Forex news from the European morning session 18 December 2014
News:
- SNB sets negative rates on sight deposits
- SNB’s Jordan says they are committed to purchasing unlimited quantities of FX to enforce cap
- SNB had to intervene in FX markets in last few days says Jordan
- The SNB is ready to take more measures if required
- Jordan: Swiss Franc is still high
- Swiss govt lowers 2015 growth forecast to 2.1% vs 2.4% prev
- Swiss franc falls as SNB introduces negative interest rates
- Is the SNB front running the ECB and where is EUR/CHF going now?
- Putin says its possible that further oil price drop will weaken rouble further
- Putin says current economic situation is provoked by external factors
- Central bank should have acted faster and harder on ruble says Putin
- Putin says Russia is more and more determined to protect its interests
- IFO says ECB cash injection will have no direct effect on German economy
- Saudi oil minister says oil market problem is temporary
- Merkel says Eurozone economic recovery remains fragile
- Schaeuble says Greece is on a good track
Data:
- UK retail sales Nov mm +1.6% % vs +0.4% exp
- German IFO business climate index Dec 105.5 vs 105.5 exp
- November 2014 eurozone construction output +1.3% vs -1.8% prior m/m
- Swiss trade balance Nov CHF +3.87bln vs +2.92bln exp
- Nikkei 225 closes up 2.32% at 17210.05
The volatility shown in recent sessions has continued today with the SNB cutting the LIBOR range and imposing negative rates on sight depos in what we consider to be pre-emptive strike ahead of the ECB in Jan ( see articles above)
USDCHF rallied from 0.9740 to 0.9849 before falling back all the way to 0.9760 and EURCHF from 1.2010 to 1.2098 then back to 1.2030 as CHF shorts said thank-you for the early Xmas pressies. There was wiping of feet both up and down but the moves didn’t take long to happen and we’ve spent the rest of the morning evaluating the fall-out.
GBPUSD and EURUSD both had a wobble lower at USDCHF went racing north and we saw 1.5550 and 1.2278 before a wave of buying again as first USDCHF came tumbling back down, then traders bought GBPUSD back to 1.5635 ahead of UK retail sales data with EURGBP dropping to 0.7862 from 0.7910.
EURUSD has also rallied to 1.2338 before dropping again in what has been a real roller coaster ride of a morning
AUDUSD has maintained a bid tone for most of the session but hasn’t been able to clear the 0.8200-10 hurdle while USDCAD fell to 1.1568 from 1.1640 as oil prices firmed. NZDUSD had a run up from 0.7710 to 0.7762 before fading.
So, the SNB finally delivered something after all the rhetoric, but the jury is now out again as to its impact.
