Forex news from the European trading session - 19 May 2020
Headlines:
- WHO says to have 'more clarity' and reaction on Trump letter later in the day
- Japan reportedly preparing cash injections for small, virus-hit companies
- Germany May ZEW survey current situation -93.5 vs -86.0 expected
- BOJ calls for unscheduled monetary policy meeting on 22 May
- France's Le Maire: EU recovery fund probably not available until 2021
- UK government announces plan for £30 billion tariff cuts after Brexit
- UK April jobless claims change 856.5k vs 12.2k prior
- China reportedly mulls targeting Australian wine, dairy amid coronavirus spat
Markets:
- NZD leads, JPY lags on the day
- European equities slightly lower; E-minis up 0.1%
- US 10-yeear yields flat at 0.73%
- Gold flat at $1,732.60
- WTI up 2.8% to $32.70
- Bitcoin up 0.9% to $9,763
It was a largely choppy session for stocks but currencies ignored the fluctuations for the most part and carried on with the theme from trading yesterday i.e. sell dollar, yen.
European stocks began the session with much optimism, seeing gains of roughly 1% before losing all of that in the opening hour and then falling further.
But as we look towards North American trading, those losses are being pared back and the same is being observed for US futures as well in the past hour or so.
Both the dollar and yen eased across the board during the session with the BOJ also calling for an unscheduled policy meeting to likely introduce more policy measures on Friday.
That helped to keep the pressure on the yen as we see USD/JPY race higher to 107.75 from around 107.30 levels at the start of the session.
The dollar selloff continued as we see EUR/USD post fresh two-week highs in a move from 1.0920 to 1.0975 and testing its 100-day moving average.
The kiwi was the biggest gainer as the currency moved from 0.6050 near 0.6100. The aussie is also sitting higher against the dollar and yen but gains are more measured amid escalating tensions between Australia and China amid the coronavirus spat.
AUD/USD was brought lower to 0.6020 on the back of more possible economic action by China but quickly rebounded on risk flows to settle around 0.6040-50 levels currently.
It is still all about risk flows so let's see if Wall Street can build on the strong moves yesterday and if the S&P 500 index can challenge its key daily moving averages later today.
