Forex news from the European trading session - 1 October 2020



  • AUD leads, JPY lags on the day
  • European equities higher; E-minis up 1.0%
  • US 10-year yields up 1.7 bps to 0.70%
  • Gold up 0.7% to $1,899.50
  • WTI down 1.4% to $39.65
  • Bitcoin up 1.7% to $10,892
EOD 01-10

The pound stole the show on the session, tumbling after a Reuters report saying that the UK and EU were unable to bridge differences on state aid and the EU then taking legal action against the UK over a breach of the Brexit withdrawal agreement.

Cable fell from 1.2930 to a low of 1.2820 and contested levels around its 100-hour moving average, before making a complete U-turn late on in the session.

An update by FT reporter, Sebastian Payne, suggested that odds of a deal have flipped from 30/70 to 70/30 as a compromise on state aid is said to be identified.

That saw cable jump up from 1.2840 to fresh highs seen currently around 1.2970.

Elsewhere, the risk mood kept more optimistic throughout the session as US futures gradually moved higher while European stocks maintained a modest advance.

That kept the dollar and yen on the back foot with EUR/USD hovering around 1.1730-40 before inching towards 1.1770 now ahead of North American trading.

AUD/USD lingered around 0.7180-90 for the most part but is now making a case for a push above 0.7200 as the dollar slips further on the session.

All eyes will stay on the economic relief bill in Washington to see how that plays out and whether or not it will justify the optimism seen so far today.

Besides that, Brexit headlines will continue to dominate proceedings in the pound ahead of the weekend so strap yourselves in for more volatility in the sessions ahead.