- Swiss consumption index jumps to 0.96 in June from 0.75 in May, the sharpest m/m rise in a year -UBS
- French industry demand fell in Q-2, but less sharply than in previous 2 quarters. Demand seen falling in Q-3, but fall expected to be less than in past months- Insee survey
- Dutch July business confidence -14.8 points after -15 in June – CBS
- Italy July consumer confidence rises to 107.5 from 105.4 in June, better than median forecast of 105.9. Highest read since November 2007
- UK CBI retail sales balance -15 in July vs -17 in June, but weaker than median forecast of -12
The USD has seen some across the board weakness this morning. Risk appetite remains in good shape. Surprisingly given the backdrop, the JPY hasn’t weakened but strengthened, albeit marginally.
EUR/USD started off around 1.4255 and was soon on the move, rallying to test 1.4300. Sell orders were well touted up at 1.4290/00, lined up to defend barrier option interest at 1.4300. They proved successful with the rally topping out at 1.4298.
However the euro bulls weren’t to be denied and it wasn’t long before they were back banging on the 1.4300 door and this time they proved successful, a session high 1.4303 being posted.
Unfortunately for the euro bulls there was no stop fuelled pop higher. Rather we quickly turned back below 1.4300 where we’re been mired ever since. Sources noted the fact that those who bought aggressively ahead of 1.4300 to trigger the barrier option were most likely happy to turn round and quickly book profits, the job done., effectively stiffling any impact stops may have had.
There were also mutterings of Asian sovereigns continuing to sell at highs, even after 1.4300 barrier option interest had been taken out.
Cable rallied over 1.6500 early against the backdrop of heightened risk appetite. The pairing reached a high of 1.6557, where it is said to have run into decent Japanese sell interest. The 1.6500 line has so far held the downside.
Given the heightened risk appetite elsewhere, the price action in USD/JPY had many traders scratching their heads. Having started out around 95.10 the pairing fell to test the 55 DMA down at 94.50, which provided support. We’re back up at 94.75.