Forex news from the European morning session - 14 October 2019
Headlines:
- Trump: Big sanctions on Turkey are coming
- China reportedly wants more talks before signing Trump's 'Phase One' deal
- Eurozone August industrial production +0.4% vs +0.3% m/m expected
- Ireland's Coveney: Brexit deal is possible but tough issues remain
- How "tremendous" is the US-China trade truce?
- Fed rate cut odds still elevated despite US-China trade truce
Markets:
- CHF leads, GBP lags on the day
- European equities lower; E-minis down 0.3%
- Gold up 0.5% to $1,496.55
- WTI down 2.1% to $53.54
- Bitcoin down 0.5% to $8,300
It's all about the art of the deal as US and China look set for a further round of talks while Boris Johnson is failing to get his off the ground and running.
China is said to be wanting to meet up again for another round of face-to-face talks before signing off on the trade truce, with the possibility of pushing for the suspension of December tariffs as well being reported.
That has seen risk trades slip further today after early selling amid a continued response of 'buy the rumour, sell the fact' to the trade truce last week.
AUD/USD and NZD/USD were noticeably under pressure, falling to lows of 0.6755 and 0.6285 in the European morning alongside struggling equities.
Meanwhile, the above headline gave the yen and gold a boost with USD/JPY slipping from 108.25 to a low of 108.03 before recouping some losses. Gold inched higher from $1,490 and is making its way back towards the $1,500 handle currently.
On the Brexit front, negative news over the weekend helped to cast doubt over a possible Brexit deal and that put significant pressure on the pound today.
Cable fell to a low of 1.2600 ahead of European trading but dipped lower towards 1.2540-50 levels as the pound continued to struggle amid waning optimism of a deal.
Dampening remarks from the European camp certainly isn't helping and with parliament set to debate the Queen's speech later today, we could see the pound face more pressure amid mounting odds of a general election.
Other than that, the dollar held firm throughout as markets grow a bit more cautious about overall risk sentiment as the euphoria surrounding last week's trade truce appears to be quickly dissipating in the new week.
