Forex news from the European trading session - 21 May 2018
Headlines:
- UK PM spokesman says now is not the time for a second Scottish referendum
- It's not just about the dollar today
- ECB's Nowotny: Italy plans create a lot of nervousness
- Japan's Abe says that direction of BOJ's policy management is appropriate
- Five Star and Lega leaders to meet with Italian president today
- China says that it doesn't want trade tensions with the US
- Emerging markets rout extends into the new week
- IEA's Birol: Venezuela one of the biggest risks in the oil market in the coming months
- Dollar index touches 94.00, rises to five-months high
- Chinese official says China held its ground in trade talks
- China to continue to "actively and steadily" deleverage, tackle financial risks
Markets:
- AUD leads, JPY lags behind on the day
- European equities mostly higher, Italy's MIB pares losses down 0.1%
- Gold down by 0.58% to $1,285.07
- WTI up by 0.35% to $71.53
- US 10-year yields up by 1.7 bps to 3.072%
- Bitcoin up by 3.07% to $8,482
It was a bit of a quiet start to European trading as there were no key data releases on the day and major markets in France, Germany, and Switzerland are also closed. But that didn't stop the market from some decent sized moves as we got the session underway.
The dollar remained the key talking point, with the dollar index touching five-month highs briefly eclipsing the 94.00 level. That saw EUR/USD trade down to 1.1717 while GBP/USD traded to a low of 1.3391 on the day.
While cable is still stuck at the bottom of the trading range, the euro has managed to recoup some of its earlier losses and is now trading at 1.1757 against the dollar. Do take note of large expiries in EUR/USD at 1.1760 that is potentially drawing price higher for the time being.
Apart from that, commodity currencies for the most part are the leaders on the day. Weekend news that US and China are making some form of progress on the trade rhetoric has helped to give risk assets a lift on the day. Oil is also trading higher and that is helping to boost sentiment in the CAD as USD/CAD trades near the lows for the day at 1.2859 currently.
The AUD is the lead gainer so far today with AUD/USD up trading near session highs curently at 0.7533. The NZD is the one lagging behind a little, as it fell to a low of 0.6884 against the USD earlier but is now almost on par trading at 0.6901. Cross selling in AUD/NZD has also helped to lift the AUD and pin down the NZD on the day.
There isn't much else of note in the session with trading so far being a lot about the ebb and flow. For the North American session to come, Canada is also off today in observance of Victoria Day so trading may be a bit lighter than usual with no major data points of note to come in the session as well.
The only economic release of note is the Chicago Fed national activity index for April.
