Forex news from the European trading session - 17 September 2018
Headlines:
- ECB's Vasiliauskas: No reason to talk about extension of stimulus
- Bundesbank says German economic growth is to improve markedly, upswing still intact
- IMF's Lagarde says a no deal Brexit is the most significant risk to the UK economy
- UK's Hammond says that confident will reach a Brexit deal this autumn
- ECB's Coeure: There might be a case to extend forward guidance beyond timing of lift off
- Eurozone August final core CPI +1.0% vs +1.0% y/y prelim
- Italy July trade balance €5.68 billion vs €5.07 billion prior
- SNB total sight deposits w.e. 14 September CHF 577.1 bn vs CHF 576.5 bn prior
- China reiterates that will take necessary response if US implements new tariffs
- Shanghai Composite closes at lowest level since November 2014 as trade tensions weigh
- Italy's Tria is to hold 2019 deficit at 1.6% - report
- Brexit and Theresa May's difficult task
- ECB's Makuch: Unpredictable Trump is euro area's main risk
- ECB's Makuch says central bank is not underestimating growth risks
Markets
- CHF leads, NZD lags behind on the day
- European equities mixed, DAX leads losses as FTSE MIB leads gains
- Gold up 0.26% at $1,196.57
- WTI up 0.74% to $69.50
- US 10-year yields up 1.1 bps to 3.01%
- Bitcoin down 0.87% to $6,478
The session started off slowly with little movement across major currencies. The trading landscape was dominated by fears of $200 billion worth of tariffs being announced by the US on Chinese goods. That saw the NZD start the day weaker with Asian equities also dragged lower as a result. European equities began proceedings in a similar mood but there wasn't much else happening as major currencies traded sideways.
But as the session progressed, the dollar and yen slipped as equities started to turn around a little. There was a bit of a spike in E-minis that accompanied the move, which led to a bit of a recovery for European stocks. Although equities are now mixed, they're well off their lows heading into US trading.
EUR/USD moved from 1.1630 to 1.1656 on the back of that before falling a little lower to 1.1640 levels thereafter. And late on in the session, the dollar and yen slipped further again and that sees EUR/USD move to a high of 1.1664 and is trading near that level at the moment. Yields are also trading higher on the session now with 10-year Treasury yields back above the elusive 3% level.
GBP/USD moved from 1.3070 levels to just under 1.3100 when the dollar tailed off earlier and subsequently made its way above the 1.3100 handle where the pair now trades close to session highs of 1.3118.
AUD/USD started the session around 0.7155 and steadily progressed higher to touch 0.7178 earlier and now trades just about there as the dollar and yen continues to stay weak. Meanwhile, NZD/USD moved off the lows of 0.6539 early in the session and now trades to a high around 0.6570 although the kiwi remains weak on the day.
USD/JPY traded more tepidly as both currencies moved in tandem to one another. The pair hugged the 111.90-00 range for the most part but has now inched back above 112.00 as Treasury yields are trading higher on the day.
The strongest performing currency on the day is the Swiss franc as the currency was helped by the mild flows out of European equities early on but continued to trade higher against both the dollar and the euro, prompting possible questions of verbal intervention to come by the SNB when they meet on Thursday this week. USD/CHF started the session around 0.9660 levels before inching lower to trade near the lows now at 0.9640.
