Opened in early Europe at $1.5706 and stg0.8370. Opened at $1.5768 in Asia after being under pressure in NY on fading risk appetite. The Asia session opened to further rating news (after S&P and Fitch both announced downgrades to Spanish banks yesterday afternoon) with Moody’s downgrading ratings of 6 European sovereigns. The move prompted a sell off in EUR/USD and GBP, and the pound fell from early highs of $1.5771 to $1.5685 before a weak bounce to $1.5710. EUR/GBP picked up from early lows of stg0.8360 after opening at stg0.8364 and edged up to stg0.8381 compounding the cable fall. Cable pressed lower on the open before tracking EUR/USD support to $1.5728, UK Clearer demand boosted the pair to $1.5750 ahead of the UK CPI data. January inflation fell to 3.6%, in line with forecasts and cable traded flat before sliding to $1.5710. Further UK clearer demand and EUR/USD buoyancy lifted to $1.5770 before easing on Asian sales to $1.5755. EUR/GBP traded a quiet stg0.8362-84 range, closing the morning around stg0.8382.
EasyForexNews Research Team