Previous session overview
On Wednesday, the dollar reasserted its safe-haven status, rebounding sharply against the euro and extending its recent rally against the yen to reach fresh multi-month highs.
On Wednesday, EURUSD more or less made the opposite move from the price action on Tuesday. EURUSD was rather well bid early in the session mirroring the improved sentiment on global stock markets. At that time, the poor German export performance as revealed in the detailed Q4 GDP data had no lasting impact on trading. EUR almost reached USD1.29, stymied by option level protection, and dribbled off to the USD1.27 area.
The British pound softened following news that UK economy shrank an unrevised 1.5 percent in the last quarter of 2008, indicating deep recession. The data fueled expectations for more UK monetary easing next month.
Meantime, the yen continued to wilt in response to mounting evidence of the deterioration of Japan's trade-dependent economy, although Wednesday's losses were of a smaller magnitude in comparison with selloffs earlier this week.
Stronger-than-expected business investment data helped the Australian dollar Thursday claw back some of its recent losses as currency market investors took a more positive view on the Australian economy. The Australian dollar was quoted at USD0.6500 down slightly from USD0.6509 late Wednesday.
Market expectation
The euro is regaining some of its earlier losses, while the yen has reversed course from its overbought levels as fears mount over the health of the Japanese economy. Dealers said short-term sentiment toward the euro seems too bearish, but they also caution that the dollar stands to rebound thereafter.
For EURUSD bids remain in place at USD1.2680, a break to open a deeper move toward USD1.2665/60 ahead of USD1.2650. Offers seen at USD1.2740/45, stronger interest remains at USD1.2760/65, more toward USD1.2780 and between USD1.2790/00.
Pound breaks under Wednesday's lows at USD1.4175, extends recent losses to USD1.4162. Support now seen placed at USD1.4150 ahead of USD1.4125/20 with USD1.4101 seen as a downside technical target (1.618% of recovery from USD1.4175 to USd1.4295).
EURGBP remains firm, currently holding around stg0.8960. Offers remain in place to stg0.8965, more between stg0.8985/90 ahead of stg0.9000. Support stg0.8925/20.
EURJPY - Traders said the launch of a JPY30bln Samurai bond by Dutch public sector agency Bank Nederlandse Gemeeten overnight lent a bid tone to euro-yen in the Asian session. Rate currently holding mid-range around JPY124.40, with Technical analysts retain a positive bias after the break above the 100-day moving average earlier in the week. Traders report offers placed around Thursday's JPY125.16 highs, more into JPY125.50 with stops above. Fibonacci resistance then noted at JPY126.53 (76.4% JPY131.00-JPY112.08).
Most important events of the day
| 26-Feb | Count. | Event | For | Unit | Imp. | Act. | Cons. | Prev. |
| 0:00 | DE | CPI (P) | Feb | % m/m | High | 0.3 | -0.5 | |
| 0:00 | DE | CPI (P) | Feb | % y/y | High | 0.8 | 0.9 | |
| 0:00 | DE | HICP (P) | Feb | % m/m | High | 0.3 | -0.6 | |
| 0:00 | DE | HICP (P) | Feb | % y/y | High | 0.7 | 0.9 | |
| 0:00 | DE | States CPI | Feb | % y/y | High | |||
| 0:00 | US | President Obama will release his first budget proposal, Washington | Low | |||||
| 0:00 | EU | EU Commissioner for Economic and Monetary Affairs Almunia to speak at the Bank of Spain, Madrid | Low | |||||
| 0:00 | EU | European Commission to hold two day consultation regarding possible regulation of the private equity and hedge fund sectors (to 27th Feb) | Low | |||||
| 0:30 | AU | Capital Expenditure | Q4 | % q/q | Low | 0.6 | ||
| 0:30 | AU | Average Weekly Wages | Q4 | % y/y | Low | 1.6 | ||
| 0:30 | AU | Average Weekly Wages | Q4 | % q/q | Low | 4.2 | ||
| 0:30 | AU | Capital Expenditure | Q4 | % y/y | Low | |||
| 1:30 | JP | BoJ Board Member Noda to speak at a business meeting in Naha city | Low | |||||
| 2:00 | NZ | Monetary Aggregates M3 | Jan | % y/y | Low | 6.3 | ||
| 2:00 | NZ | Credit Aggregates | Jan | % y/y | Low | 8.8 | ||
| 5:00 | JP | Construction orders | Jan | % y/y | Low | -27.3 | ||
| 7:00 | GB | Nationwide house prices (nsa) | Feb | % y/y | Low | -17.1 | -16.6 | |
| 7:00 | GB | Nationwide house prices (sa) | Feb | % m/m | Low | -1.3 | -1.3 | |
| 7:10 | DE | GFK Consumer Sentiment | Mar | Index | Low | 2 | 2.2 | |
| 8:00 | SE | Riksbank Governor Ingves will give a speech on "Introduction on monetary policy", Stockholm | Low | |||||
| 8:30 | DK | Unemployment (sa) | Jan | % Rate | Low | 2.3 | 2.1 | |
| 8:30 | NL | Consumer Spending | Dec | % y/y | Low | -0.4 | ||
| 8:30 | SE | Trade Balance (nsa) | Jan | SEK bn | Low | 11 | ||
| 8:30 | IT | ISAE Business Sentiment | Feb | index | Low | 66 | 65.5 | |
| 8:55 | DE | Unemployment | Feb | K | Low | 60 | 56 | |
| 9:00 | EU | M3 (sa) | Jan | % y/y | Low | 6.9 | 7.3 | |
| 9:00 | EU | M3 3 month (sa) | Jan | % y/y | Low | 7.3 | 7.9 | |
| 9:00 | NO | Unemployment (nsa) (NAV) | Feb | % rate | Low | 2.6 | 2.6 | |
| 9:00 | IT | Non-EU Trade balance | Jan | EUR mn | Low | 3000 | -66 | |
| 9:00 | EU | Bloomberg Retail PMI | Feb | index | Med | 44 | ||
| 10:00 | EU | Consumer sentiment | Feb | index | Low | -31 | -31 | |
| 10:00 | EU | Economic sentiment | Feb | index | Low | 68.5 | 68.9 | |
| 10:00 | EU | Industry sentiment | Feb | index | Low | -34 | -34 | |
| 10:00 | EU | Business Climate | Feb | index | Low | -3.2 | -3.16 | |
| 10:30 | BE | CPI | Feb | %y/y | Low | 2.32 | ||
| 10:30 | BE | CPI | Feb | % m/m | Low | 0.1 | ||
| 10:30 | GB | BoE Governor King and Deputy Governor Bean to testify on the banking crisis before the Treasury Committee | Low | |||||
| 10:30 | GB | BoE Treasury Committee Hearing | Low | |||||
| 13:00 | EU | ECB President Trichet to address a lecture organised by the Institute of International and European Affairs on "Europe's competitiveness in a Globalising Economy" | Low | |||||
| 13:30 | US | Durable goods orders | Jan | % m/m | High | -2.5 | -3 | |
| 13:30 | US | Durables ex defence | Jan | % m/m | High | -5.3 | ||
| 13:30 | US | Durables ex transport | Jan | % m/m | High | -2.2 | -3.9 | |
| 13:30 | US | Initial Claims | 21-Feb | k | Med | 625 | 627 | |
| 15:00 | US | New Home Sales | Jan | k | Med | 324 | 331 | |
| 16:00 | IS | Current Account | Q4 | ISKbn | Low | -110 | ||
| 17:00 | EU | ECB Governing Council Member Nowotny to participate in a conference in Vienna on "Strengthening of the financial markets in Europe" | Low | |||||
| 21:45 | NZ | External Migration | Jan | (sa, net people) | Low | 270 | ||
| 21:45 | NZ | Trade Balance | Jan | NZ $ mn | High | -450 | -346 | |
| 21:45 | NZ | NBNZ Business Confidence | Feb | index | Low | |||
| 22:45 | NZ | Building Consents | Jan | %m/m | Low | -6 | ||
| 23:15 | JP | Reuters PMI | Feb | index | Low | 29.6 | ||
| 23:30 | JP | Unemployment | Jan | % rate | Low | |||
| 23:30 | JP | CPI Core (Nation) | Jan | % y/y | High | -0.2 | 0.2 | |
| 23:30 | JP | CPI Core (Tokyo) | Feb | % y/y | High | -0.3 | 0.5 | |
| 23:30 | JP | Unemployment | Jan | % rate | Low | 4.6 | 4.4 | |
| 23:30 | JP | Real household spending | Jan | % y/y | Med | -5.5 | -4.6 | |
| 23:50 | JP | Industrial Production (P) | Jan | % m/m | Med | -10 | -9.8 | |
| 23:50 | JP | Industrial Production (P) | Jan | % y/y | Med | -30.7 | -20.8 | |
| 23:50 | JP | Large Retailers Sales | Jan | % y/y | Low | -5.7 | -6.2 | |
| 23:50 | JP | Retail sales | Jan | %y/y | High | -3 | -2.7 |
