ForexLive European morning FX news wrap: Pound slides as UK economy shrinks for the first time since 2012

Author: Justin Low | Category: News

Forex news from the European morning session - 9 August 2019



  • JPY leads, GBP lags on the day
  • European equities lower; E-minis -0.5%
  • US 10-year yields down 1.9 bps to 1.698%
  • Gold up 0.2% to $1,503.20
  • WTI up 1.3% to $53.21
  • Bitcoin up 1.2% to $11,736

EOD 09-08
The pound is stealing the headlines as it slumped late in the session after an abysmal UK Q2 GDP report seen earlier in the morning. Cable is making fresh lows for the year as the UK economy contracted for the first time since 2012 in the second quarter.

The release initially saw cable fell to 1.2088 from 1.2120 before resting just above the 1.2100 handle. But in the past hour, another wave of selling kicked in and saw cable brought to its lows for the year near 1.2060 currently.

The changes across other major currencies were more modest but the yen held firm amid more cautious risk sentiment across markets. European equities are holding lower, not helped by political risks in Italy while Treasury yields are also weaker during the session.

USD/JPY slowly inched lower from 105.80-90 to session lows now just under 105.70.

The dollar is trading more steady as EUR/USD continues to pivot around the 1.1200 handle, much like it has done throughout the week.

Meanwhile, commodity currencies are barely changed against the greenback so far today amid a calmer mood in the Chinese yuan.

Looking ahead, be wary of the defensive turn in markets as we look to wrap up the week. The overall backdrop of ongoing trade tensions and a weakening yuan hasn't changed and will continue to set the tone for markets over the coming weeks.

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