Forex news from the European trading session - 14 October 2021
Headlines:
- ECB's Lagarde: Inflation upswing is largely driven by temporary factors
- BOE's Tenreyro: Inflation should be temporary
- German economic institutes cut GDP growth forecast for the year
- Energy crisis could stoke inflation, slow global recovery - IEA
- China premier Li says have plenty of tools to deal with economic challenges
- CAD/JPY nears multi-year resistance as buyers eye further upside breakout
- BOJ's Noguchi: No big risk of Japan sliding into stagflation
Markets:
- NZD leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.8%
- US 10-year yields down 2.3 bps to 1.526%
- Gold up 0.2% to $1,796.66
- WTI up 1.1% to $81.36
- Bitcoin up 1.1% to $57,600
The market is sticking with a similar tone from yesterday for the most part as equities are bouncing back modestly after the setback from the early stages this week.
European indices are keeping higher while US futures are pointing to solid gains as bond yields stay on the retreat, with 10-year Treasury yields easing further to 1.528%.
Put together, that is not really helping much with dollar sentiment on the week as the greenback stays on the defensive and is down across the board except against the yen. Even so, USD/JPY is down from around 113.55 earlier to 113.30-40 currently.
EUR/USD rose from 1.1595 to 1.1620 before keeping closer to 1.1600 while GBP/USD advanced from 1.3680 to 1.3730, holding at its highest in over two weeks.
Meanwhile, commodity currencies are shining in light of the better risk mood with USD/CAD breaching its 30 July low and pushing below 1.2400 on the day. The loonie is also helped by firmer oil prices as WTI keeps a 1% push above $81.
AUD/USD is up 0.5% to 0.7413 and testing its 100-day moving average while NZD/USD is up nearly 1% and also contesting a push against its own 100-day moving average, trading around 0.7020-30 at the moment.
It's all about the ebb and flow this week and with long-end yields retreating from the highs at the start of the week, that is pinning the dollar down but yen pairs are still looking poised to push higher with CAD/JPY contesting its 2017-18 highs @ 91.60.
