Forex news from the European morning session - 18 February 2019
Headlines:
- Brexit: EU reiterates that withdrawal agreement is not open for renegotiation
- European Commission: Would react swiftly if US applied tariffs to EU car imports
- First seat projections of European Parliament elections show surge in far-right support
- Bundesbank: German growth slowdown to persist at least in 1H 2019
- Labour MPs leaving to call themselves The Independent Group
- ECB's Villeroy: Rate move hinges on economic downturn's duration
- Brexit: Several Labour MPs said to be set to announce resignation later
- Italy's Salvini says government won't fall over migrant issue
Markets:
- EUR leads, JPY lags on the day
- European equities mixed
- Gold up 0.3% to $1,324.92
- WTI up 0.5% to $55.89
- Bitcoin up 3.9% to $3,705
The dollar started the session on the back foot and is ending the European morning in similar vein as optimism surrounding trade talks between US and China is helping to keep the greenback and yen pressured on the new week. Risk assets were more sturdy in Asian trading with regional equities performing strongly; Chinese equities ended the day with ~3% gains.
However, the aussie and kiwi couldn't follow through on their earlier gains and is settling around the middle of the major currencies bloc ahead of what will be a liquidity-stricken session in North America.
AUD/USD started the session close to 0.7150 and is barely changed throughout, trading near the highs currently just above that level. As for NZD/USD, the pair slipped from 0.6870 levels to 0.6860 levels as the dollar made an attempt to recoup its losses mid-way through the morning. Evidently, that failed and the pair is back up to trade at 0.6870 levels now.
EUR/USD began the day around 1.1310 before slipping just under 1.1300 but was defended by the 100-hour moving average as the dollar gained slightly. But after that, it was one-way traffic as buyers broke above the 200-hour moving average and the pair holds near 1.1330 currently.
Despite several Labour lawmakers resigning, the pound held steady for the most part around 1.2900. Cable did slip to a low of 1.2892 early on but rose back up to trade near 1.2930 levels on the day as buyers continue to keep up the near-term bullish momentum.
Looking ahead, it should be a rather quiet session, much like what we've seen in the European morning, with an empty economic calendar as well as a lack of liquidity set to continue to engulf markets. It's all about risk and trade talks for now so expect that to continue to dominate trading sentiment until tomorrow.
