European pre-market: Currencies stay little changed

Author: Justin Low | Category: News

Major currencies continue to sit in a narrow range to start the day

WCRS 16-01
There hasn't been any big hoo-hah in markets just yet after the US-China Phase One trade deal signing yesterday, with the details of the deal - US version - reaffirming what we already know in the lead up to the signing ceremony.

At this stage, markets are just keeping an eye out on any negative catalyst that can derail the enthusiasm and optimism over the last few weeks. So far, there doesn't appear to be any - besides Phase Two talks possibly not starting any time soon that is.

With the Phase One deal fully priced in already, traders and investors are meeting a pause at the moment in trying to figure out "where do we go from here?".

As such, major currencies are left little changed with USD/JPY still keeping just under 110.00 while the likes of the aussie and kiwi are continuing to keep more steady.

The dollar is also not doing much as the trading ranges so far today leaves a lot to be desired still. Meanwhile, equities and bonds are also keeping more steady and that is resulting in a lack of significant movement across markets to start the new day.

If there isn't going to be a negative catalyst to put a dent on the risk mood, perhaps the optimism can carry on for a while longer still. But again, with a lack of any significant positive catalyst and US equities near all-time highs, is this highly sustainable?

That will be the main question for market participants going into the weekend.

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