Forex news from the European trading session - 18 August 2021
Headlines:
- US MBA mortgage applications w.e. 13 August -3.9% vs +2.8% prior
- Kiwi's post-RBNZ resilience starting to be challenged
- Eurozone July final CPI +2.2% vs +2.2% y/y prelim
- Formula 1 confirms Japanese Grand Prix cancelled at the request of the government
- UK July CPI +2.0% vs +2.2% y/y expected
- Germany posts highest daily new COVID-19 cases in nearly three months
Markets:
- GBP leads, NZD lags on the day
- European equities mixed; S&P 500 futures down 0.1%
- US 10-year yields up 2 bps to 1.277%
- Gold flat at $1,786.50
- WTI up 1.2% to $67.40
- Bitcoin down 0.5% to $44,719
It was a quiet session for the most part as risk tones were more tepid, with the market taking a bit of a breather after the action to start the week.
The RBNZ didn't hike its OCR earlier in the day and that sent the kiwi for a wild ride, before settling close to unchanged levels to start European morning trade.
The kiwi showed much resilience throughout the session with NZD/USD seen around 0.6920-25 before slipping to 0.6890 and is keeping closer to 0.6900 currently as support levels around 0.6880-00 are still holding up for now.
With risk tones less defined today, other major currencies and the dollar aren't getting much to work with. EUR/USD is keeping a defense of 1.1700 for the time being while GBP/USD is seen pushing higher to 1.3770, recovering some poise after yesterday's fall.
That said, the latter is still keeping below its 200-day moving average at 1.3923, so the bias is continuing to favour sellers - at least from a technical perspective.
The FOMC meeting minutes later today will be the key risk event to watch out for, as the market will be scouring for clues ahead of Jackson Hole next week.
