Forex news from the European trading session - 25 June 2020
Headlines:
- ECB: Monetary policy measures and fiscal response has reduced downside tail risks
- ECB's Rehn on German court ruling: We have found pragmatic, sensible way to move forward
- UK June CBI retailing reported sales -37 vs -38 expected
- WHO's Kluge: Europe had first increase in weekly cases in 'a long time'
- ECB sets up new repo facility to provide liquidity to non-euro area central banks
- German constitutional court rejects separate challenge over ECB's QE program
- Germany July GfK consumer confidence -9.6 vs -12.0 expected
- Germany reports 630 new coronavirus cases, 13 deaths in latest update
Markets:
- GBP leads, EUR lags on the day
- European equities near flat levels; E-minis down 1.0%
- US 10-year yields down 1.6 bps to 0.663%
- Gold down 0.1% to $1,759.70
- WTI down 1.6% to $37.40
- Bitcoin down 0.5% to $9,238
It was a largely a quiet session as the risk mood sits on edge awaiting the next set of fresh developments with regards to the coronavirus situation in the US.
It feels almost like the market is just waiting to embrace the next wave of bad headlines at this stage, but not before some choppy price action during European morning trade.
Risk began on the defensive before retracing higher in the opening hour, with the ECB introducing a new repo facility to aid with euro liquidity in general.
US futures turned around 1% losses to flat levels before falling back now to near 1% declines. European equities also saw early declines turn into near 1% gains before faltering and trading back towards flat levels currently.
As such, the dollar went along with the ride with GBP/USD rising from a low of 1.2404 to 1.2464 before falling back now after failing to breach key near-term levels.
AUD/USD saw a similar case, rising from 0.6848 to 0.6889 only to slip back to 0.6850 levels now after a failed test of its 200-hour moving average.
The euro stayed pressured throughout though, as sellers pushed the agenda with EUR/USD slipping from 1.1250 to just under 1.1200 at the moment.
Looking ahead, we'll have US initial jobless claims to navigate through once again but it's all about the coronavirus numbers over the next two trading days.
It'll be a real test of the market's mettle now after the upside momentum tailed off at the start of the week, and now sellers will look to try and see if they can break the key downside levels from last week to establish some fresh momentum.
