Forex news from the European trading session - 6 May 2021
Headlines:
- A couple of takeaways from the BOE May monetary policy meeting
- US April Challenger layoffs 22.91k vs 30.60k prior
- Pound whipsaws on BOE decision as policymakers hint at slowing QE purchases
- BOE leaves bank rate unchanged at 0.10%, as expected
- Eurozone March retail sales +2.7% vs +1.6% m/m expected
- Japan reportedly to decide on use of AstraZeneca, Moderna vaccines on 20 May
- UK April final services PMI 61.0 vs 60.1 prelim
- Germany March factory orders +3.0% vs +1.5% m/m expected
- NZ confirms that quarantine-free travel with New South Wales has been paused
- Germany reports 21,953 new coronavirus cases, 250 deaths in latest update today
Markets:
- CHF leads, NZD lags on the day
- European equities mixed, little changed; S&P 500 futures up 0.1%
- US 10-year yields up 1.1 bps to 1.577%
- Gold up 0.4% to $1,793.75
- WTI down 0.6% to $65.25
- Bitcoin up 2% to $58,019
The market saw a bit more of a steady session with equities holding little changed after seeing its early advance pared while Treasuries kept steadier in general as well.
In FX, the euro had a modest session as it gained from 1.2010 to 1.2055 against the dollar and is holding at the highs as buyers contest the 100-day moving average.
The pound was a notable mover as well as cable held steady around 1.3900 before falling to 1.3860 on the BOE decision, which subsequently reversed higher to 1.3940 as the central bank mentioned it will slow down QE purchases with one member dissenting to reduce the stock target at today's meeting itself.
There is still some event risk to watch out for the pound with UK local elections taking place and all eyes being on Nicola Sturgeon's SNP party.
Elsewhere, the dollar held a touch lower in general while the aussie reversed an early decline from Asia trading (after China is said to suspend a key economic dialogue between the two countries) in a move up from 0.7701 to 0.7758.
USD/CAD is keeping at the lows for the day around 1.2240 as the loonie also stays buoyed against the dollar for the time being.
US jobless claims will be one to watch out for next before the focus turns back to risk sentiment ahead of the non-farm payrolls report due tomorrow.
