ForexLive European FX news wrap: Dollar lower, risk buoyed ahead of Yellen, Wall St return

Author: Justin Low | Category: News

Forex news from the European trading session - 19 January 2021

Headlines:

Markets:

  • EUR leads, JPY lags on the day
  • European equities mixed, a little higher; E-minis up 0.7%
  • US 10-year yields up 3 bps to 1.114%
  • Gold down 0.2% to $1,837.75
  • WTI up 0.3% to $52.50
  • Bitcoin up 1.7% at $36,860

EOD 19-01
It looks to be a case of turnaround Tuesday again as the market braced itself for the return of US traders and Wall Street, with a more positive risk tilt overall.

European equities opened higher before seeing more mixed tones but US futures kept higher throughout as investor optimism is resurfacing following a bit of a breather.

S&P 500 futures are up 0.7% while Nasdaq futures are up by roughly 1%.

The prevailing mood in the market today is pinning the dollar and yen lower in the major currencies space, with EUR/USD climbing from 1.2090 to 1.2137 and helped by a more upbeat German ZEW survey during the session.

AUD/USD maintained a modest advance, keeping around 0.7705-25 following early gains with USD/CAD also lingering around 1.2720-30 levels for the most part.

USD/JPY kept higher as the yen was the weakest performer, although gains remain capped closer to 104.00 amid key resistance levels just above the figure level.

The market will now have to reassess the reflation narrative once again following the long weekend, with some consideration if it still has the legs to run to start the year.

Looking ahead, Yellen's testimony will be one to watch but much of what she has to say has already been made known to the market so it might not really offer much.

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