ForexLive European FX news wrap: Risk tones keep firmer following China rally

Author: Justin Low | Category: News

Forex news from the European trading session - 6 July 2020

Headlines:

Markets:

  • EUR leads, USD and JPY lag
  • European equities higher; E-minis up 1.1%
  • US 10-year yields up 2 bps to 0.689%
  • Gold up 0.4% to $1,779.10
  • WTI down 0.4% to $40.48
  • Bitcoin up 1.3% to $9,211

EOD 06-07
The build-up to European morning trade was largely focused on the stock market rally in China, where over 5% gains were seen in both the Shanghai Composite and CSI 300.

The former posted its best one-day rally since 2015 with the latter closing at its highest level in five years, amid Chinese state media stoking the 'bull market' flames.

That saw European stocks push ahead with solid gains, though the risk rally on the session was more modest and kept in-check. But the mood kept the likes of the dollar and yen weaker throughout, with EUR/USD rising to near two-week highs above 1.1300.

Meanwhile, AUD/USD climbed from 0.6955 flirting with near-term resistance around 0.6975-77 while cable had a back and forth session before resting just above 1.2500 now.

As the dollar kept weaker, gold is inching towards the $1,780 level but oil prices are a bit more mixed on the session, keeping lower now and that is weighing on the loonie a tad.

For now, the China story is giving reason for risk buyers to stay on the front foot to start the week. But we'll see what coronavirus developments have to offer in due time. We're also about to go into earnings season so just be mindful of that as well in the coming weeks.

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