Forex news from the European trading session - 17 November 2020
Headlines:
- EU says Brexit talks are intensive, no comment on timing for a deal
- Bitcoin powers past $17,000 as the second coming gathers more traction
- Brexit negotiations closing in on a trade deal as early as next week - report
- French health minister: We are in a phase where the pandemic is easing
- Germany's Braun says government to push for tighter virus restrictions next week
- IATA warns that global travel restrictions may pose a challenge to vaccine rollout
- Germany reports 14,419 new coronavirus cases in latest update today
Markets:
- GBP leads, NZD lags on the day
- European equities mostly lower; S&P 500 futures down 0.4%
- US 10-year yields down 2.6 bps to 0.88%
- Gold down 0.1% to $1,887.50
- WTI down 0.4% to $41.20
- Bitcoin up 1.9% to $17,017
European equities are mostly softer with US futures also sitting slightly lower following yesterday's vaccine optimism, but the dollar is weaker in the currencies space.
One of that is not like the other but the market will do what it wants to do.
The positive vibes from yesterday is fading a touch as more and more virus restrictions are put into place in the US, with Europe possibly going to extend existing measures beyond the end of this month and possibly until the year-end.
The German government talked up plans about doing so next week while France hinted that restaurants and bars may stay closed until early January potentially.
Despite that keeping equities more cautious, the dollar fell against the euro as EUR/USD rose from 1.1850 to 1.1886. GBP/USD traded closer to 1.3200 earlier on before a Brexit pop saw it climb from 1.3225 to 1.3250, then extending gains to 1.3272.
USD/JPY eased from 104.40-50 to 104.17 as Treasury yields kept lower on the session, helping to slightly underpin the yen amid the more cautious risk backdrop.
Risk currencies didn't fare too well though, with AUD/USD hovering around 0.7300-30 with gains limited by last week's high at 0.7340.
USD/CAD stuck around 1.3070-80 for the most part as any downside push is fended off by the 200-hour moving average at 1.3068 currently.
Meanwhile, NZD/USD is still struggling to keep any semblance of a firm break above 0.6900; a similar tale to trading last week.
Elsewhere, Bitcoin managed to push past $17,000 for the first time since early 2018 as the second coming gathers more traction in recent weeks.
It seems like we are due for a pause in the risk rally once again as the market digests the vaccine optimism from yesterday and weighs that up against the negative virus developments from the here and now.
The exuberance may fade but the tide isn't turning yet. Watch out for 3,600 in the S&P 500 and the 2 September high - now acting as a support - at 3,588 for more clues on that.