Forex news from the European trading session - 20 January 2021
Headlines:
- US MBA mortgage applications w.e. 15 January -1.9% vs +16.7% prior
- Biden to revoke permit granted to Keystone XL oil pipeline later today
- Eurozone December final core CPI +0.2% vs +0.2% y/y prelim
- UK November house prices show highest growth rate since June 2016
- UK December CPI +0.6% vs +0.5% y/y expected
- ICYMI: Germany discovers new coronavirus variant in 35 hospital patients
- Germany reports 15,974 new coronavirus cases, 1,148 deaths in latest update
Markets:
- AUD leads, EUR lags on the day
- European equities higher; E-minis up 0.3%
- US 10-year yields up 1.4 bps to 1.102%
- Gold up 0.5% to $1,848.30
- WTI up 0.9% to $53.48
- Bitcoin down 5.1% to $34,620
It was a relatively quiet session but there were a couple of decent moves in FX to take note of, with the key one being a potential downside break in EUR/GBP below key support stretching all the way back to May last year.
The pair fell to a low of 0.8838 on the day, keeping below the support level at 0.8866-67 and that led to a broader decline in the euro and a stronger pound on the session.
EUR/USD was dragged down from 1.2158 to 1.2104 and is keeping at the lows, with the euro staying sluggish amid talk that the ECB is intervening to limit yield spreads.
The dollar traded weaker initially but held its ground and while staying lower, it is keeping steadier ahead of North American trading.
AUD/USD moved up to 0.7741 before losing some ground to stick around 0.7720-30 levels while USD/CAD fell to a low of 1.2691 at the start of the session, only to creep back up to 1.2710 levels ahead of the BOC policy meeting later.
GBP/USD surged from 1.3640 to 1.3718, helped by the drive lower in EUR/GBP, but sellers capped gains around 1.3700 again as price sits below the figure level now.
Elsewhere, equities kept firmer with US futures holding gains throughout led by Nasdaq futures once again. Meanwhile, Treasuries are slightly softer but little changed.
In the commodities space, gold advanced from $1,850 to $1,857 before paring that advance now as price action continues to face resistance from the topside of its recent consolidation range at $1,860-63.
