Forex news from the European trading session - 17 November 2021
Headlines:
- US MBA mortgage applications w.e. 12 November -2.8% vs +5.5% prior
- Merkel urges those not vaccinated against COVID-19 to get their first shot
- ECB's de Guindos: Inflation expectations are still anchored
- Eurozone October final CPI +4.1% vs +4.1% y/y prelim
- UK October CPI +4.2% vs +3.9% y/y expected
- ECB's Rehn: Euro area inflation will ease next year
Markets:
- GBP leads, AUD lags on the day
- European equities mixed; S&P 500 futures flat
- US 10-year yields up 0.7 bps to 1.64%
- Gold up 0.7% to $1,863.01
- WTI down 0.5% to $80.34
- Bitcoin up 0.2% to $60,580
It was a quiet and steady session for the most part, with the early gains in the dollar cooling off while equities and bonds aren't showing much appetite so far.
The pound managed a slight advance as UK inflation data beat estimates, laying out the red carpet for the BOE to hike rates next month.
GBP/USD jumped from 1.3435 to 1.3470 on the report before settling around 1.3450 levels now with the dollar more tepid across the board. EUR/GBP fell to just below 0.8400 on the data release but is now keeping around 0.8400-10 levels.
Looking at dollar sentiment, the greenback is keeping in a good spot technically but has seen its early momentum pull back. EUR/USD moved up from 1.1290 (low today hit 1.1265 in Asia) to 1.1320 in European morning trade while USD/JPY slipped from 114.90 to 114.70.
The aussie is a notable laggard though amid a fall in AUD/NZD as the pair starts to build some downside momentum once again, with sellers aiming towards 1.0300.
It looks like dollar bulls are taking a light breather as stocks and bond yields are also lacking some enthusiasm but we'll see if things can pick up going into US trading as has been the case in the past few days.
