Forex news from the European trading session - 20 September 2018
Headlines:
- Special Brexit summit to be held on 17-18 November - report
- OPEC+ unlikely to agree further official increase in oil output in Algiers meeting
- Trump reiterates his disapproval of OPEC wanting higher oil prices
- UK PM May said to indicate that there would be no backstop deal in time for October
- SNB's Jordan: Franc's rise requires expansionary monetary policy
- Japan's Abe says wants to discuss trade with Trump in upcoming summit
- UK August retail sales +0.3% vs -0.2% m/m expected
- Ireland's Coveney says believes a Brexit deal will be done
- ECB's Villeroy says that Bitcoin is probably a bubble
- SNB leaves sight deposit interest rate unchanged at -0.75%
- Iran says that it will veto OPEC decisions that harm its interests
- Switzerland August trade balance CHF 2.13 billion vs CHF 2.26 billion prior
- Japan's Abe wins ruling party leadership election
- China is said to plan broad import tax cut as soon as next month - report
Markets:
- GBP leads, USD lags on the day
- European equities are trading higher
- Gold up 0.06% to $1,204.78
- WTI up 0.24% to $71.29
- US 10-year yields up 1.7 bps to 3.079%
- Bitcoin down 0.15% to $6,414
The session kicked off with light offers in the dollar but nothing too notable. The kiwi was already well bid after a beat in Q2 GDP figures from Asian trading. The dollar then slipped a little ahead of the UK retail sales data release. GBP/USD rose from 1.3150 to 1.3180 while EUR/USD moved from 1.1680 to 1.1700.
With UK retail sales coming in as a strong beat along with positive revisions, cable popped to a high of 1.3206 before extending gains to 1.3230 subsequently. And as the dollar remains offered on the session, cable now trades near session highs at 1.3260 levels after touching 1.3270 earlier.
Much like cable, EUR/USD followed a similar path popping to 1.1720 first before making a late move towards the highs at 1.1749 as the dollar remains weak. There wasn't much of a move in the aussie as it remains offered against the kiwi and the cross-selling is what is limiting aussie gains on the day. AUD/USD now trades near the highs though at 0.7279 as the dollar falters late in the session.
Meanwhile, NZD/USD started the session at around 0.6640 but now trades at the highs of 0.6673 as well on the back of a weaker dollar. USD/JPY was the only pair that didn't move all too much though as the yen remains offered because of higher Treasury yields. The pair traded around 112.10 to 112.20 for the majority of the session and remains there at the moment.
It's been a brutal day for the dollar and with the breakdown seen in EUR/USD, GBP/USD and DXY as posted here, this could be the start of a turning point lower for the greenback towards the end of the year.
