Forex news from the European morning session - 23 April 2019
Headlines:
- PBOC said to be likely to pause RRR cuts
- The franc's struggles this month is a welcome relief for the SNB
- SNB total sight deposits w.e. 19 April CHF 576.9 bn vs CHF 576.7 bn prior
- China says it firmly opposes unilateral sanctions on Iran
- Brexit catch-up: Where are we at now?
- ECB's Coeure: Missing transmission from wage costs to consumer prices is a bit puzzling
- ECB's Coeure: Economic growth will return in 2H 2019 if trade conflict is resolved
- ECB's Coeure: Negative interest rates are not the biggest problem
Markets:
- GBP leads, CHF lags on the day
- European equities lower; E-minis down 0.1%
- US 10-year yields down 0.7 bps to 2.581%
- Gold down 0.1% to $1,273.10
- WTI up 0.7% to $66.00
- Bitcoin up 3.5% to $5,553
The Swiss franc's decline is the major development in the European morning as the currency continues where it left off before the Easter break, extending its overall decline against the dollar by more than 2% for the month of April so far. USD/CHF hits a fresh two-year high close to 1.0200 and looks set for its biggest monthly gain since July 2017.
The swissie's fall today also sees it hit a five-month low against the euro as EUR/CHF works its way towards the 1.1500 handle. That is a welcome development for the SNB and will help to ease pressures of them intervening after the currency pair threatened to firmly break below the 1.1200 handle at the end of last month.
Other than that, the pound is holding firm as Brexit remains quiet with UK lawmakers returning from their recess period. Cable is holding just above 1.3000 as buyers continue to keep price above key support levels from the daily moving averages.
Meanwhile, the aussie and kiwi are also notable laggards on the day with the former weighed lower on the back of weaker domestic bond yields. Australian 10-year yields are down by nearly 7 bps after the Easter break and that is helping to put some pressure on the currency with AUD/USD falling from 0.7125 to close to 0.7100 levels now.
The euro and yen were mostly stable against the dollar as large expiries are helping to keep EUR/USD near 1.1250 while USD/JPY is barely changed around 111.90 after recovering from a drop in Asian trading to 111.65. Equities are a tad softer on the day while Treasury yields are also not much changed since the start of European trading, so that's leaving traders with little to work with ahead of North American trading.
