Forex news from the European trading session - 19 November 2020
Headlines:
- Brexit: EU still planning Friday update to member states
- UK November CBI trends total orders -40 vs -40 expected
- Brexit: Barnier reportedly cancels briefings to EU side planned for next week
- ECB's Lagarde: PEPP was targeted to be temporary, exceptional
- Japan reports record 2,259 new coronavirus cases in latest update today - TBS
- ECB's Lagarde: Key challenge will be to bridge the gap until vaccination is well advanced
- Japan's Aso: The yen is gaining on dollar weakness
- Germany reports 22,609 new coronavirus cases in latest update today
Markets:
- USD leads, AUD lags on the day
- European equities lower; E-minis down 0.1%
- US 10-year yields down 1.3 bps to 0.857%
- Gold down 0.6% to $1,861.50
- WTI down 0.7% to $41.53
- Bitcoin down 0.4% to $17,723
It was a largely quiet session as the push and pull in the market continues on the week, with vaccine optimism challenging against more negative virus developments.
The school closures in NYC provided a more negative risk backdrop coming into today and the market stuck with that for the most part, although some of the pessimism has abated over the past two hours or so ahead of North American trading.
European equities started lower before extending declines to around 1% and is just off the lows now, while US futures fell from being little changed to drop by 0.5% and is now paring most of the drop as we look towards the session ahead.
The softer risk mood helped to drive bids into the dollar as we see EUR/USD fall from 1.1840 to 1.1816 as sellers look to contest for near-term control below the 200-hour moving average, now seen at 1.1831.
GBP/USD also fell from 1.3240 to 1.3205 and ran into its own 200-hour moving average before getting a modest bounce from Brexit news, where EU chief negotiator Barnier has cancelled his briefings to EU member states next week - possibly in favour of more talks.
That saw price bounce from 1.3215 to 1.3260 before settling around 1.3230-40 levels.
Risk currencies are the ones suffering the most with AUD/USD seen declining from 0.7285 to 0.7255 before recovering a little to 0.7270 levels. USD/CAD made its way above 1.3100 but is keeping closer to the 100-hour moving average @ 1.3096 now.
All in all, it is setting up for a mildly risk-off start ahead of North American trading.
Dollar buyers held on to key levels yesterday and are making a statement so far today, trying to wrestle back for more near-term control. The question now will be, is there more appetite to go chasing or will dip buyers return in risk ahead of the weekend?
It continues to be a vaccine versus virus game, as it has been all week.
