EURUSD: The euro fell from 1.0962 to 1.0880 (-0.0082 pips) in Europe as the US dollar gained versus the major currencies from Friday's better than expected core PCE price index. The euro also fell further on the weak Euro zone Feb CPI which fell to -0.2% y/y versus the median forecast of 0.00% (Jan 0.3%). The spread between US Treasuries versus the German Bunds is also wider which weighed on the euro. The stock market also fell. The German Dax is -1.58% to 9,362 and Euro Stoxx is -1.13% to 2,896 as of 11:30 GMT. EURJPY also added pressure to the EURUSD as it fell to 122.83 from 124.42 mainly on yen buying interest.
GBPUSD: Sterling initially rose to the high of 1.3914 in Europe from 13860 in Asia on profit taking of shorts. The 1.3914 top was quickiy met with sellers. The ensuing decline was influenced by BOE's data on gilts; foreign investors who sold a net of GBP 6.26 bn of UK gilt bonds in January, the largest decline in two years. Sterling fell from 1.3914 to test 1.3840 (-74 pips), combined with a weaker FTSE -0.65%.
USDJPY: The USDJPY fell steadily from the Asian session high of 113.93 to dip to the intraday low of 112.76 (-117 pips) on risk aversion and yen buying against the major currencies as China's PBOC's lowered the yuan's reference rate to 6.5472 from 6.5372 (Friday) versus the dollar amid improving data from the U.S. Core PCE data. The yuan decpreciation also was felt in the stock market. Nikkei fell 1% to 16,026 at the close, while China's CSI 300 Index fell 2.39% to 2,877. The G20 weekend meeting was non-event to the market.
AUDUSD: The Australian dollar received a small boost which rose from 0.7134 tp 0.7166 ( 32 pips) in Europe following the news of China's PBOC cutting the bank reserve requirements by 50 basis points to 17%. which appears to be a mere easing move by the PBOC at the margins and some say was overdue. The market gave more attention to the PBOC lowering the USDCNY fixing by 100 pips from Friday to 6.5472 which raised more concern and pushed the stock markets lower on fears of a slowing China economy. The aussie has traded in a narrow range in Asia H 0.7147 L 0.7117. The aussie is broadly lower pressured by AUDJPY selling and yen buying on lower equities.