ForexLive European morning FX news wrap: Pound enjoys the best of month-end business so far

Forex news and economic trading headlines 31 August 2016

News:

• US Fed's Evans sees protracted period of low interest rates ahead


• ECB's Draghi says they can not give a precise timeline for buying Greek debt


• ECB's Nouy says low interest rates becoming a drag on Eurozone banks


• ECB's Praet says they follow a flexible medium-term horizon


• ECB's Villeroy says helicopter money not a good tool for monetary policy


• BOJ's Funo doesn't see limits nearing to monetary easing


• Japan's Hamada says MOF has the right to conduct FX intervention


• More from Funo: Doesn't think September review will lead to change in BOJ price target
  


• Canada to apply for membership in Asian Investment Bank


• Latest Reuters poll shows lower 2016 oil price forecasts


• PBOC to expand the size of SDR-denominated assets


• China's state planner boss says meeting annual economic targets will require "arduous efforts"


• Pound takes full advantage of euro and US dollar selling


• Month-end flows muted for the moment


• Option expiries 10 am NY cut today 31 August


• More option expiries of note over the next week
  

Data:

• Nikkei 225 closes up +0.97% at 16,887.40
  


• Eurozone CPI Aug estimate yy +0.2% vs +0.3% exp


• France HICP Aug mm flash +0.4% as expected vs -0.4% prev


• Italy HICP Aug flash mm 0.0% vs -0.1% exp


• Germany unemployment change Aug -7k vs -4k exp


• Italy unemployment rate July flash 11.4% vs 11.6% exp
  


• Germany retail sales July mm +1.7% vs +0.5% exp


• UK Nationwide house price index Aug mm +0.6% vs -0.2% exp


• Japan annualized housing starts July yy 1.005bln vs 0.992bln exp

The expected month-end flows have yet to fully unveil themselves but it's been a session that's seen the pound take full advantage of on-going euro weakness and USD longs paring some gains.

EURGBP failed to hold above 0.8500 despite expected month-end demand given that now the BUBA have spread the purchases over 4 days. The pair failed on an early rally attempt into 0.8520 and was on the back-foot thereafter, finally giving up 0.8500 support to trigger stops.

A quick move to 0.8485 was followed by more stops down to 0.8474 as GBPUSD triggered stops of its own above 1.3120 and was soon posting 1.3157 in a rush. With USDJPY also finding dip-demand  below 103.20 GBPJPY was also a prime mover up to 135.76 and that's helped underpin GBPUSD with EURGBP failing to hold the rally back above 0.8485.

USDJPY has found month-end sellers to cap rallies while USDCHF remains underpinned with EURCHF notably holding its own again.

AUDUSD and NZDUSD have been relatively contained while USDCAD has found good support at 1.3080 as oil dipped but struggling since to make significant gains above 1.3100.

Comments from US Fed heads Rosengreen and Evans had the expected cautious tones but both seemed resigned to rate hikes and the consequent reaction was understandably mixed and muted.

ForexLive European morning FX news wrap: Pound enjoys the best of month-end business so far
ForexLive European morning FX news wrap: Pound enjoys the best of month-end business so far
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