Forex news from the European morning session - 19 July 2019
Headlines:
- Pelosi says that she won't accept latest White House debt ceiling offer
- Fed's Bullard says 25 bps rate cut this month would be appropriate
- Bitcoin slips as CFTC probes BitMEX over client trades
- Most of Salvini's advisers want him to force an election, says Italian official
- Merkel says that German economy is in a difficult phase with slower growth
- US-China trade war could become a currency war - Fitch
- Tory lawmakers reportedly pushing for rule change to protect new PM from confidence vote
- Japan May all industry activity index +0.3% vs +0.3% m/m expected
Markets:
- USD leads, EUR lags on the day
- European equities lower; E-minis up 0.1%
- US 10-year yields up 2.2 bps to 2.047%
- Gold down 0.6% to $1,437.40
- WTI up 1.4% to $56.10
- Bitcoin down 3.0% to $10,299
It is all about the dollar as we look to wrap up the week following the flip flop fiasco involving New York Fed president John Williams' comments overnight.
The dollar gained ground in Asia Pacific trading before gains eased up and then continued its track higher in the European morning - backed by a report from WSJ citing less dovish remarks from perennial Fed dove James Bullard from an older interview.
EUR/USD traded around 1.1240-60 for the most part in early trades before making new lows on the session towards 1.1230 as the dollar gained fresh ground during the session. Cable also moved from 1.2540 to a low of 1.2510 before recovering some ground.
As Treasury yields held higher, it kept USD/JPY bid on the session with the pair hovering around 107.60-70 despite a bit of a setback in European equities after a brighter start. The sentiment in Europe was dragged by risks of a potential Italian election shaping up.
Oil held firmer on the session after the US shot down a drone in the Strait of Hormuz overnight, which Iran still vehemently denies that it was one of theirs. WTI is up by 1.4% currently to $56.10 although gains have eased up a little during the morning.
Looking ahead, the main focus will still be on the dollar and the Fed as markets grapple with what to expect ahead of the 31 July FOMC meeting. Hence, pay attention to the final few Fed speakers left today before the blackout period commences tomorrow.
I wish you all a great weekend and have a wonderful rest of the day!
