ForexLive European morning FX news wrap: Franc gains on haven demand, dollar sluggish

Author: Justin Low | Category: News

Forex news from the European morning session - 5 August 2019

Headlines:

Markets:

  • CHF leads, AUD lags on the day
  • European equities lower; E-minis down 1.5%
  • US 10-year yields down 7.5 bps to 1.77%
  • Gold up 1.3% to $1,459.58
  • WTI down 1.0% to $55.12
  • Bitcoin up 12.8% to $11,728

EOD 05-08
Markets continued to side with haven flows during the session as markets remained nervous following US-China trade war escalation and the PBOC allowing the yuan to weaken below 7.00 per dollar earlier in the day.

The franc was the major beneficiary with EUR/CHF slipping to fresh two-year lows and USD/CHF tumbling from 0.9780-90 to a low of 0.9738 during the session.

The yen held firm as well with bond yields sinking heavily on the morning. 10-year Treasury yields began the session down by 7 bps before extending the downside to 10 bps but has recovered some ground heading into North American trading.

USD/JPY lingered around 105.90-00 to start the session before spiking to 106.30 briefly after China lamented about US agricultural purchases. But the action proved to be short-lived as price fell to 106.00-10 levels thereafter.

The other major mover was the dollar as it sank during the session with EUR/USD buyers seizing near-term control and breaking higher from 1.1140 to 1.1170 levels.

Meanwhile, the pound also recovered some poise against the dollar after better-than-expected UK services PMI data. Cable moved up from 1.2110 to near flat levels around 1.2160-70 currently as buyers continue to find reprieve near the 1.2100 handle.

Commodity currencies remain the laggard amid the ongoing risk-off mood as equities are battered alongside other riskies like oil and base metal commodities.

Gold remains an outperformer as such, holding gains of more than 1% during the session as bullion moved to new year's highs and threatening a further break to the upside.

Looking ahead, it's all about risk sentiment today and let's see if Trump has anything interesting to say about what China are doing with their currency later on in the session.

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