ForexLive European FX news wrap: Sterling holds steady on further Brexit deal optimism
Forex news from the European trading session - 10 October 2018
- BOE's Haldane says UK wage growth likely to be limited, gradual
- UK's Raab may head to Brussels on Monday if a deal can be made to work
- UK August visible trade balance -£11.2 billion vs -£10.9 billion expected
- UK August manufacturing production -0.2% vs +0.1% m/m expected
- UK August GDP 0.0% vs +0.1% m/m expected
- ECB's Mersch says Eurozone economy is experiencing broad-based economic expansion
- Italy August industrial production +1.7% vs +0.8% m/m expected
- EU lawmaker Hubner says there is a smaller probability for no-deal Brexit now than for some time
- EU is said to no longer expect a separate new proposal from UK on Irish border fix
- Italy's Bagnai: Sovereign debt downgrade is possible given the current climate
- France August industrial production +0.3% vs +0.1% m/m expected
- Italy's Salvini reiterates that government will not back down from budget plan
- Brexit: Thirty Labour party rebels reportedly prepared to back Chequers deal
- Mnuchin warns China not to engage in competitive currency devaluations
- GBP leads, JPY lags on the day
- European equities mixed, Italy leads gains
- US 10-year yields up 1.9 bps to 3.225%
- Gold down 0.09% to $1,188.75
- WTI down 0.16% to $74.84
- Bitcoin down 1.25% to $6,497
The session started off with a continuation of the dollar weakness seen from yesterday as most major currencies stayed within range but advanced slightly against the greenback. Equities were flattish to begin with and Treasury yields are still not in a hurry to anywhere and that made for a slightly improved risk sentiment across markets.
EUR/USD started the session around the 1.1500 handle (where large expiries are noted) but then moved lower as the things picked up and the greenback caught a bid. There was a sudden shift to a more risk off tone as E-minis and oil prices fell, and that dragged the pair lower to 1.1485. The pair then fell to a low of 1.1480 as the dollar continued its run higher before settling around 1.1500 currently.
The greenback's advance mostly came against the other currencies as the euro and pound bucked the trend. GBP/USD moved to a high of 1.3185 on the back of optimism surrounding a Brexit deal before moving to around 1.3160 ahead of the UK data releases. The data points offered little and cable erased gains thereafter as the dollar stayed bid. It fell to 1.3145 before gathering pace to head higher again as we head into US trading with the pair trading around 1.3160.
USD/JPY was one of the more subdued pairs on the day once again with little change to yields and the flat tones in US equity futures is a sign of a much calmer day to come and that is weighing on yen pairs at the moment. USD/JPY started the session around 113.05 before tracking higher to touch a high of 113.29 before trading near 113.20 currently.
AUD/USD started the session on the front foot as the aussie was bid ahead of European trading with risk sentiment in Asia seen improving a little bit. The pair touched a high of 0.7131 in early trades as the dollar was poor to begin with before slowly tracking lower as the greenback turned the corner. The pair touched a low of 0.7089 as the dollar advanced and now trades near the 0.7100 handle ahead of US trading.
NZD/USD saw similar action as the pair started off attempting to break above the 0.6500 handle before heading lower as the dollar was bid in European trading and now trades just off the lows at 0.6464.
Oil prices continue to be one of the focus points in markets as well after moving lower in early trades as a slight risk off sentiment kicked in. WTI fell from $74.80 to $74.60 on the back of that and then recovered to touch a high of $75.08 on the day. Price is trading rather flat now close to the $75.00 handle with the threat of Hurricane Michael playing out this week.