Forex Afternoon Wrap for 9th February

Key Forex Afternoon Notes:

• Japan current account 0.98 Tn vs. 0.95 Tn; bank lending y/y 2.5% vs. 2.6% previously
• ANZ Job advertisements 1.3% vs. 1.8% previously
• Japan consumer confidence 39.1 vs. 39.4
• Japan economy watchers sentiment 455.6 vs. 45.7
• German trade balance 21.8bn vs. 18.2bn
• Eurozone Sentix investor confidence 12.4 vs. 3.4
• Canada housing starts 187.3k vs. 184k

Later:

• US Labor markets conditions index
• FOMC member Powell speech

Currency markets opened on a sturdy note, with the Euro single currency opening stronger despite the weekend developments in regards to Greece. Over the weekend, Greece’s Prime Minister Alexis Tsipras unveiled plans to rid the country of the austerity plans, ruling out any further negotiations in regards to extension of the current bailout. Greece has until February 16th to seek an extension of the bailout, which currently the country is refusing until the terms were more favorable to Greece.

While the Eurozone is expecting to see the fallout from the Greek crisis largely contained to the country alone, Greece Finance minster, Yanis Varoufakis noted that a Grexit would set a precedent for other countries to follow.

While the crisis continues to play out, the Euro remains largely muted to the news, perhaps in anticipation of a clear outcome, most likely by the end of February.

The Aussie and kiwi dollars opened lower only to trade higher towards the European trading session, making an intraday high of 0.781 and 0.742 respectively. The Japanese Yen opened stronger against most of its peers but albeit subdued. USDJPY declined from highs of 119, trading near 118.5 at the time of writing.

From Europe, with the exception of the unfolding news from Greece, there was little economic data. Eurozone Sentix investor confidence beat estimates, rising 12.4 against expectations of 3.4. The Euro was however broadly mixed across the board.

The British Pound which saw a sharp rally last week also looked weaker as it heads into a key week with the BoE’s inflation report hearing due later. The Cable managed to rise briefly towards 1.525 before easing lower, trading at 1.521 levels ahead of the US session open.

Gold futures, which declined on the backdrop of a strong NFP managed to stabilize near the major $1230 levels before the US session opened. Crude oil futures were also relatively higher during today’s early trading, rising briefly above the $52 handle.

The Greenback opened the week on a bearish note yet again, gapping higher at 94.84, but remains within the range seen for the past four days, pointing to a potential break out in either direction.

The US trading session saw the Canadian housing starts data beating estimates rising 187k above estimates of 184k. The Canadian Dollar was however relatively unchanged against its peers, weaker against the Japanese Yen, while trading within a range against the Greenback.

There are no more major news releases scheduled for today with the exception of the LMCI data and markets are expected to move within the broader theme as the Greenback continues to trade mixed across the board.