Forex news from the European morning session - 20 June 2019
Headlines:
- BOE leaves bank rate unchanged at 0.75%; votes 0-0-9
- Istat says that Italy's economy will likely contract in Q2
- UK May retail sales -0.5% vs -0.5% m/m expected
- ECB's de Guindos: Rate cuts are only a possibility for now
- ECB's de Guindos: Central bank is focused on inflation, not market reaction
- ECB's de Guindos: Euro area economic risks clearly tilted to the downside
- Dutch PM Rutte: There is no other solution to Brexit than the current arrangement
- BOJ's Kuroda: Downside risks to the global economy have heightened
- ECB's Rehn: We will also consider resuming asset purchases
- BOJ's Kuroda: It is possible to keep current low rates beyond the spring of 2020
- BOJ's Kuroda: Appropriate to think flexibly on 10-year JGB yields range
- ECB's Rehn: Central bank ready to act as appropriate unless economy improves
- BOJ's Kuroda: Japan's economy is expanding moderately
- Official says US drone was downed in international airspace over Strait of Hormuz
- ECB's Knot: Central bank actively thinks about 'emergency plans' in case growth doesn't pick up
- Recap: Fed's median dot plots belie more dovish tilt by FOMC members
Markets:
- CHF leads, USD lags on the day
- European equities higher; E-minis up 0.8%
- US 10-year yields down 1.4 bps to 2.01%
- Gold up 1.5% to $1,380.65
- WTI up 3.3% to $55.54
- Bitcoin up 0.9% to $9,243
It's all about the US dollar in the new day as it gets beaten down following a more dovish shift by the Fed overnight. The greenback fell in Asia Pacific trading, only for the fall to intensify during the European morning as traders continue to keep their attention on the dovish message sent out in yesterday's FOMC meeting.
As a result, the dollar is slammed across the board with EUR/USD inching back above 1.1300 now from 1.1270 at the start of the session. Meanwhile, cable also extended its climb to highs of 1.2727 only to be pegged back a little after the BOE meeting decision - which saw a downgrade in Q2 growth forecast.
Commodity currencies shone brightly in the session with NZD/USD closing in on the 0.6600 level while AUD/USD recovered from an earlier setback from RBA governor Lowe's remarks, moving up from 0.6890 to trade at 0.6920 levels currently.
Besides the dollar, the yen is also a bit of a dud this morning as equities and yields climbed higher. Treasury yields recovered from their early setback and is paring the drop in Asia while US equity futures continued to gain, now up by 0.8% at session highs. That helped USD/JPY move higher from 107.50 to near 107.80 currently.
Apart from that, oil also surged higher after a report of Iran shooting down a US drone in the Strait of Hormuz. WTI is posting gains of over 3% now and trades at three-week highs ahead of North American trading.
