EUR/USD
With yesterday’s after-market comments from ECB’s Lautenschlaeger being very much in-fitting with those of ECB’s Draghi the pair saw a particularly muted start to the session. Further comments from ECB’s Noyer and Linde painted a similar picture to that of recent ECB rhetoric saying that interest rates are to stay low for an extended period of time and the central bank are preparing work on ABS purchases, thus failing to provide the pair with any direction. From a technical perspective, the pair traded in a relatively rangebound manner for a majority of the session after finding support at the crucial 1.3600 handle, where there was also said to be around USD 1bln worth of expiries at today’s NY cut. However, EUR/USD saw a modest bout of upside in the latter stages of trade alongside broad-based USD weakness. Looking ahead, once again tomorrow sees a lack of tier 1 data from the Eurozone, with the major risk event for the pair coming after the European session in the form of the FOMC minutes.
GBP/USD
All eyes for GBP/USD today were on the UK industrial and manufacturing production data, with the release expected to show a 6th consecutive monthly expansion. However, unlike the recent slew of UK data, today’s releases fell short of market expectations with the M/M coming in at -0.7% vs. Exp. +0.3% and thus marking the largest decline in the reading since August 2013. This saw an immediate fast-money move lower in GBP/USD by around 40 pips and brought the pair back below the crucial 1.7100 level. However, these losses were then consequently largely retraced amid a bout of USD weakness late in the session. Looking ahead, tomorrow sees an absence of tier 1 data from the UK, although sees newly-appointed MPC member Shafik questioned by UK Commons Treasury Committee.
USD/JPY
Overnight, USD/JPY continued to trade below its 200DMA seen at 101.82, albeit marginally as major USD pairs continued to hold on to yesterday's US/EU session gains following a softer USD. Heading into the European session, this level was broken to the upside following JPY weakness stemming from a modest resurgence in the Nikkei 225. Although, this move higher was short-lived amid a move higher in fixed income products, with USD losing ground to JPY amid unfavourable interest differential flows. This move was then extended alongside the Wall Street open as US participants sent stock futures lower, which consequently saw USTs prosper and add further momentum to the downside for USD/JPY. This saw the pair move lower before finding support at 101.50 with RANsquawk sources noting bids at the level.