Forex news from the European trading session - 15 July 2021
Headlines:
- OPEC says world oil demand to reach 'comparable pre-pandemic levels' in 2022
- BOE's Saunders: BOE not doing average inflation targeting, unlike the Fed
- BOE's Saunders: It may become appropriate fairly soon to withdraw some stimulus
- Treasury yields retreat further in European morning trade
- Australia: Victoria reportedly to go into five-day lockdown
- UK June jobless claims change -114.8k vs -92.6k prior
- BOE's Bailey: Will not be rushed into raising rates despite rising inflation
Markets:
- GBP leads, NZD lags on the day
- European equities lower; S&P 500 futures down 0.3%
- US 10-year yields down 3 bps to 1.325%
- Gold down 0.1% to $1,825.70
- WTI down 1.6% to $71.95
- Bitcoin down 2.7% to $31,890
It was a fairly quiet session in terms of headlines but the market is sensing some caution as equities retreat further from the highs this week, with European indices slumping while US futures are also postured more defensively for now.
Tech stocks are still holding up, with Nasdaq futures near flat levels but off earlier highs seen in European morning trade as risk sentiment is dealt a bit of a knock late on.
The dollar is seen picking up a bid on the back of that, with commodity currencies leading the downside in FX. NZD/USD is seen falling from 0.7030 to 0.6997 while AUD/USD fell from 0.7480 to 0.7445 as risk appetite waned.
The loonie was a bit more volatile as it pared losses from 1.2540 to 1.2500 early on before moving back up to 1.2530-40 as the dollar gained and as oil prices slump.
EUR/USD is also under some light pressure in a push from 1.1830 to 1.1810 while USD/JPY is off earlier lows of 109.72 to 110.00 though Treasury yields are tracking lower.
Elsewhere, the pound was a decent mover as it gained from a low of 1.3814 to 1.3898 as BOE's Saunders offered some hawkish undertones, though gains in cable are still restricted closer to 1.3900 for the time being as price settles at 1.3860-70 levels.
