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ForexLive European Morning Wrap: Lotta noise, not a lotta change (The Sequel)

|Includes: CurrencyShares Euro Trust ETF (FXE), UDN, UUP
  • John Lewis week to Jan 23 dept store sales up 15.7%
  • Nationwide UK house prices +1.2% m/m, +8.6% y/y, stronger than median forecast +0.3%, 7.3% respectively
  • German FinMin: Economic data point to continuation of recovery, but at slower pace than in mid-2009
  • EU’s Almunia: No risk of Greece default
  • Swedish CBanker Oberg: Some uncertainty exists regarding the extent of as yet unrealised loan losses, particularly in European banks
  • Euro zone December M3 annual growth -0.2% vs median forecast -0.5%
  • Greek FinMin: Greek government will do whatever it takes to bring budget deficit down.
  • Greek PM: He has domestic support for painful budget programme
  • China Customs chief: Pressure for yuan to rise will grow in 2010. Very large imports of energy, mineral prodcue not sustainable
  • China CBank: To maintain ample growth of money, credit. To keep appropriately loose monetary policy in 2010
  • German Ifo institute survey shows fewer firms find credit conditions restrictive in January vs December
  • Euro zone January inflation estimated at 1% y/y vs 0.9% in December, weaker than median forecasts +1.2%
  • Euro zone December unemployment 10%, slightly better than median forecast 10%
  • France’s Lagarde: No euro member state is alone, all are accountable to each other. No bailout system in euro zone, all states must deliver on commitments
  • Swiss KOF leading indicator 1.77 in January, better than median forecast of 1.70
  • Trichet: US authorities say strong dollar is in US interests, I agree. Strong dollar corresponds to overall interest of global economy and of Europe
  • EU commission to publish opinion on Greek stability programme on February 3rd
  • OECD chief Gurria: Central banks should keep interest rates at zero for the best part of 2010. Agrees Greece no threat to the stability of the euro zone. Greek situation under control

Well, bit of a replay of yesterday really. Lotta noise, not a real lotta change. US Q4 GDP eagerly awaited.

EUR/USD sits at 1.3960, marginally higher from an early 1.3935, but off session high 1.3989.  European stocks are up, albeit marginally, and this will have lent some support. There was talk of sell orders lined up at 1.3980 up to 1.4000 and they proved barrier to accelerated topside.

As we slipped back from 1.3989 high BIS buy interest in the 1.3950/60 area has lent support. 

USD/JPY marginally firmer, up at 90.20 from early 89.90 amid talk of month-end demand lined up for todays fix.  Talk of Japanese lifer with buy interest down at 90.00 now. Stops seen through 90.60.

Cable at 1.6120 all but unchanged on the morning. We did see any early rally, sterling bolstered by strong house price data; UK oil company (NYSE:BP) purchases and decent Middle Eeastern buy interest.

There were reports of sell interest up at 1.6180 and that bit of info worked like a charm, the rally topping out at 1.6179.

Subsequent buying of the EUR/GBP cross has helped pressure cable in late morning trade.

Swedish name has been notable buyer of the cross, which is presentlyup at .8662 from early .8638.  There were also murmurings of BIS buying the cross, but been difficult to confirm.

AUD/USD sits at .8930. There is talk of month-end sell interest lined up for todays fix.



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