The spin around in FX

The early hours in europe trading saw the major currencies trading lower against the dollar as the 'greenshoot' theory of global economic growth was continually thrown into doubt.

FX traded along with tepid movements in risk assets like stocks as the Eur, Gbp and Aud were on the defensive.

However, following the release of the Jun EZ PMI data, which saw a weaker than expected result, the EURUSD surged from just under 1.39 to 1.4088 at print (a whopping 188 pips higher), or 1.64% higher on the day.

Along with it, the other majors are trading positive against the dollar as well.

Funny how the Eurusd turned out because from the PMI data, the services sector in europe is still in the doldrums and Q2 growth is expected to still be poor. Why did Eurusd jump?

I feel today's move is less dependent on the econ data released. Rather, the cenbanks and key option levels could be very well at play here.

The Swiss cenbank SNB may be in the market to keep EURCHF above the psychologically important 1.50 mark so as to keep the swissie more competitive (Spot - 1.5020). This is very much in line with the SNB's recent rhetoric to stay the strength of the safe haven swissie.

Yes no doubt the USDCHF has declined but as all other currencies have gone up against the dollar, the SNB will have to put its attention unto capping the CHF strength against the currencies of other nations it trades much with, namely the Eurozone.

And when the cenbank like the SNB moves, they can usually be quite effective.

With this out of the picture, it feels like another almost directionless day as stocks (the dow) bounce between the positive and negative territories.

Tomorrow is the FOMC announcement. All eyes will be on that.

Right now it also feels that the market is positioning itself for a statement by the fed that they will continue with the loose monetary policy, keeping the dollar under pressure. Hence, the majors are higher. We'll see.