOE MPC interest rate decision/voting/Minutes and traders will be rightly cautious though of getting too carried away before then. I shall be posting a few thoughts on the outcome/scenarios in due course.

USDCHF has fallen on the generally US$-bearish sentiment and EURUSD demand and EURCHF has found a few sellers again although it remains supported in the dip below 1.1100 as I type.

ADP jobs report and PMIs are the US data focus as the markets start to weigh in the NFPs on Friday.

Lively markets to continue.