ForexLive European FX news wrap: Dollar softer amid mixed markets; bonds stay in focus
Forex news from the European trading session - 18 February 2021
- ECB: Policymakers agreed that ample monetary stimulus remained essential
- BOE's Saunders: Don't need to decide yet on negative rates
- BOE's Saunders: UK economy has significant spare capacity
- BOJ may revamp guidance on ETF purchases as part of March policy review - report
- Germany reports 10,207 new coronavirus cases, 534 deaths in latest update today
- Switzerland January trade balance CHF 5.05 billion vs CHF 2.88 billion prior
- GBP leads, USD lags on the day
- European equities mixed; E-minis down 0.3%
- US 10-year yields up 2.5 bps to 1.295%
- Gold up 0.4% to $1,783.00
- WTI up 0.5% to $61.47
- Bitcoin down 1.8% to $51,474
It was a relatively quiet session as the market awaits further clues from the bond market before really making any serious moves in the second-half of the week.
Equities are keeping a little lower as the February rally loses a bit more momentum but the drop in the past few sessions is palpable given the run in the past few weeks.
There's no real sign of risk aversion yet as the market is largely taking a bit of a breather, with investors eyeing the bond market to see if the selloff will continue today.
Treasury yields are keeping higher ahead of North American trading so that is something to keep an eye out for as Wall Street enters the fray later in the day.
The dollar is keeping lower, giving back gains from yesterday with EUR/USD climbing up from 1.2040 to 1.2080. Meanwhile, GBP/USD bounced off its 200-hour moving average around 1.3840 to push up to 1.3968 as buyers stay on the hunt towards 1.4000.
USD/JPY also eased from 105.85 to 105.65 while AUD/USD moved up from 0.7750 to 0.7789 back above its 100-hour moving average and nearing the highs for the year closer to 0.7800-20 once again this week.
All eyes are still on Treasuries once again as the market weighs the backdrop of higher breakevens and yields against that of more subdued real rates (although it has crept a little higher in recent days as well).