ForexLive European morning FX news wrap: Pound stages a rebound after BOE cuts growth forecasts

Author: Justin Low | Category: News

Forex news from the European morning session - 7 February 2019

Headlines: 

Markets:

  • JPY leads, CAD lags on the day
  • European equities lower, DAX down 1.7%; E-minis down 0.7%
  • US 10-year yields down 3.0 bps to 2.664%
  • Gold up 0.3% to $1,310.10
  • Oil down 1.4% to $53.28
  • Bitcoin flat at $3,363

EOD 07-02
There was plenty of action on the session with the highlight being the BOE monetary policy decision. The cut in growth forecasts and more dovish tone sent the pound falling with cable dipping to a low of 1.2854 but quickly recovered to 1.2900 in the aftermath.

As mentioned earlier, there isn't anything that's going to change as the pound (and the BOE) is still very much tied to Brexit developments at this point. And as we move towards US trading, cable is trading higher still near 1.2920 currently.

The euro didn't have that fun of a time either as the single currency fell on the back of weaker German data and further cuts in growth forecasts by the European Commission. EUR/USD slipped to 1.1340 early on before tracking to a low of 1.1325 as the dollar caught a bid mid-way through European trading. The pair has now recovered to 1.1345 though as the greenback slips a little with risk sentiment deteriorating in the past hour.

As risk stumbled, that helped to see USD/JPY fall to 109.60 levels now after buyers failed in an attempt to break the 110.00 handle again. European equities were the catalyst of the souring risk sentiment as they fell after the European Commission cut growth forecasts across the region.

The selloff in risk did not spare oil and the commodity is trading at the lows now and that is continuing to push USD/CAD higher on the day. The pair traded around 1.3230-50 for the most part before pushing higher to 1.3270 levels now ahead of North American trading.

Looking ahead, keep an eye on the slight risk-off tone here as that will be a key theme as US traders begin their day.

WCRS 07-02

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