Forex news from the European trading session - 12 June 2020
Headlines:
- European Commission outlines further post-Brexit trade negotiating rounds for July to September
- UK, EU leaders high-level call scheduled for 1230 GMT on 15 June
- Eurozone April industrial production -17.1% vs -18.5% m/m expected
- Equities extend pullback after the sharp decline yesterday
- Ryanair, EasyJet, British Airways launch legal action against UK government over quarantine rules
- German economic adviser says need to avoid another lockdown even if there is a second virus wave
- UK April visible trade balance -£7.5 billion vs -£11.0 billion expected
- UK April monthly GDP -20.4% vs -18.7% m/m expected
- China says to increase fiscal funds for local governments to support employment, consumption
Markets:
- CAD leads, JPY lags on the day
- European equities higher; E-minis up 2.0%
- US 10-year yields up 4 bps to 0.71%
- Gold up 0.5% to $1,735.85
- WTI up 0.2% to $36.41
- Bitcoin up 1.7% to $9,500
It was a rather quiet session for the most part with the main focus being risk/equities retracing after the sharp losses seen in trading yesterday.
That in turn weighed on the dollar a little but more so on the yen as the latter looks to snap four days of gains with Treasury yields nudging a little higher as well today.
European stocks were softer at the open but quickly moved past that to post decent gains on the session, with US futures also extending the pullback to around 2% now.
EUR/USD climbed from 1.1290 to 1.1340 on a softer dollar but gains were limited by the 100-hour moving average, so price fell back a little.
It is a similar story for cable as price action moved from 1.2590 to 1.2650 only to run into its 200-hour moving average and then backing off.
USD/JPY kept higher in a push from 107.20 to 107.55 but much like most dollar pairs now, near-term levels are keeping price action in-check.
Commodity currencies fared well amid the risk/equities pullback, with AUD/USD recovering from 0.6830-40 to 0.6900 but is struggling to keep above the figure level for now.
The market is still largely trying to figure out what to make of the rout yesterday and if that has the potential to grow into something more threatening.
If Wall Street can keep the pullback today, that would be a positive signal for dip buyers to stay in the game moving forward. But I fear at any point that US stocks turn negative later, it could end up being yet another bloodbath ahead of the weekend.