ForexLive European Wrap: Euro hanging onto gains post Draghi

By: Pete Jackson

UK Nov Industrial production +0.3% m/m, -2.4% y/y, From -0.8% m/m, -3.0% y/y in Oct, but well below expectations of +0.8% m/m,( strongest rise since July on a monthly basis) Spanish Nov Industrial output falls -7.2% y/y- Sharp decline from revised -3.1% in October and the 15th consecutive monthly fall. Swiss Dec CPI -0.2% m/m, -0.4% y/y, from -0.3% and -0.4% in Nov. Italian auction result Ex BOJ Iwata: Would be better if yen weakens to around 95 to the dollar China's PBOC: Looks to expand cross border trading of Yuan in 2013 EU's Rehn: Euro shows resilience, doomsayers are 'behind the curve' ADB's Kuroda: Yen's still overvalued, further yen decline wouldn't be out of place Goldman’s O’Neill sees Yen weakening a lot further – Business Insider UK cannot let America's tactical interests dictate Britain's sovereign destiny So far so good, the markets attempting to consolidate  yesterday's gains after the Asian session was relatively calm on the back of a strong Nikkei performance. Risk remains largely intact despite some losses on European bourses  (notably the CAC40 and FTSEMIB down around 0.4 and 0.5% respectively. EUR/USD been pegged down into a  1.3251-84 range in Europe with some good offers capping ahead of the 1.3300 level, but known bids just under 1.3250 deterring any euro bears. Italian auction results were solid  keeping the euro rally on track. The blot on the landscape was sterling, with November's IP coming in above October's, but disappointing the high market expectations. Cable slid back from the 1.6150 level to lows of  1.6108 before find support. Real money and sovereign support now seen from 1.6100 down to sell stops at 1.6075. EUR/GBP pushed up to 9 mth highs of  0.8243 following the data release USD/JPY was snuffled around 89.00 in an 88.85-89-11 range despite bullish comments from officials (ADB's Kuroda and  GS's Jim O' Neill- and EX BOJ Iwata who wanted the Yen to weaken to 95 vs the dollar - see above) AUD/USD slid quietly to 1.0557 from  session highs of 1.0588, failing to penetrate offers ahead of  well defended 1.0600 barrier, but  bids down in the 1.0555/65 zone continue to underpin the pair  despite further gains in EUR/AUD through 1.2550