Forex news for February 11, 2015:
- Euro rallies, Greece and Europe said to move toward bailout extension
- EU's Dijsselbloem says Eurogroup will listen on Greece
- Fisher says early and gentle rate rises have been wise
- Fisher favoured a March rate liftoff but lost the argument
- Fed's Bullard says they may need to vary the pace of bond run off
- BOJ's Sato tells us to expect the Japanese economy to continue moderate recovery
- US EIA crude oil inventories 4868K vs 3612K expected
- Preview - Will the Bank of England look through falling inflation to signal rate rises in quarterly report?
- US reports January budget deficit of $17.5 billion
- Gold down $13 to $1220
- WTI crude oil down 63-cents to 49.39
- S&P 500 flat at 2068
- US 10-year yields flat at 2.00%
- USD & GBP lead, AUD lags
US dollar strength was the story once again as the break higher in USD/JPY continued through 120.00 and to 120.44 in a 100-pip rally on the day. There was no particular catalyst but some market watchers pointed to the comments from Sato.
In general, when the US dollar is strong, the euro is weak. That's especially the case with Greek headlines lurking in the background but it wasn't the case today as the euro generally kept pace with the USD. The range was 1.1280 to 1.1320 and it's the third day of low volatility. It ends the day near the highs at 1.1316.
Cable was in the drivers seat in Europe as a wave of buying boosted it to the cusp of 1.5300 but it stalled there and had a nasty fall all the way to 1.5220 on the USD strength before a dead-cat bounce to 1.5245.
Oil inventory data boosted USD/CAD to 1.2700 as oil touched $48.00. The market wasn't comfortable up that high and oil bounced to send USD/CAD back down to 1.2622. All week I've been writing about the wedge breaks in USD/CAD and USD/JPY.
Australian dollar traders were joking about a leaked jobs report as AUD/USD went into freefall down briefly below 0.7700 before a mild rebound to 0.7717. It will be the lowest close of the cycle.
Gold fell to $1217 as the tail risks from Greece faded on the extension talk late in the day and that helped break the 61.8% retracement of the 2015 rally in a bearish signal.
