Forex news from the European trading session - 14 August 2018
Headlines:
- US July NFIB small business optimism index 107.9 vs 106.8 expected
- Eurozone June industrial production -0.7% vs -0.4% m/m expected
- Germany August ZEW survey current situation 72.6 vs 72.1 expected
- Eurozone Q2 GDP second reading +0.4% vs +0.3% q/q flash
- Turkey's Erdogan says country faces an explicit economic attack
- UK June average weekly earnings +2.4% vs +2.5% 3m/y expected
- CBRT boosts lira rate in swap auction today
- Switzerland July PPI +0.1% vs +0.2% m/m prior
- Spain July final CPI -0.7% vs -0.7% m/m prelim
- France July final CPI -0.1% vs -0.1% m/m prelim
- Germany Q2 preliminary GDP +0.5% vs +0.4% q/q expected
- Germany July final CPI +0.3% vs +0.3% m/m prelim
- Indian rupee feels the heat from Turkish lira turmoil
- Japan June final industrial production -1.8% vs -2.1% m/m prelim
Markets:
- CAD leads, JPY lags on the day
- European equities mostly higher
- Gold up 0.11% to $1,194.76
- WTI up 1.04% to $67.90
- US 10-year yields up 1.5 bps to 2.893%
- Bitcoin down 4.67% to $5,985
The session was a rather dry one in terms of action as markets digested the relative calm seen in the Turkish lira today. The lira started the session more or less unchanged against the greenback and that led to some quiet time in the market but there were hints of risk-off tones easing as most Asian equities jumped and the yen lagged behind.
The lira then posted decent gains against the dollar as European trading began and that led to the dollar and yen falling but ranges were nothing to really scream about. Meanwhile, equities saw a bright start as bank stocks pared losses seen from yesterday.
Trading stayed range-bound thereafter but sterling did move higher heading into the UK jobs report only to fall back thereafter as the data offered little change to the bleak outlook for households and consumers - dragging along the euro with it. GBP/USD fell to 1.2775 from after touching a high of 1.2827 levels on the data release and continues to trade there now.
EUR/USD fell from 1.1420 levels to a low of 1.1380 before recovering some poise to trade around the 1.1400 level currently.
There wasn't much else of note on the session as other economic data releases went by without much of a fuss.
Looking at other currency pairs, USD/JPY traded around 110.80-111.00 for most of the session as risk-off tones eases and equities are marginally higher still. USD/CHF is one of the anomalies for the day with the swissie trading lower at the start of the session only to move near the highs towards the end, currently trading at 0.9907. Nothing substantial of note and this is more of a flow-related move by the look of things.
USD/CAD had a more lively session as oil prices trading towards the highs near the end of the session gave the loonie a lift on what is already a positive day as commodities rebound and risk sentiment improved. The pair traded around 1.3000-10 levels earlier in the session before falling to trade around 1.3080-90 levels now.
As for AUD/USD, the aussie just can't get off the lows as poor Chinese data also helped to weigh on the currency which continues to be hurt by suffering bond yields as well. The pair trades in a narrow range on the day as barrier options at 0.7250 are also helping to limit further downside for the time being.
Lastly, NZD/USD is one of the top gainers today as the kiwi is markedly higher from AUD/NZD selling and improved risk sentiment in the market. The pair continues to trade around 0.6580 to 0.6600 for majority of the session and is near the figure level at the moment.
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