Forex news from the European morning session - 19 February 2019
Headlines:
- Brexit: European Commission reiterates will not accept time limit to the backstop
- ECB's de Guindos: Central bank still analysing causes of Eurozone slowdown
- Eurozone December construction output -0.4% vs -0.1% m/m prior
- Germany February ZEW survey current situation 15.0 vs 20.0 expected
- UK December average weekly earnings +3.4% vs +3.5% 3m/y expected
- Eurozone December current account balance €16.2 billion vs €20.3 billion prior
- UK's Callanan: Cannot see Britain taking part in European Parliament elections
- Switzerland January trade balance CHF 3.04 billion vs CHF 1.90 billion prior
Markets:
- GBP leads, NZD lags on the day
- European equities lower; E-minis down 0.3%
- US 10-year yields flat at 2.66%
- Gold up 0.2% to $1,330.10
- WTI up 0.8% to $56.01
- Bitcoin up 1.0% to $3,890
Markets pretty much hit the reset button following yesterday's moves with the dollar recouping losses overnight and steadied itself during the day. Equities sentiment was mixed early on but things changed when European investors joined the fray, with stocks slipping during the morning alongside US equity futures.
The slightly softer risk tone is keeping the aussie and kiwi pressured with both currencies still sitting at the bottom of the pile since Asian trading. AUD/USD began the session around 0.7110-20 before slipping to the lows currently just above the 0.7100 handle and the 200-hour moving average.
There was mixed moves in EUR/USD as the pair struggled around 1.1295-05 at the start of the European morning before climbing to a high of 1.1325 as the dollar and yen weakened mid-way through. The greenback quickly recovered its losses and the pair made its way back down towards 1.1280 thereafter.
Headlines haven't been kind to the euro today with Germany ZEW survey current conditions falling to its weakest level since December 2014 and Italy's industrial orders data suffering heavily, which prompted a fall in BTPs and is seeing domestic bank stocks pressured.
The pound is holding up more resiliently after having traded around 1.2900-10 before rising to a high of 1.2935 on the back of dollar weakness and then falling back to its earlier range again. The quid now moves a little higher to 1.2930 ahead of North American trading.
The yen is also one of the currencies that is struggling on the day after BOJ governor Kuroda hinted at potentially more dovish action by the central bank during Asian trading. USD/JPY steadily climbed from 110.60 to a high of 110.82 where it trades close to currently.
Looking ahead, expect the performance of US equities to continue being the key driver of market sentiment as traders continue to await US-China trade talks in Washington on Thursday this week.
