Forex news from the European morning session - 25 January 2019
Headlines:
- Trump adviser Roger Stone arrested on seven charges
- ECB's Villeroy: No recession alert even though growth is slowing
- UK PM spokesman says government not ready for further talks with Brussels
- SNB's Jordan: There really is no need to change current monetary policy
- UK CBI January retailing reported sales 0 vs 3 expected
- German government said to revise 2019 GDP growth forecast to 1.0% from 1.8%
- ECB's Vasiliauskas: March meeting is to focus on balance of risks
- ECB survey sees slower growth and inflation projections
- Germany January Ifo business climate index 99.1 vs 100.7 expected
- UK's Hammond: There is no consensus in parliament about what we do want on Brexit
- ECB's Villeroy says that rate hike will depend on state of the economy
- ECB's Villeroy: Uncertainty is main explanation of economic slowdown
- ECB's Coeure: Economic slowdown has surprised the central bank
Markets:
- EUR leads, JPY lags on the day
- European equities higher; E-minis up 0.7%
- US 10-year yields up 1.4 bps to 2.730%
- Gold up 0.3% to $1,284.74
- WTI down 0.2% to $53.03
- Bitcoin down 1.0% to $3,536
It was a rather straightforward session as the dollar and the yen moved lower on the back of a more positive risk backdrop. Equities are holding up well on the day with European stocks pushing forward with gains alongside US futures as well.
That kept USD/JPY underpinned as the pair moved from 109.70 to a high of 109.91 where it trades close to currently. Yen pairs were basically on the move up on the session as the rest of the major bloc also advanced against the currency with risk sentiment looking more positive.
The greenback was among the laggards with EUR/USD pushing higher from 1.1315 to 1.1330 before getting a further nudge to the upside after news of Roger Stone's arrest. That put further pressure on the dollar as the pair moved to a high of 1.1350 ahead of US trading.
Other major currencies also saw similar advances against the greenback with AUD/USD pushing up to near session highs of 0.7120 currently from around 0.7100 at the start of the session. USD/CAD also moved to a low of 1.3309 from 1.3330 earlier but as oil retreated, the loonie lost some of its poise and the pair now tracks closer to 1.3320 on the day.
The pound was the other interesting mover as cable lost its earlier poise moving from 1.3130 to 1.3060 before gathering support at the 200-day moving average before rebounding to 1.3080. With the dollar weakening in the last hour or so, the pair managed to climb back just above the 1.3100 handle now as markets continue to weigh Brexit developments in the coming week.
Looking ahead, the closing stages of the week looks to predicate on risk sentiment more than anything else. The big question will be can markets hang on to the optimistic tone seen to start the day so far. That will be a key question as USD/JPY nudges closer to the 110.00 level, where large expiries are also seen today.
