Forex news from the European session 16 Nov

News:

  • Eurozone challenges are more acute than elsewhere says ECB's Constancio
  • More from Constancio: ECB aim is to be closer to 2% inflation target by 2017
  • China faces dilemma of effective monetary policy and ensuring financial stability
  • Bundesbank says the pace of German growth could hold until end-2015
  • UAE central bank governor says exchange rate peg with USD is their "continued commitment"
  • French government knew that attacks were being planned
  • 104 people placed under house arrest and weapons found says French interior minister
  • Bomb disposal unit dealing with suspect car near EU Commission
  • Russia says excessive global oil supply could be eliminated in H2 2016
  • China and Taiwan to hold talks on goods-trade deal
  • IMF senior official says US Fed's expected rate lift-off will have very limited repercussions
  • IMF says it's too early to tell whether Japan needs further monetary and fiscal stimulus
  • NZD tumbles further with tomorrow's GDT auction in the frame
  • USDJPY pops 123.00 as yen loses its safe-haven flavour
  • Japanese corporates helping to put a cap on USDJPY
  • Euro resilient in the face of adversity
  • Option expiries 10am NY cut today 16 Nov

Data:

  • October 2015 Eurozone HICP final 0.1% vs 0.0% exp y/y
  • China non-financial outbound direct investment Jan-Oct +16.3%
  • Nikkei 225 closes down -1.04% at 19,393.69

In the wake of the truly awful events in Paris on Friday, European desks have been making their own minds up following a rush to safe-havens in Asia

The euro had already found some consolidation in late-Asia trading and when European equity markets opened lower we saw EURUSD up to 1.0757 from 1.0725 with EURGBP climbing to 0.7078 from 0.7045.

EURJPY started off on the back foot with USDJPY near its lows at 122.40 but as confidence returned to trading desks so we saw the yen lose its safe-haven demand and yen pairs have made strong gains throughout the morning with USDJPY posting 123.13 and EURJPY 132.22 from 131.30

Euro gains have been pared a little though as equities flirt with attempts to turn positive.

GBPUSD found itself on the back foot as EURGBP demand kicked in and we saw a test of 1.5180-85 support lines from 1.5210

USDCHF and EURCHF have both been caught in the cross-play cross fire and mostly traded around 1.0050 and 1.0800 respectively

NZDUSD has tumbled further to 0.6478 after capping at 0.6540. Fears of another weak GDT auction tomorrow is undermining the Kiwi while AUDNZD and AUDJPY demand is helping AUDUSD to find some support into 0.7100 from highs of 0.7130

USDCAD has traded tightly, first dipping to 1.3290 from 1.3320 on firmer oil then back to 133.25 on stronger USD

So we wait to see how the rest of the day pans out but traders are understandably cautious . Markets were fragile enough ahead of Friday's tragic events and now will remain even more nervous