ForexLive European FX news wrap: EU ministers fail to agree on virus rescue plan

Author: Justin Low | Category: News

Forex news from the European trading session - 8 April 2020

Headlines:

Markets:

  • GBP leads, EUR lags on the day
  • European equities lower; E-minis up 0.5%
  • US 10-year yields up 4 bps to 0.75%
  • Gold flat at $1,648.50
  • WTI up 2.8% to $24.30
  • Bitcoin up 2.5% to $7,297

EOD 08-04
The main story of the session was the EU finance ministers failed to reach a bailout deal to aid member states as the battle against the coronavirus continues in the region.

Majority of members want to draft an agreement but Italy is against the vague term of "innovative financial instrument" and wants an explicit mention to coronabonds instead.

However, that is something that the Netherlands has outright rejected and are adamant that they will continue to do so ahead of another round of discussions tomorrow.

The euro fell on the headline, with EUR/USD easing from 1.0880 to 1.0830 as risk sentiment also tumbled with US futures seeing 1% gains erased completely as well.

However, as the session progressed, the dollar saw gains ease up with risk also trading more tepidly as US futures flip flopped between mild losses and mild gains.

In turn, EUR/USD pushed higher to 1.0870 now with the dollar seeing gains pared against the aussie, kiwi and pound as well.

AUD/USD made its way from 0.6130-50 to 0.6180 while GBP/USD climbed from 1.2300 to a high of 1.2374 after news of UK PM Johnson still to be in stable condition.

Looking ahead, the market feels like it is at a bit of a crossroads right now. Investors are desperate for good news but no one is throwing them a bone, as coronavirus developments also continue to show that any call for a major turning point is still premature.

Risk remains tepid and if there aren't any good news to come along soon, I reckon the weight of the economic damage from the virus disruption will start to feel a bit heavy towards the latter stages of the trading week.

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