Forex news for the European trading session - 14 September 2018
Headlines:
- BOE's Carney: Big falls in house prices are not a prediction of what will happen
- Russian central bank raises key rate by 25 bps to 7.50%
- BOE's Carney reiterates that central bank is well-prepared for any Brexit scenario
- Japan's Abe says doesn't think it's alright for monetary easing to continue forever
- Eurozone July trade balance €12.8 billion vs €16.2 billion expected
- Turkey's Erdogan says political reasons lie behind lira's decline
- EU's Oettinger reported to favour a French person heading up the ECB post-Draghi
- Italy August final CPI +0.4% vs +0.5% m/m prelim
- ECB's Smets: Foresees a very gradual process of policy normalisation
- ECB's Villeroy says French economy is still growing above historical average
- Bank of France cuts growth forecasts for 2018, 2019
- Italy citizens' income is to start on 1 January, says deputy finance minister
Markets:
- NZD leads, USD lags on the day
- European equities are mixed, mostly higher
- Gold up 0.42% to $1,206.50
- WTI up 0.54% to $68.96
- US 10-year yields up 1.5 bps to 2.985%
- Bitcoin down 0.40% to $6,442
There was little to go on for European traders this session but the main theme is that of a continuation of a weaker dollar following the poor CPI report seen yesterday, albeit the weakness has been more modest today. The dollar was a little softer as the session began but most major currencies were kept in a tight range and for the most part, are still trading in a relatively tight range ahead of US trading.
There wasn't any notable headlines to move markets on the session but in general equities are trading higher and so are bond yields. EUR/USD started the session around 1.1690 levels before moving up to a high of 1.1722 on the back of some dollar weakness before paring some gains towards the 1.1700 handle again. The key focus for the pair today will be trading around the 100-day MA.
The weaker dollar also saw GBP/USD move up from 1.3110 levels to a high of 1.3139 before backing off a little to settle around 1.3120 levels currently. AUD/USD rose to a high of 0.7216 as well before settling back close to 0.7200 now. Meanwhile, USD/CAD continues to trade tepidly around the 1.3000 handle following a move earlier to 1.2983.
USD/JPY started the session around 111.90 before inching lower a little after Abe's comments stating that Japan is on the right path towards exiting easing policies - or at least that's the gist of his comments. The pair pushed to a low of 111.75 before trading a little higher now around 111.80.
NZD/USD leads the charge on the day with the pair trading near the highs still at 0.6585 as the kiwi stays underpinned from positive risk sentiment in markets as well as upbeat domestic and Chinese data from Asian trading.
The session ahead promises to be a big one for the dollar. It will all come down to whether or not the dollar index can hold up above the 100-day MA. This is the first time since April that the level is called into question and that may be a key turning point in the dollar's rally we have seen over the last five months or so.
