eurusd trades at fresh 12 year low 1131682015

The Euro traded to a fresh 12 year low against the greenback in the Asian session that saw a broad-based dollar rally, which initially weakened the JPY beyond 122 as the AUD and NZD slumped to 0.7600 and 0.7260 respectively. The fresh catalyst seems to be more concerns in the EU and in particular Greece as the ECB started its €60 billion monthly asset purchase programme. European government bonds are being pushed lower as the German 10 Year Bund made a fresh 10 year low this morning. Greece has seen a deterioration in fortunes since Troika last visited 6 months ago, as banks have seen billions of deposits vanish as tax receipts have also sharply declined. Concerns remain that Greece could run out of funds within weeks as Eurogroup president Dijsselbloem encouraged Athens to stop wasting time and implement serious reforms.

The NZD came under isolated pressure in the midst of a dollar rally following headlines that NZX had halted trading on three dairy companies, along with dairy futures, on the back of threat to poison infant formula. New Zealand police held a press conference to announce that Federated Farmers and Fonterra had received anonymous letters in November that protested use of the 1080 poison in pest control, and claimed to poison infant formula by end of this month. However, details emerged that no contaminated products have been found, but the threat still exists. The New Zealand police clarified that they are treating the incident as blackmail and not as a terrorism threat.

The Chinese CPI data was largely ignored by the market despite coming in above the consensus forecast of 1% at 1.4% although PPI still pointed at deflation threats falling to its lowest level since 2009.

There are no major data releases today so I feel the market will be dominated by any comments from the Economic finance ministers meeting and the knock on effect these have on European Government bonds.

EUR/USD
Supports 1.0730-1.0590-1.0500 | Resistance 1.0990-1.1155-1.1245

USD/JPY
Supports 119.50-118.65-118.20 | Resistance 122.45-123.70-124.15

GBP/USD
Supports 1.5000-1.4950-1.4815 | Resistance 1.5250-1.5345-1.5460

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