Forex news from the European morning session - 9 July 2019
Headlines:
- Lagarde set to be confirmed as ECB president in October as ministers sign off on appointment
- ECB's Coeure: Could theoretically resume QE again if circumstances warrant such a move
- US June NFIB small business optimism index 103.3 vs 103.1 expected
- What does the Brexit equation look like now?
- UK economy probably shrank for the first time in 7 years - survey
- Switzerland June unemployment rate 2.1% vs 2.2% expected
Markets:
- USD leads, AUD and GBP lags on the day
- European equities lower; E-minis down 0.4%
- US 10-year yields up 1.5 bps to 2.063%
- Gold down 0.3% to $1,391.58
- WTI up 0.5% to $57.97
- Bitcoin up 0.9% to $12,315
There wasn't many notable headlines in the European morning but that didn't stop markets from being active. The dollar gained on positioning ahead of Fed chair Powell's testimony tomorrow while we saw the pound fall to its weakest level against the greenback since April 2017 with cable falling to a low of 1.2440 in the last fifteen minutes.
The pound's woes are purely sentiment-based with Brexit uncertainty still weighing and economic concerns likely to see the UK economy contract in Q2.
The aussie also held weaker following poor business confidence data in Asia Pacific trading, with AUD/USD settling around 0.6950 at the start of the session before falling further to 0.6930 as the dollar firmed up.
The greenback's gains is seen amid more mixed sentiment in markets with bonds and equities both falling on the session. US futures are down by 0.4% while Treasury yields are marked higher, helping to see USD/JPY more steady at 108.80-90 levels.
EUR/USD traded in a narrow range but stays on the weaker side as the dollar strengthened to see the pair challenge a break below 1.1200 now, testing three-week lows.
The move in the dollar today can be attributed to the anticipation ahead of Fed chair Powell's testimony tomorrow, with traders looking like they're expecting him to be less dovish and communicate clearer on what markets should expect by the Fed in the coming weeks; considering how US data is failing to support the case for a cut.
