Forex news and trading headlines 5 Jan 2016
News:
- Norway's Solberg fears "very hard Brexit"
- USDJPY stages an impressive recovery after holding 115.50
- UK official reserves Dec change USD +29m vs -1.83bln prev
- Yuan continues to strengthen
- Nikkei 225 closes down -0.37% at 19,520.69
Data:
- December 2016 UK Markit CIPS services PMI 56.2 vs 54.7 exp
- November 2016 Eurozone PPI 0.3% vs 0.1% exp m/m
- Eurozone Markit retail PMI Dec 50.4 vs 48.6 prev
- Germany Markit construction PMI Dec 54.9 vs 53.9 prev
- Swiss CPI data throws up little of note but still in negative mode
A lively session that picked up on Asian USDJPY selling and yen demand in general as depo rates for offshore Chinese yuan rocketed to almost 100% but then came solid reversals.
USDJPY opened around 116.20 but after a quick run up into 116.50 we saw a steady fall then accelerating through 116.00 to post 115.58 as those yuan depo rates hit their highs and both onshore and offshore yuan saw strong gains vs USD.
Yen demand capped core pairs, which had enjoyed good USD selling into and post-FOMC, as GBPJPY fell to 142.50 and EURJPY to 122.16 to name just two. GBPUSD therefore ran into sellers above 1.2350 and with EURUSD finding some inherent demand we saw EURGBP rally helping to push cable down to 1.2270.
Better UK services PMI put the brakes under further falls and we've since seen 1.2324 and 0.8518 from 0.8580.
As yuan depo rates topped so we saw yuan weaken again and that sent USDJPY racing from 115.58 to 116.25 and since rallied to 116.80 before running into fresh supply. EURUSD meanwhile fell back on the renewed USD demand and posted 1.0483 from 1.0560 and we saw similar reversals in other USD pairs.
AUDUSD failed at 0.7330 and fell to 0.7284 while USDCAD rallied from 1.3254 to 1.3313 before capping.
Oil prices have made some decent gains in the second half of the session while equities have generally looked soggy.
A roller-coaster ride for ccys so far in 2017 and it's not going to change any time soon.
