Forex news from the European trading session - 16 July 2018
Headlines:
- UK government spokesman insists there isn't going to be a second referendum
- Theresa May insists that Brexit proposal sets out the right deal for the UK
- Italy's Salvini labels the euro as "an experiment that began badly"
- Eurozone May trade balance €16.9 bn vs €18.6 bn expected
- Italy May trade balance €3.38 bn vs €2.94 bn prior
- The facade of Italy's new government may be starting to crack
- SNB total sight deposits w.e. 13 July CHF 576.1 bn vs CHF 576.0 bn prior
- UK government could accept amendments to customs bill - report
- German economic outlook continues to be met with skeptic eyes
- Economists still see the ECB raising rates in Q3 2019 - survey
- EU's Tusk warns Trump that trade wars can lead to 'hot conflicts'
Markets:
- NZD leads, USD and JPY lags on the day
- European equities mixed, mostly flat
- Gold up 0.16% to $1,243.48
- WTI crude down 1.62% to $69.86
- US 10-year yields up 0.7 bps to 2.834%
- Bitcoin up 5.5% to $6,525
The session was a quiet one for the most part, with the dollar exhibiting slight weakness early on in the session along with the yen - before the greenback moved lower towards the end of the session. All this comes after the dollar was rejected on Friday at the highs following a test of the dollar index at key resistance levels.
Apart from that, the session offered very little with a lack of key economic data releases and headlines. The kiwi and sterling were the two main beneficiaries from the dollar's decline so far, with the latter holding and then staying above the 200-hour MA reassuring the near-term bullish momentum.
Apart from that, we had more headlines from Italy pertaining to their intentions with the euro but not that it's anything new. It only shows that the walls are starting to crack and the new government's true colours are starting to shine through.
In other news, Bitcoin looks set for its biggest daily gain in two weeks as BlackRock joins Steve Cohen in the latest list of big-name investors to venture into crypto and blockchain.
As for individual currencies, EUR/USD has steadied around the 1.1700 level following a move higher as a result of the dollar's weakness. As for USD/JPY, the pair has stayed around the 112.40-50 levels for the most part today with the lack of movement in US Treasuries offering little clue on direction for the pair.
Other major currencies posted more straightforward gains (Aussie recovered after China's Q2 GDP showed a slowdown) but USD/CAD sees more subdued gains as oil prices continue to fall with WTI now back under the $70 handle.
Looking over to the US session, there is retail sales to look forward to so let's see if that will make or break the dollar on the day.
