Forex news from the European morning session - 26 February 2019
Headlines:
- EU lawmakers give their support for Lane's appointment to the ECB executive board
- Brexit: Two votes (no-deal and Brexit delay) said to be set for 12 March should May's deal fail
- PBOC: Fending off financial risks is still a difficult task
- DUP's Foster: Brexit extension doesn't solve issues
- BOE's Carney: Fundamentals of the UK economy are sound
- BOE's Vlieghe: On balance, after no-deal Brexit likely to keep policy on hold or ease
- ECB's Lane: Data-dependent strategy provides flexibility
- France February consumer confidence 95 vs 92 expected
- China says that it is to prepare for potential Trump-Xi meeting
- UK's Lidington: Hopes meaningful vote could happen as early as next week
- Germany March GfK consumer confidence 10.8 vs 10.8 expected
Markets:
- GBP leads, CAD lags on the day
- European equities lower; E-minis down 0.2%
- US 10-year yields flat at 2.658%
- Gold down 0.1% to $1,325.69
- WTI flat at $55.50
- Bitcoin down 0.4% to $3,790
There is basically only two major themes dominating markets at the moment. The first being the pound's more upbeat tone as overnight reports of a possible Brexit delay helped to give the quid a boost ahead of European trading. That strength continued throughout as we await on May's statement in parliament which is to come at any time now.
The second theme is that of a more subdued tone in equities and risk. Trade optimism is fading slightly while India-Pakistan geopolitical tensions aren't really helping with the mood in Asian trading as well.
With the pound looking perky, GBP/USD gained from 1.3150 to a high of 1.3238 in the European morning and is settling around 1.3200 as May's statement in parliament is awaited. EUR/GBP also fell to its lowest levels since May 2017 as it traded under the 0.8600 handle earlier before hugging the figure level currently.
And as risk sentiment was rather soft, the yen held its own against the rest of the major bloc as well with USD/JPY trading lower at 110.75-90 levels for the most part today. AUD/USD was weaker as a result too with the pair trading lower around 0.7140-55 throughout the session.
The dollar is trading rather mixed against the rest of the major bloc with narrow ranges still prevailing for the most part. Traders and investors are eyeing Fed chair Powell's testimony in Congress later and that will be the highlight of what will drive sentiment in North American trading.
