EURUSD: The euro gave up the initial gains it made which rose 33 pips to 1.0874 from 1.0841 in early Europe which was fueled by buying interest of EURGBP which initially rose 44 pips to 0.7664 from 0.7620 and the sharp decline of China stocks. CSI 300 fell 6.02% to close at 2,940.51 - 188.38 points. Selling EURUSD ensued after the high of 1.084974 to fall to 1.0825 (-49 pips) as of 11:10 GMT as the European stock market followed the decline of Asian counterpart. Euro Stoxx -0.26%, DAX -0.42%, FTSE -0.65%. Option expires at 1.0720-50.
GBPUSD: Cable iintially fell from the 1.4233 high in Europe to test 1.4173 (-60 pips) with risk aversion sentiment stemming from the lower Asian stocks, with the CSI 300 index -6.02% and the S&P futures -0.85% from -0.4%, shortly after SSEC closed -6.4%. The Bank of England dovish expectations after MPC Forbes' comment yesterday on the impact of lower oil, and the Brexit referendum event also weighed on the pound. BOE Gov. Carney's optimistic comments gave the pound a shortcovering rebound to 1.4220. Carney said "The need is above trend growth, and domestic cost growth for rate hike., the recent US hike contributes to global monetary tightening."
USDJPY: The Japanese yen showed much buying interest from the Asian session to early Europe where the rate fell from 118.35 to the intraday low of 117.65 (-70 pips) on safe haven demand with the sharp decline of China's CSI Index -6.02%, Nikkei -2.35%. WTI crude oil initially fell to $29.30 to rebound later to $30.38. Japan EcoMin Amari said the BOJ does not signal monetary easing in advance, which added to the initial yen buying. However, USDJPY showed a good rebound to 118.50. on short-covering while China's PBOC injected CNY 440 billion via a reverse repo, the biggest liquidity injection in three years to calm the markets.
AUDUSD: The aussie was also sold off initially from 0.6965 to 0.6918 on large overnihgt selling interest as crude oil slid to $29.30 and soggy commodities. The market is also quite thin with the Australia Day Holiday. The aussie later reversed direction and aussie buying ensued and pushed the aussie to 0.6982 (+64 pips) as it followed the path of AUDJPY which rose from 81.50 to 82.70 (+120 pips).