Daily FX Wrap: Deja-vu as ECB turns EUR sentiment on its head. Focus now on March meeting as policy measures to be reconsidered. EUR slammed. More lows for cable.
The EUR took centre stage today as the ECB meeting delivered a little more than markets were bargaining for. There was an outside chance the governing council would make adjustments to current measures in place, given the heavy losses in oil, but the just as effective was the press conference revealing policy reconsideration in Mar. The EUR turned tail, and sharply so; spot falling through 1.0800 (though recovered in the aftermath), while EUR/JPY sales stopped 10 ticks shy of the Apr 2015 lows ahead of 126.00. EUR/GBP losses were tempered by another hit on cable, taking out 1.4100 after some initial barrier defence.
USD/JPY was influential in above EUR trade, but held the mid 116.00’s before steady stocks saw 117.00 reclaimed. Elsewhere, oil and stocks were consolidation mode, favouring the CAD, where the spot losses extended through 1.4400 – now 3.5 cents off the highs seen earlier in the week. USD/RUB hit fresh record highs (near 86.00), prompting comments from the Kremlin that this was no collapse. New record lows for MXN through 18.60.