ForexLive European FX news wrap: Dollar holds firm while sterling slides late on

Author: Justin Low | Category: News

Forex news from the European trading session - 11 January 2018

Economic data:

Central banks/Government:

Others:

Markets:

  • AUD leads on the day, GBP lags behind
  • European equities turn the corner and are mostly higher so far
  • Gold is up 0.15% to $1,318.88
  • WTI crude is up by 0.68% to $64.00
  • US 10-year yields is down 1.8 bps to 2.538%
  • Bitcoin is down 5.5% to $13,700

The trading session started with the dollar recouping some losses following China's retraction of the comments made yesterday about curtailing purchases of US debt. They mentioned today that yesterday's comments were based on "wrong information".

The dollar then posted steady gains against the major currencies (except the aussie), only to give back those gains a couple of hours later. But now, we're seeing a bit of moves but it's mostly a decline in sterling and the loonie - as GBP/USD falls below support levels that I highlighted earlier here.

The AUD is the lead gainer on the day following a beat in retail sales data earlier in Asian trading, and has held onto gains from there. The NZD is close behind as NZD/USD extends gains above the resistance level (61.8 retracement level) it broke through yesterday:


The euro and swissie traded sideways with good two-way action against the dollar, while the Japanese yen is weaker on the day as it retraces gains posted from the last two days following the BOJ announcement to "taper" bond purchases.

Meanwhile, the CAD encountered some weakness mid-way through the session but USD/CAD ran into key resistance levels and retreated thereafter. The pair has been settling around the 1.2560-70 range since then.

The sterling has had a tough day as the shadow of Brexit talks continue to weigh in on the currency. I've also mentioned here that the consumer rhetoric is another one to watch out, and that could add to more worries in the GBP outlook moving forward. Cable fell below 1.3500 early in the session and fell below support levels that I mentioned here. The low of the day was 1.3458.

In other markets, Bitcoin continues to be plagued by news that South Korea is cracking down against cryptocurrency exchanges. It fell below $13,000 earlier in the day but has bounced back a little since.

And in commodity markets, we saw crude oil hit above $64 for the first time since December, while the January gold trade is still pretty much looking good but encountering a little bit of a resistance pocket.