Forex news from the European trading session - 19 October 2020
Headlines:
- EU's Šefčovič: We are not going to sign a Brexit agreement at any cost
- ECB's Holzmann: No need yet for more easing amid virus crisis
- Brexit: EU, UK chief negotiators Barnier and Frost be speak again later today
- SNB total sight deposits w.e. 16 October CHF 705.1 bn vs CHF 704.6 bn prior
- UK's Jenrick: EU needs to show flexibility on Brexit
- ECB's Lagarde: The options in our toolbox have not been exhausted
- Germany reports 4,325 new daily coronavirus cases in latest update today
Markets:
- GBP leads, USD lags on the day
- European equities mixed; E-minis up 0.8%
- US 10-year yields up 3 bps to 0.776%
- Gold up 0.7% to $1,912.17
- WTI down 0.2% to $40.80
- Bitcoin up 1.6% to $11,504
It was mostly a quiet session but there were some decent moves in the market to kick start the new week. Risk was mostly tilted to the positive side and stayed that way as US futures extended early gains amid stimulus hopes once again.
Senate returns today but there won't be any votes put forward until tomorrow, though Pelosi indicated that there is a 48-hour window to seal any pre-election deal now.
That is fueling investor optimism as S&P 500 futures gained 0.6% early on and advanced further during the session to post nearly 1% gains.
In turn, that saw the dollar slump across the board with EUR/USD gaining from 1.1720 to 1.1780 levels while GBP/USD moved up from 1.2940 to 1.3010.
The pound's gains were also helped by Brexit optimism as talks are expected to continue this week and there are also murmurs of the UK tweaking its internal market bill.
Meanwhile, AUD/USD inched higher from 0.7090 to 0.7115 while NZD/USD also posted a solid advance from 0.6620 to 0.6645.
Elsewhere, gold also pushed past some near-term resistance closer to $1,903 to move towards the next resistance region around $1,913.
For now, the dollar is bearing the brunt of the more cheerful mood. The greenback is being stretched technically, but let's see if it will break amid the pressure with the possibility of failed stimulus talks turning the tide in the coming day.
Some key technical levels to watch as the dollar is pressured to the downside currently:
EUR/USD - 1.1800, 1.1820-30
GBP/USD - 1.3017, 1.3064-83
USD/CAD - 1.3173-80, 1.3100-20
USD/CHF - 0.9087, 0.9057-60, 0.9000-10
AUD/USD - 0.7122, 0.7152
NZD/USD - 0.6670-82
