Forex news from the European trading session - 26 May 2020

Headlines:

Markets:

  • NZD leads, USD lags on the day
  • European equities higher; E-minis up 2.0%
  • US 10-year yields up 2.9 bps to 0.688%
  • Gold down 0.5% to $1,724.19
  • WTI up 2.5% to $34.10
  • Bitcoin down 0.6% to $8,862
USD

The risk-on party continues as we see stocks extend gains on the session, with European equities keeping higher and US futures rising by nearly 2% ahead of the open.

That in turn has weighed heavily on the dollar and yen in trading today, with the former bearing the brunt of the decline in the major currencies basket.

As such, risk currencies pushed solid gains against the greenback with AUD/USD rising by more than 1% from 0.6570 to 0.6620 levels. USD/CAD also fell sharply as oil prices firmed, dropping from 1.3950 to a low of 1.3858 during the session.

The pound is also posting decent gains amid a report of the EU relaxing its red lines on fisheries in talks with the UK. But dollar weakness remains the main theme, as cable rose from 1.2220 to near two-week highs above 1.2300 and is staying there currently.

The yen is also slumping amid the more positive risk mood as we see AUD/JPY gain by nearly 1% in a move to fresh highs since 5 March, now trading around 71.19.

It is going to be interesting to see how this risk rally plays out later today as the S&P 500 index approaches some key technical levels on the chart.

Once again, risk sentiment remains the number one driver so just be wary of key headlines on the virus/vaccine and US-China relations that could shift the dial in the market.