Article Highlights

  • CA monthly CPI in line with forecasts, annualized figures slightly lower
  • Carney’s comments weigh on the pound
  • Draghi causes optimism for EUR
  • S&P 500 posts largest weekly drop since 2012
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The dollar and the yen sealed their dominance during the US session as major currency pairs didn’t show substantial retracements after a broad selloff. GBP/USD, USD/JPY, and yen crosses like AUD/JPY and GBP/JPY all showed risk aversion after bearish news from China and large-scale profit-taking on emerging market investments weighed on higher-yielding currencies.

The euro was saved from the bloodbath thanks in part to Draghi’s remarks about how the ECB’s easy policies are finally being passed on to the economy. This is in stark contrast to Carney saying that he’s “not signaling an exit of UK monetary policy here just to be clear.”

Let’s see if we’ll see more volatility today. An index of business services in New Zealand beat last month’s 56.4 reading at 57.5 while Japan’s trade deficit just came in at 1.302 trillion JPY in December, the largest deficit in 2013. Analysts had expected the report to come in at 1.24 trillion JPY, down from November’s 1.29 trillion JPY figure.

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London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

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