Forex news from the European morning session - 16 April 2019
Headlines:
- UK lawmakers reportedly set to get a fresh vote on customs union within weeks
- Some ECB officials are said to doubt rate tiering will happen
- Several ECB policymakers said to doubt projections for growth rebound in H2 2019
- Germany April ZEW survey current situation 5.5 vs 8.5 expected
- Eurozone February construction output +3.0% vs -1.4% m/m prior
- UK February average weekly earnings +3.5% vs +3.5% 3m/y expected
- EU's Tusk: Brexit extension is 'flexible'
- South Korea confirms that Putin and Kim Jong Un are preparing for a summit
- Germany's Maas: No Brexit extension beyond October
Markets:
- JPY leads, AUD lags on the day
- European equities mixed; E-minis up 0.3%
- US 10-year yields up 0.7 bps to 2.562%
- Gold down 0.3% to $1,283.82
- WTI flat at $63.40
- Bitcoin up 0.7% to $5,058
It was yet another quiet session for the most part with little on the economic calendar to move things along. But the euro got caught in the thick of the action in the European morning as ECB headlines from Reuters and Bloomberg sources helped to give the single currency a nudge or two on either side.
EUR/USD held steady around 1.1300-10 levels initially before a Reuters report hinted that ECB policymakers are casting some doubt about a potential economic rebound in H2 2019. That saw the currency pair fall to 1.1280 before steadying around 1.1290.
Then came along a Bloomberg report saying that ECB officials are doubting that rate tiering will ever happen despite Draghi's proposal to examine such measures. That helped ease losses in EUR/USD as the pair climbed back up to 1.1300 with the 100-hour moving average also providing a source of near-term support at 1.1290.
The dollar is slightly firmer against the rest of the major bloc but the gains posted so far aren't really flashy as trading ranges continue to be rather narrow.
Other major currencies were more subdued with cable ranging between 1.3080-95 for the most part. The pound remains unphased as Brexit headlines grind to a standstill and as the UK jobs report came in within expectations on key wage figures.
USD/JPY continues to sit lower just under the 112.00 handle since Asian trading as the yen is holding firm. Risk sentiment in Europe was much better earlier on before the ECB report on growth doubts came about but markets have pretty much hit the reset button since then.
The aussie continues to sit on the back foot following the RBA meeting minutes, which revealed discussions on the central bank cutting rates. AUD/USD continues to linger around 0.7140-50 levels as a result of that.
