Forex trading headlines from the European morning session 25 February
- BOE’s Weale sees earlier rate hike if more rapid wage growth seen
- BOE’s McCafferty says he has concerns if pound rises further
- German Q4 GDP final m/m +0.4% as exp/prev
- Italian retail sales Dec sa m/m -0.3% vs +0.4% exp
- UK CBI distributive trades survey Feb +37 vs +15 exp
- Italian consumer confidence Feb 97.5 vs 98.0 prev
- China’s SAFE still sees “relatively big” 2014 capital inflows
- French business climate index Feb 100.00 as exp vs 99.70 prev
- Nikkei closes up +1.44% at 15,051.60
- Shanghai comp index closes down -2.05% at 2034.22
I’ve been reporting this cable demand since Jan 20th and we’re now arguably into the final execution stages of the price action but in my humble view the impact has been prevalent almost since I first posted.
Anyhow today the talk is once again of large demand into the 16.00 GMT fix today, and correct info or not it’s kept GBPUSD and the pound underpinned in extremely quiet trading ranges, elsewhere too. Caution remains though too after Friday’s rapid collapse post-fix
Cable started off at 1.6670 and failed to break through offers at 1.6685 for a while until one sharp move took those out and the rest at 1.6700 too. High post 1.6706 before renewed selling kicked in helped by comments from BOE’s McCafferty. Since then we’ve sat around 1.6690 ready with the jury still out. I still say once this demand is out the way stand by for a rapid drop in current scenario elsewhere. A GBP 500mln expiry today at 1.6650 always playing its supporting role.
EURGBP has been offered given the pound demand but also weighed by a large option expiry at 0.8260 and we’ve seen a move down to 0.8228 from 0.8252 before finding some buyers.
EURUSD had a rally to 1.3763 from 1.3738 but once again found offers at 1.3770 a step too far while USDJPY drifted lower from 102.50 to 102.24 as Nikkei futures sold off. USDCHF once again has found itself on the back foot and been to 0.8863 from 0.8880 having failed to hold yesterday’s gains over 0.8900.
USDCAD has been pinned around 1.1070 having failed to break below strong bids at 1.1050 while AUD and NZD have also enjoyed the commodity ccy love-fest currently going on without making any further headway in real terms.
Opportunties for intra-day jobbers but painfully quiet for the rest. I can’t see that scenario changing just yet.