ForexLive European FX news wrap: Aussie slips as Melbourne returns to lockdown
Forex news from the European trading session - 7 July 2020
- BOJ likely to consider standing pat at next week's policy meeting - report
- European Commission forecasts deeper slump amid 'more pronounced' economic divergences
- Tokyo reportedly finds 106 new coronavirus cases in latest update today
- Germany May industrial production +7.8% vs +11.1% m/m expected
- Australia's state of Victoria announces six-week lockdown for Melbourne city
- Full statement of the RBA July monetary policy decision
- RBA keeps cash rate unchanged at 0.25%
- Fed's Bostic: US recovery may be 'levelling off'
- GBP leads, AUD lags on the day
- European equities lower; E-minis down 0.8%
- US 10-year yields flat at 0.678%
- Gold down 0.4% to $1,777.95
- WTI down 0.7% to $40.33
- Bitcoin flat at $9,271
The two main headlines on the session were basically the Australian state of Victoria announcing a renewed six-week lockdown in Melbourne and the European Commission seeing a deeper slump than initially anticipated in the economic recovery this year.
The RBA was a rather non-event with the market focus still largely resting on the risk mood, and today we are seeing a pullback from the gains yesterday.
The euphoria from the China rally yesterday has quickly faded, with Chinese stocks themselves sagging into the close and barely hanging on to gains today.
The barrage of negative virus headlines weighed on risk sentiment and that kept the dollar more bid in European morning trade for the most part.
EUR/USD fell from 1.1310 to 1.1259 before getting a slight bounce to 1.1290 as the dollar gives back some gains going into North American trading.
AUD/USD was a notable mover as the aussie fell on the Melbourne news, slipping from 0.6970 to 0.6922 before recovering some ground to 0.6940 levels now.
Cable also stayed more choppy, falling to a low of 1.2463 before rising to session highs now around 1.2520 levels with GBP/JPY also underpinned and taking a look above its 100-day moving average amid a weaker yen in trading today.
As such, USD/JPY is also keeping higher around 107.70 and moved close to test its own 100-day moving average earlier at 107.81.
So, today is essentially turning out to be the opposite of yesterday as investors are still duking it out between cheap money and virus fears. This is going to be the embodiment of Q3 trading so we're only just getting started in figuring out who has the edge right now.