Previous session overview
On Tuesday, the euro ended substantially higher versus the dollar and the yen as U.S. stocks rallied and investors showed an increased interest in risk. The dollar gained sharply against the yen in the wake of the equity rally.
Fears over the euro zone and its exposure to Eastern and Central European economies, which sent the euro to multi-week lows last week, have subsided somewhat as well.
On Tuesday, EURUSD eked out some handsome gains, as Bernanke's comments on (unlikely) nationalization of banks injected a dose of much needed risk appetite in the markets, pushing equities and the euro up. The return of risk appetite clearly benefitted the euro as we have seen many times in recent times and the EURUSD pair eventually closed the session at USD1.2846, compared to USD1.2694 on Monday evening.
The British pound held gains, lifted by upbeat news UK retail sales fell at a much slower pace. However, gains were limited by comments from Bank of England's Andrew Sentence saying that the British economy needs more stimuli in order to revive its economy and mentioned possible quantitative easing.
On Tuesday, USDJPY continued to rally higher. The yen has apparently lost its safe haven status and when the USDJPY pair moved through the important JPY94.63 resistance technical buying pushed the pair higher during a good chunk of the trading session, leaving the pair at JPY96.64 in the close, up from the JPY94.61 close on Monday.
The Australian dollar was firmer late Wednesday, helped higher by a significant rally in regional equities markets as investors bullishly took heart from comments by Federal Reserve Chairman Ben Bernanke.
Market expectation
The upswing in equities continues to benefit the euro and the dollar against the yen Wednesday, though the euro is slightly lower against its U.S. counterpart.
EURUSD edging higher, though momentum seen slowing, traders says as rate looks set to retest earlier Asian highs at USD1.2879. Offers have been noted at USD1.2880, with talk now suggesting stops in place on a break above. If stops triggered then d expected to meet further sell interest placed toward USD1.2900. More stops noted above the figure.
USDJPY holding in the middle of the day's range into European dealing, with traders noting stops in the JPY97.50 area, placed above the late November highs at JPY97.44. Light bids reported at JPY96.60/50, stronger into JPY96.30/20.
Euro-sterling holds just off session lows in early Europe, allowing cable to ease back, in line with euro-dollar slippage, currently trading around USD1.4528. Support seen placed around USD1.4515, more around USD1.4500, with stops placed through USD1.4495/90. A break here can open a deeper pullback toward earlier lows at USD1.4475/70 ahead of USD1.4450. Resistance USD1.4550/60.
Most important events of the day
| 25-Feb | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 0:00 | AU | DEWR Skilled Vacancies | Feb | % m/m | Low | -0.1 | ||
| 0:30 | AU | Wage Price Index (WPI) | Q4 | % q/q | Low | 0.9 | 0.9 | |
| 0:30 | AU | Wage Price Index (WPI) | Q4 | % y/y | Low | 3.8 | 4.1 | |
| 0:30 | AU | Construction Work Done | Q4 | % q/q | Low | -1.5 | 4.4 | |
| 0:30 | AU | Construction Work Done | Q4 | % y/y | Low | 8.8 | ||
| 2:00 | US | President Obama will speak to the joint session of Congress | Low | |||||
| 7:00 | DE | GDP (s.a) (F) | Q4 | %q/q | Med | -2.1 | -0.5 | |
| 7:00 | DE | GDP (wda) (F) | Q4 | %y/y | High | -1.7 | 0.8 | |
| 8:00 | ES | PPI | Jan | %y/y | Low | -1.6 | -0.2 | |
| 8:15 | SE | Economic Tendency Survey | Feb | Index | Low | 71.7 | 71.7 | |
| 8:15 | SE | Consumer Confidence | Feb | Index | Low | -16.9 | -17.5 | |
| 8:15 | SE | Manufacturing Confidence | Feb | Index | Low | -36 | -34 | |
| 8:30 | SE | Riksbank release minutes from prior (10th Feb) MPC meeting | Low | |||||
| 9:00 | IS | CPI | Feb | % m/m | Low | 0.6 | ||
| 9:00 | IS | CPI | Feb | % y/y | Low | 18.6 | ||
| 9:00 | NO | Unemployment (AKU/LFS) (sa) | Nov-Jan | % rate | Low | 3.1 | 2.9 | |
| 9:00 | IT | Retail sales (nsa) | Dec | % y/y | Low | -1.7 | -3 | |
| 9:00 | IT | Retail sales (sa) | Dec | % m/m | Low | -0.2 | ||
| 9:00 | EU | ECB Governing Council member Ordonez to appear at parliament's economic affairs committee, Madrid | Low | |||||
| 9:30 | GB | GDP 2nd Est. | Q4 | % q/q | Low | -1.6 | -1.5 | |
| 9:30 | GB | GDP 2nd Est. | Q4 | % y/y | Low | -1.9 | -1.8 | |
| 10:00 | EU | ECB Governing Council member Weber will speak at the inauguration ceremony for the new president of Bundesbank, Hannover | Low | |||||
| 11:30 | EU | EU Commissioner for Economic and Monetary Affaris Almunia to speak at the the Bruegel and European Economic Advisory Group on "Europe in recession: The years ahead" | Low | |||||
| 15:00 | US | Existing home sales | Jan | mn | Low | 4.8 | 4.74 | |
| 15:00 | US | Fed Chairman Bernanke to give Monetary Policy Report before House panel | Low | |||||
| 17:30 | GB | BoE MPC member Blanchflower will give a lecture at the University of Stirling | Low | |||||
| 21:45 | NZ | RBNZ Inflation Expectations | Q1 | %y/y | High | |||
| 22:00 | BE | PPI | Jan | %y/y | Low | -1.6 | ||
| 22:00 | BE | PPI | Jan | % m/m | Low | -3.9 |
