The overnight session in Asia has driven the euro even lower with EURUSD taking out 1.2000 as the majority of traders return to their desks with expectations for full blown QE from the ECB augmenting. The move lower has been on low volumes and at one point EURUSD actually fell down to the mid 1.1800 region. This was on the open however and has been quickly reversed with EURUSD now sitting at 1.1955 at the time of writing, levels not seen since 2010 (whilst the low hit on the open was a level not seen since 2006). This of course is good news for Mr Draghi who has been talking down the euro for months now and since its rejection of the 1.4000 level back in May last year the rate has declined 14%. This shows that many traders that have missed out on the bulk of the euro’s move lower are likely to want to jump on board for fear of missing the next big leg lower and the market is readying itself for action from the ECB. The first meeting of the year takes place on 22nd January, so the euro is likely to remain in focus and see heightened volatility as we approach that date, which is also a few days before the Greek General Election.
Traders have also not taking any prisoners when it comes to oil with Brent Crude now in the mid $50 region. This is a market that has been a one way ticket for since the summer and the journey doesn’t look to have ended yet even though it paused for breath over the festive period.
Today sees the commencement of a week that will be dominated by PMI data with the UK starting by releasing construction data, but also a focus will come in the form of German inflation numbers at lunchtime. It will be a busy week for the start of 2015 with concludes with the first nonfarm payroll of 2015.