EUR/USD
EUR found itself supported after some-what hawkish comments from various ECB members, heard through-out the session and coupled with a stark lack of tier-1 data, helped the pair to outperform its peers. However the major is still trading within Friday’s range after news flow last week weighed heavily on the currency. The host of ECB speakers today were the focus for FX markets, with ECB’s Nowotny starting proceedings saying ‘further rate cuts not ruled out but no immediate need for further ECB action’, with ‘other tools may be more effective than rate cuts’, giving EUR its initial strength of the session. ECB's Mersch continued the enthusing comments, quoted as saying ‘QE is a theoretical concept’ and ‘long way from theoretical concept to QE implementation’, with EUR continuing the trend and strengthening. As the North American session has come into play the weakness seen in USD has lent itself to the already ongoing price movement in EUR, fuelling the fire and letting EUR test 1.3750.
GBP/USD
A lack of news flow or major UK speakers gave the pair little in the way of direction, with price action lead by USD weakness, rather than GBP strength. The Nasdaq 100 continues its under-performance as was the case last week with the cash index testing 3,500. Consequently this move has resulted in further USD weakness, since the North American session opened, which in turn has seen GBP/USD touch fresh intra-day highs with stops tripped in GBP/USD on the break of 1.6600. Looking ahead UK industrial and manufacturing seen tomorrow should add more weight to a price move in the pair, however there are also a host of Fed speakers expected to talk.
USD/JPY
In the same vein as cable, USD weakness has given clout to the JPY, with the pair trading bearishly from the beginning of the session. With JPY supported in part by light risk averse sentiment caused by a possible inflammation of the Ukrainian situation and in part by a softer USD, as participants move into safer assets. Looking ahead there are several prints of tier-2 Japanese data overnight which are overshadowed by the BoJ Monetary Base Target and Policy Statement, widely expected to be kept in line with the current JPY 270trl, which is expected to show the BoJ on hold despite outside bets for further easing.