Forex news for New York trading on March 10, 2016:

  • ECB cuts all interest rates, increases QE to €80bn and announces 4 new TLRTO's
  • Draghi Q&A: ECB doesn't see any need to reduce rates further
  • ECB's Draghi: Stimulus will reinforce momentum of the Eurozone's recovery
  • Draghi Q&A: We'll buy investment grade bonds of non-financials
  • Draghi on TLTRO's: Banks who lend more can borrow more
  • Full forecasts: ECB sees 0.1% inflation in 2016 vs 1.0% in December

Other news

  • Initial jobless claims 259K vs 275K expected
  • US Feb monthly government budget statement -$192.6B vs -$196.3B exp
  • US sells 30-year bonds at 2.720% vs 2.730% WI
  • Slippery Dave tries to bend Carney's Brexit words in his favour
  • How hackers stole $81 million from the Bangladesh central bank
  • OPEC non-OPEC meeting a dud unless Iran takes part in freeze - Reuters
  • Canada Q4 capacity utilization 81.1% vs 81.7% expected
  • Canada Jan new house price index +1.8% vs +1.8% expected

Markets

  • Gold up $17.51 to $1270
  • WTI crude oil down 36-cents to $37.93
  • S&P 500 down 2 points to 1987
  • US 10-year yields up 5 bps to 1.93%
  • EUR leads, CAD lags

The euro dropped on a surprise round of rate cuts from the ECB but the shorts were blown out when Draghi said there are no plans for more cuts.

EUR/USD fell as low as 1.0822 in the aftermath of the rate cut and before the press conference. Some shorts began to cover as he started speaking but it wasn't until the Q&A when he said they wouldn't cut rates further if current forecasts hold up that the euro squeeze started. It triggered a total retracement in the initial move first and then a massive squeeze. In all, the turnaround was more than 350 pips to a high of 1.1218.

The ECB announcement whipped around risk trades. The DAX was up as much as 2.8% but finished 2.3% lower as broader markets soured because of the prospects for not as much stimulus. USD/JPY fell to 112.56 from 114.44 in early US trading. Later in the day, the dip buyers stepped in and the pair rallied to 113.15.

Cable was whipped around by EUR/GBP flows and the overall turnaround on the ECB. GBP/USD fell to 1.4117 from 1.4200 before the ECB announcement. When Draghi crushed hopes for even more easing the pair ripped all the way to 1.4317 in a three-part push.

USD/CAD was brought into focus by oil. It shouldn't have been a big surprise that Iran wouldn't agree to a production freeze but headlines that OPEC/Non-OPEC members were going to cancel a meeting in Russia set crude down to $37.19 from $38.32. Poor risk sentiment also hurt CAD along with M&A talk. The pair almost reclaimed all the BOC declines in a run to 1.3398 from 1.3250 but late in the day it slipped back to 1.3338 as oil and stocks rebounded.

AUD/USD finishes the day modestly lower and today's trade was entirely within yesterday's range. A quick pop above 0.7500 was sold hard and it fell to 0.7427.

NZD/USD was also in the mood for consolidation after the big fall on the surprise RBNZ cut yesterday. It ranged in the 0.6650 to 0.6700 area, finishing near the bottom.