FX round-up: Euro steady against Greenback, not so versus sterling

Risk appetite ticked up on Friday albeit with a 24-hour delay, as investors digested the barrage of measures announced by the European Central Bank on the previous day.

“Overall perhaps the eventual negative market reaction was due to the increasing realisation that this meeting might mark the point where focus shifts from easing being solely for the financial markets to one where it's aimed at improving credit in the economy.

“By association this may explain the significant rally in the Euro as markets feel that the game of trying to weaken the currency is shifting,” Deutsche Bank’s Jim Reid said to clients in a research note.

Nonetheless, Reid recommended investors remain sceptical about whether the packaged would be successful.

Dollar/yen, perhaps the most widely tracked barometer of risk-appetite yen tacked on a gain of 0.41% to finish the London session at 113.65.

Notably, euro/dollar remained 0.07% higher to 1.1186, albeit after having hit an intra-day low of 1.1080, possibly as the realisation set in that the ECB may have gone out of its way not to weaken the single currency – or not at least against the greenback.

Versus the euro was 0.94% lower by the end of trading at 0.7753.

If only due to arbitrage effects, cable was up by 1.09% to 1.4432, having traded within a similarly wide intra-day band as euro/dollar that saw it hit a session low at 1.4254.

Carry currencies were also on the move, with the Australian and New Zealand dollars racking up gains of 1.72% and 1.67%, respectively, versus the US dollar.

Chinese credit data for February out overnight came in comfortably below market forecasts, but economists appeared optimistic that the underlying trend higher had been distorted by seasonal factors.