Forex news from the European morning session - 28 December 2018

Headlines:

Markets:

  • CHF, JPY leads on the day, USD lags behind
  • European equities higher; E-minis up ~1%
  • US 10-year yields down 0.9 bps to 2.757%
  • Gold up 0.24% to $1,278.79
  • WTI up 2.08% to $45.54
  • Bitcoin up 1.18% to $3,627

The session started off with tepid risk sentiment as European equities played catch up to Wall St gains overnight while US equity futures languished around 0.2% lower. The dollar was on the back foot from the get go as the yen was the leading major currency alongside the swissie.

That playbook didn't change for currencies as the yen and swissie wrap up the European morning on top while the euro and pound saw more volatile movement. EUR/USD hit 1.1460 levels before falling back to 1.1430 as the dollar recovered some strength mid-way through the session. But the pair then pushed higher as US equity futures jumped, trading at the highs near 1.1470.

GBP/USD saw similar price action moving from 1.2670 to hit 1.2640 before recovering now to close in on a test of 1.2700. Other than that, it was pretty much straightforward for USD/JPY as the pair tracked lower from 110.70 to touch a low of 110.24 where it trades close by now.

Commodity currencies saw little movement overall but are still holding well against the greenback on the day. Despite the improvement in risk sentiment, currency traders are hinting at caution ahead of the US cash equity market open later.

All the attention will once again be on equities so expect yet another wild ride to come as we wrap up the trading year over the next two sessions.