Forex news from the European session - 19 September 2019
Headlines:
- BOE leaves bank rate unchanged at 0.75%; votes 0-0-9
- ECB's Coeure: Fiscal policy is needed to take burden off monetary policy
- Trump: Powell's job is safe
- Brexit: UK government confirms written documents sent to the EU on Brexit
- ECB's Rehn: Data points to muted inflation outlook for a long time
- Iran's foreign minister questions US remarks: "Act of war" or "Agitation for war"?
- Ireland's Coveney: Overnight meeting with DUP did not solve all the problems
- OECD sees global economy slipping towards weakest growth in a decade
- UK Brexit secretary Barclay to hold talks with European Commission on Friday
- UK August retail sales -0.2% vs 0.0% m/m expected
- SNB leaves policy rate unchanged at -0.75%
- BOJ's Kuroda: Deepening negative rates among options if BOJ were to ease more
- BOJ's Kuroda: Central bank has become more inclined to ease now than at the last meeting
- BOJ's Kuroda: We will closely examine prices, economy at next meeting
Markets:
- CHF leads, AUD lags on the day
- European equities higher; E-minis down 0.2%
- US 10-year yields down 3 bps to 1.767%
- Gold up 0.4% to $1,500.11
- WTI up 1.8% to $59.18
- Bitcoin down 3.4% to $9,851
The central bank roadshow continued to steal the focus in town today as we saw the BOJ, SNB and BOE all left key rates and monetary policy unchanged.
The yen was already bid after the BOJ decision earlier and maintained its strength as BOJ governor Kuroda offered nothing new in his press conference. USD/JPY stayed weaker around 107.85-05 levels throughout the European morning.
Meanwhile, the franc took a leaf out of the yen's playbook as the currency gained strongly after the SNB left its policy rate unchanged and offered no hints of additional easing.
Markets took that as a sign that the central bank may still be comfortable with the franc at current levels so as to not intervene and markets are pushing that issue with USD/CHF slipping to 0.9900 from 0.9965 while EUR/CHF eased from 1.1000 to 1.0967.
The pound was also a notable mover as cable climbed to 1.2500 only to run into key resistance levels before backing off to 1.2450 as Brexit headlines continue to hint at little optimism. Cable slipped further to 1.2440 before recovering to 1.2460 now as the BOE stayed pat.
The aussie stayed weaker as traders rushed to price in an RBA rate cut for October after a less-than-convincing jobs report. Odds of a rate cut next month jumped from ~59% to ~80% currently with AUD/USD keeping just below 0.6800 throughout the session.
The dollar is on the back foot as traders continued to digest the Fed decision overnight. Markets are left in a mixed mood with more caution being observed in trading today.
Looking ahead, it's a mixed day for markets as traders/investors try to figure out fresh direction after the Fed yesterday. The meeting is leaving a lot to be desired and markets may have to wait on the "next big thing" to figure out what comes next.
