Forex news from the European morning session - 1 August 2019
Headlines:
- Carney Q&A: UK prime minister has been absolutely clear that the policy is to get a Brexit deal
- BOE's Carney: Global trade tensions have intensified
- BOE leaves bank rate unchanged at 0.75%; votes 0-0-9
- UK July manufacturing PMI 48.0 vs 47.6 expected
- Eurozone July final manufacturing PMI 46.5 vs 46.4 prelim
- Germany July final manufacturing PMI 43.2 vs 43.1 prelim
- France July final manufacturing PMI 49.7 vs 50.0 prelim
- Italy July manufacturing PMI 48.5 vs 48.0 expected
- Spain July manufacturing PMI 48.2 vs 48.0 expected
- BOJ's Amamiya: Doesn't think that central bank's easing tools are running out
- BOJ's Amamiya: Doesn't plan to have markets factor in easing in advance
Markets:
- USD leads, GBP lags on the day
- European equities a little higher; E-minis up 0.1%
- US 10-year yields up 2.8 bps to 2.042%
- Gold down 0.6% to $1,404.85
- WTI down 1.5% to $57.72
- Bitcoin down 0.5% to $9,977
The dollar continued its good form after the Fed and Powell yesterday, pushing gains into the new day as markets scaled back on expectations for a Fed rate cut in September. The odds of that was ~76% at the start of the week but are now at ~62%.
The dollar held on to gains from Asian trading and pushed higher across the board with EUR/USD slipping from 1.1040-50 to a low of 1.1027. Meanwhile, cable slid from 1.2110-30 to a low of 1.2085 as the pound came under pressure before the BOE decision.
But leading up to the BOE, cable rose back to 1.2110 before settling around 1.2100-20 levels currently as the central bank isn't offering much of anything new.
The aussie and kiwi also eased against the dollar during the session with AUD/USD losing early gains from 0.6850 to settle near 0.6840 currently.
The yen is among the surprise movers on the session with USD/JPY pushing lower from 109.20 to 108.85-90 levels currently. Treasury yields are firmer with equities also looking poised for more dip-buying so I reckon this is more of a technical move as sellers are holding their ground on a move above 109.00.
Other than that, there wasn't a whole lot of much else as euro area PMI data reaffirmed a weakening manufacturing sector with currency moves rather modest elsewhere.
