Forex news from the European morning session 26 August

News:

  • ECB's Praet: Commodity prices raise downside risk to inflation
  • PBOC continues to provide liquidity
  • China says global economic growth can not rely on them alone
  • China delays data releases due to public holiday
  • China's Financial Futures Exchange imposes sanctions 164 clients
  • Japan's Amari says China market volatility is not having a direct effect on Japan
  • Japan's Hamada says USDJPY at 116-118 is not a big risk to Abenomics
  • Italy's Padoan says ECB QE still having positive impact on economy
  • Senior Greek politicians undecided about standing for Syriza again
  • France will meet its deficit cutting targets
  • Greek Jan-July budget deficit €840m
  • Russia's Ulyukayev sees 2016 recession if oil remains at $40 per barrel
  • Latest poll has Turkey's ruling AK party at 41.7%
  • We're still in the stabilising stage after the China fun and games
  • Option expiries 10am NY cut today 26 August

Data:

  • US MBA mortgage market index 412.7 vs 411.7 prior
  • August 2015 UK CBI distributive trade sales 24 vs 18 exp
  • July 2015 UK BBA home loans 46033 vs 46000 exp
  • Switzerland UBS consumption indicator July 1.64 vs 1.61 prev
  • Japan small business confidence July 48.8 vs 49.3 prev
  • Nikkei 225 closes up +3.2% at 18,376.83

It's been another lively session but one that had traders dancing around on hot-ish coals and then euro longs running for cover on dovish comments from Praet

Chinese equity markets ended lower after posting 3% gains and the Nikkei closed higher but with European markets opening around 1.5% lower the die was cast for a confusing session

As China's market fell so we saw a euro rally with EURUSD up to 1.1514 from 1.1465 taking EURGBP up to 0.7336 from 0.7305 with EURJPY touching 137.60

But there the recent correlation ended with European equities opening lower, albeit paring losses, but we saw the euro started a steady decline that stalled when EURUSD found demand into 1.1450 but then got another shove lower on comments by ECB Praet

We've since seen 1.1410, 0.7307 and 136.49 with GBPUSD giving up on 1.5650 support prior to all that to post 1.5608.

USDJPY has been underpinned but tempered by yen pair selling while USDCHF similarly has been supported above 0.9400 but capped by EURCHF selling to 1.0780 from 1.0850

The lack of real USD and/or equity direction has seen other pairs doing their own thing and USDCAD has been in steady retreat from 1.3320 to 1.3270 while AUDUSD has traded tightly, similarly NZDUSD

US durable goods coming up at 12.30 GMT and we can expect more volatility in the session ahead