This is a review of the elements likely to affect foreign exchange (Forex) trading in Europe:

Main headlines:

ECB Bond-Buying Would Not Breach Rules: Draghi - CNBC

Euro Gains on Draghi Bond-Purchase Plan Speculation - Bloomberg

Australia Holds Key Rate, Economy Withstands Slowdown - Bloomberg

Moody's Changes Euro Zone Rating Outlook to 'Negative' - CNBC

Americas wrap-up:

Obama poised to lay out his vision - FT

Democrats Are Up—Obama Prepares to Lay Out Vision - CNBC

Apple Worth More Than Listed Firms in PIGS Combined - CNBC

Are Markets Positioning for a Bout of Dollar Bashing? - CNBC

Asia-Pacific summary:

Asian Stocks Fall on EU Outlook; Australia Shares Drop - Bloomberg

Japan Fiscal Impasse Limits Noda's Use of Stimulus to Spur Growth - Bloomberg

South Korean inflation slips to 12-year low - FT

European news:

Traders Diverge Most in 13 Months From Strategists Forecasting Weaker Euro - Bloomberg

Merkel, Monti Lead Diplomatic Push as Draghi's Plan Emerges - Bloomberg

Andalucia seeks bailout from Madrid - FT

Bankia to receive €4.5bn Spanish loan - FT

Dutch Socialists Push Back at Austerity - WSJ

Swiss bank vows to hold franc down - FT

Bulgaria Shelves Plans to Join the Euro - WSJ

UK manufacturing enjoys August bounce - FT

No Olympic Boost for U.K. Retail Sales - WSJ

FOREX action

EUR: The main euro crosses continue to show strength. Speculation about Draghi's bond market intervention plans is buoying the common currency. The improving health of the Eurozone manufacturing sector is helping as well. EUR-USD holds above 1.2600 and EUR-JPY is trading below but close to 99.00.

GBP: The sterling crosses are moving hand-in-hand with the euro trades. Upbeat August manufacturing PMI numbers in the UK are helping. Cable is trading a tad below the 1.5900 resistance level that is expected to be breached soon, while GBP-JPY is trading close to 124.65. EUR-GBP continues to show an upside bias and is still pivoting in the 0.7930 area after a recent spike towards 0.7960.

CHF: As with the rest of European crosses, the Swiss franc has been showing signs of strength versus the dollar in the last few days. USD-CHF is moving close to the 0.9500 floor. Meanwhile, EUR-CHF is in its familiar trading range close to 1.2010. The Swiss National Bank´s governor reminded us yesterday that the central bank is determined to defend this level.

Nordics: The NOK and the SEK are showing diverse trading patterns. EUR-SEK is still weak after a poor manufacturing PMI reading in Sweden. The Kroner is comparably much stronger than the Krona. Recent Brent performance has been giving a boost to the NOK.

USD & JPY: The US dollar and the Japanese yen are consolidating in a risk -off context. Today we will pay close attention to US macro figures. Our scenario points to additional Federal Reserve easing, to be announced in late September or early October after the ECB acts. USD-JPY is trading close to 78.43.

CAD, AUD & NZD: The aussie dollar is recovering across the board after resilient current account numbers in Australia. As expected, the RBA has kept its interest rates at 3.5%. Despite growing signs of China's slowdown taking its toll on the economy down under, monetary authorities keep their cool.

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