Last week the euro was at the centre of the attention following Jackson Hole comments from Draghi about his will to fight deflation in Eurozone, traders were expecting him to take action at the ECB monetary policy meeting. As usual, Super Mario did not disappoint the markets and delivered significant economic stimulus measures amongst which a further cut of the Deposit Facility Rate to -0.2 percent from a previous cut of -0.1% and the implementation of a European style QE under the form of Asset Backed Securities purchase.

EUR

Last week the euro was at the centre of attention following Jackson Hole comments from ECB President Draghi about his will to fight deflation in the euro zone; traders were expecting him to take action at the following ECB monetary policy meeting. As usual, Super Mario did not disappoint the markets and delivered significant economic stimulus measures amongst which a further cut of the Deposit Facility Rate to -0.2 percent from a previous cut of -0.1% and the implementation of a European style QE under the form of Asset Backed Securities purchase. As a result, on Thursday, the EUR/USD dropped by 1.76 percent in seven hours from 1.3152 to a daily low of 1.2920 after 3 days of relatively flat trading.

USD

The greenback is still gaining strength on speculation of a rate hike that can happen sooner rather than later. Despite the huge miss on the NFP data on Friday with a really weak 142K job addition in August against an expected 230K, the buck remained resilient. The Dollar Index is currently hovering at 83.894; a healthy pullback is not to be excluded before further continuation of the current rally.

GBP

GBP is making the headlines this morning; in fact the latest poll results are showing that Scotland might be favourable to an independence vote at its upcoming referendum. As a result, the Sterling lost ground at the opening against its major peers, the pound opened with a 160 pips bearish gap against the USD and is continuing its freefall. The pair abandoned more than 500 pips over the last three sessions, it shows how risky such an event could be for the British economy. Cable trades now near a ten month low at 1.6172 and could most probably go much lower despite an already deeply oversold context.

CHF

The Swissie is in a delicate situation against the euro, in fact the 1.20 floor fixed by the SNB in 2011 appears to be endangered. EUR/CHF benefitted from Jordan’s comments over the weekend in which he was firmly insisting on defending the floor even if buying foreign currency should become a necessity. As a result, the pair was lifted during the first half of the week and even reached a high of 1.2090 before pulling back and being even more pressured by the ECB monetary policy meeting outcome to a low of 1.2045 on Thursday. Last week action tells us two things, first the 1.2045 – 1.2050 level is a strong demand zone and second is that probabilities for an action taken by the SNB at its next policy meeting on the 18th of September are now higher than ever.