Europe Summary and Highlights 19 February
The USD was generally firmer through the European morning.
European morning session
The USD was generally firmer through the European morning. EUR/USD lost 30 pips to 1.0430, and GBP/USD lost 30 pips to 1.2590. USD/JPY rise more modestly, gaining 20 pips to 151.80, and the AUD, CAD and scandis saw similar declines. USD/CHF was little changed at 0.9035.
The main news of the morning was the UK January CPI data, which was higher than expected at 3.0% headline, 3.7% core, although the core rise was broadly in line with expectations. GBP managed some initial gains after the data, with EURGBP hitting a low of 0.8273, but finished the morning little changed near 0.8285. Otherwise, there was little news of any real note. The Eurozone current account surplus for December was larger than expected at EUR38.4bn.
Asia session
The RBNZ cut by 50bps as expected and guided there are more cuts to come. It seems to suggest the RBNZ is taking the opportunity of lower inflation to ease and stimulates the soft NZ economy. The slightly higher than expected Q4 CPI does not seem to bother them. NZD/USD dipped on announcement and see NZD/USD initially dipped to 0.5677 before reversing traction to trade 0.28% higher at 0.5719, seems like some "sell the fact" trade. AUD/USD is also 0.15% higher at 0.6363 with positive risk sentiment while USD/CAD slipped 0.1% on higher oil.
On Wednesday, we are hearing hawkish remark from BoJ's policy board member Takata and Trump suggesting new tariffs could be introduced by April 2. While it does not seem to dim the bidding interest in U.S. equities, these headlines arer good enough to also stimulate some JPY bids. USD/JPY is down 0.12% at 151.86 with JGB yields outperforming U.S. Treasury Yields. Else, EUR/USD is up 0.04% and GBP/USD unchanged.