ForexLive European morning FX news wrap: Cable at two-week lows as UK economy grinds towards a halt

Author: Justin Low | Category: News

Forex news from the European morning session - 5 February 2019



  • AUD leads, CHF lags on the day
  • European equities higher; E-minis up 0.2%
  • US 10-year yields up 0.9 bps to 2.732%
  • Gold up 0.2% to $1,314.23
  • WTI down 0.4% to $54.17
  • Bitcoin up 0.1% to $3,420

EOD 05-02
The pound was among the key movers on the session as cable flirted with the 1.3000 handle after falling from 1.3040 on the back of yet another weak PMI survey data. The prints today show that economic activity is seen grinding to a standstill on the back of Brexit uncertainty and that precipitated a decline in cable as lows touched 1.2997.

The euro also came under pressure with the former slipping from 1.1430 levels to a low of 1.1412 before recovering slightly to 1.1420 levels against the dollar. There wasn't much in terms of headlines impacting the euro but a reminder of weak economic growth from PMI data certainly didn't help the single currency's cause. The trading range remains narrow though - 29 pips.

Meanwhile, the swissie remains pressured on the session as European equities surged higher as risk sentiment improved across asset classes. USD/JPY continues to knock on the door of the 110.00 handle as markets are looking towards a more risk-on mood ahead of US trading. That saw USD/CHF hit highs not seen since mid-November rising from 0.9990 to 1.0020.

The positive mood didn't last long for oil though as WTI fell from highs of $55.21 to being lower now by 0.4% at $54.17. Once again, resistance close to the 38.2 retracement level @ $55.55 is acting as a key level to cap gains for the time being. The move higher and lower in oil didn't inspire much movement in USD/CAD though as price sits in a 20 pips range between 1.3102 and 1.3122 on the day.

Lastly, the aussie remains the standout performer after gaining earlier as the RBA kept rates unchanged and reiterated a more neutral/less dovish tone. AUD/USD started the session near the highs at 0.7260 but then traded between 0.7240-50 levels thereafter, hugging levels near the 100-hour moving average.

WCRS 05-02

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