EUR/USD
The euro dropped in early Monday as Greece's anti-austerity Syriza party won the country's snap national elections Sunday, according to the first official projections from Greece's Interior Ministry, but may fall shy of an absolute majority in the 300-seat parliament and need some outside support. The party has pledged to force Greece’s creditors to renegotiate the terms of the country’s €240 billion euro financial bailout, which has roiled markets and imperiled moves to provide more funding for the country. Last week, the euro fell to fresh 11-year lows against the dollar on Friday and hit a seven year trough against the pound, a day after the European Central Bank launched a large scale quantitative easing program to combat slowing growth and inflation in the euro area.
GBP/USD
The pound remained near 18-month lows against the U.S. dollar on Friday, despite the release of upbeat retail sales data as expectations for the Bank of England to hold its monetary policy for longer continued to weigh. In a report, the Office for National Statistics said that U.K. retail sales rose 0.4% in December, beating expectations for a 0.6% decline, after a 1.6% increase the previous month. Year-on-year, retail sales increased by 4.3% last month, more than the expected 3.0% rise, after a 6.4% advance in November. The pound remained under pressure after the minutes of the BoE's January policy meeting on Wednesday showed that members voted unanimously for the first time in five months to keep interest rates unchanged at a record-low 0.5%. The euro remained under broad selling pressure after European Central Bank President Mario Draghi on Thursday said it will make monthly purchases of €60 billion per month, starting in March and continuing until late 2016.
USD/JPY
The Bank of Japan board said that underlying trend in prices needs to be monitored more closely for expectations on inflation and wages, according to the minutes of its Dec. 18-19 meeting released Monday. The minutes showed policymakers didn't think additional monetary easing was necessary even in the face of sharp drops in crude oil prices globally that is expected to see the year-on-year rise in consumer prices likely to decelerate further. "One member said that the primary focus should be on the underlying trend in prices when considering the future conduct of monetary policy, and that the key was developments in inflation expectations in a broad context," the minutes said. "Many members expressed the view that there had been steady progress in the conversion of the deflation mindset despite the further drop in crude oil prices and the decline in the actual inflation rate." At its monthly policy meeting, the BOJ board decided by an 8 to 1 vote to leave the bank's policy target unchanged while board member Takahide Kiuchi remained opposed to the Oct. 31 easing. The board maintained its cautious growth and inflation outlook adopted nearly two months earlier.
