ForexLive European FX information wrap: Greenback fails to carry on to positive aspects, danger stays pressured

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ForexLive European FX news wrap: Dollar softer with US holiday in focus


Headlines:

Markets:

  • EUR leads, AUD lags on the day
  • European equities decrease; S&P 500 futures down 0.7%
  • US 10-year yields down 2.8 bps to three.673%
  • Gold up 0.1% to $1,758.44
  • WTI crude down 3.0% to $73.99
  • Bitcoin down 1.6% to $16,230

The lockdown protests in China over the weekend is the primary story to start out the brand new week and that weighed on broader market sentiment. It was a basic risk-off transition from Asia to Europe with shares decrease, bond yields decrease and the greenback benefiting from haven demand.

Nevertheless, as we acquired into the session, there have been extra blended flows with the euro recovering after which transferring larger with the pound additionally paring losses in opposition to the buck. Nonetheless, with equities maintaining decrease, commodity currencies stay the laggards however are off their earlier lows at the very least.

USD/JPY was despatched decrease from 138.20 to 137.50 with Treasury yields coming beneath strain. However the pair is now again as much as 138.20 as 10-year yields get well from round 3.63% to three.67% now – nonetheless down by almost 3 bps.

In the meantime, EUR/USD moved larger from 1.0400 to 1.0496 – its highest stage in 5 months – earlier than holding round 1.0460 ranges now. I might level to the technicals as being a powerful contender for the rationale for the transfer through the session as identified right here.

GBP/USD additionally pulled larger from 1.2050 to 1.2117 earlier than maintaining round 1.2080 ranges now. Then, USD/CAD additionally eased from 1.3460 to 1.3390 earlier than holding round 1.3430-40 ranges as oil costs additionally proceed to remain beneath strain at this time. WTI crude is down 3% to round $74 as China’s unrest and zero-Covid coverage proceed to weigh on the demand outlook.

Elsewhere, AUD/USD is marked down 0.7% to 0.6700 however at the very least off earlier lows of 0.6665 through the day.

The underlying temper remains to be one which depicts a extra risk-off move in markets however the greenback is discovering it robust to maintain positive aspects with the technical components additionally in play to start out the brand new week.

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