5 Dec 2014
Yesterday was a volatile day for FX – Investec
FXStreet (Barcelona) - The Investec Research Team shares the FX performance for yesterday, noting that high volatility was seen in the EUR/USD and USD/JPY due to ECB’s meet and speculation surrounding ECB’s initiation of the QE.
Key Quotes
“Yesterday was a volatile day in the Foreign Exchange markets. While the focus was on the European Central Bank press conference we saw that the market positioning in EUR/USD is a little stretched in the short term horizon. We started off with a quiet morning, USD/JPY hovered below the key 120 mark taking the market's focus with large offers protecting the level. The Bank of England held rates as expected with no accompanying statement, as did the ECB.”
“The fun and games started later in the afternoon with European Central Bank President Mario Draghi's press conference. First he shepherded the Euro lower as he said the ECB were going to assess if more stimulus is needed in Q1 2015. He then triggered a sharp Euro rally as he failed to commit to any action and stated the voting for their balance sheet expansion plan was not unanimous. That said, Sovereign bond buying quantitative easing would only require a consensus to action. The Euro squeezed higher and saw a sharp relief rally with the Euro climbing around 170 points against the US Dollar from the lows of the press conference.”
“Just when you thought it was safe to go in the water, Bloomberg released a hugely contradictory article stating the European Central Bank are preparing a broad based quantitative easing package for January that includes Sovereign bond buying. A bit different to Mr Draghi's assertion the ECB would first review the impact of current stimulus in Q1 2015. The Euro dropped 100 points lower on the news against the US Dollar, showing how uncertain and messy positioning has become.“
Key Quotes
“Yesterday was a volatile day in the Foreign Exchange markets. While the focus was on the European Central Bank press conference we saw that the market positioning in EUR/USD is a little stretched in the short term horizon. We started off with a quiet morning, USD/JPY hovered below the key 120 mark taking the market's focus with large offers protecting the level. The Bank of England held rates as expected with no accompanying statement, as did the ECB.”
“The fun and games started later in the afternoon with European Central Bank President Mario Draghi's press conference. First he shepherded the Euro lower as he said the ECB were going to assess if more stimulus is needed in Q1 2015. He then triggered a sharp Euro rally as he failed to commit to any action and stated the voting for their balance sheet expansion plan was not unanimous. That said, Sovereign bond buying quantitative easing would only require a consensus to action. The Euro squeezed higher and saw a sharp relief rally with the Euro climbing around 170 points against the US Dollar from the lows of the press conference.”
“Just when you thought it was safe to go in the water, Bloomberg released a hugely contradictory article stating the European Central Bank are preparing a broad based quantitative easing package for January that includes Sovereign bond buying. A bit different to Mr Draghi's assertion the ECB would first review the impact of current stimulus in Q1 2015. The Euro dropped 100 points lower on the news against the US Dollar, showing how uncertain and messy positioning has become.“