Forex news from the European trading session - 2 September 2020
Headlines:
- US MBA mortgage applications w.e. 28 August -2.0% vs -6.5% prior
- Fed's Barkin: Labour market recovery has been slower than anticipated
- Japan's Suga says want to maintain similar relationship with BOJ as Abe did
- Germany July retail sales -0.9% vs +0.5% m/m expected
- UK August Nationwide house prices +2.0% vs +0.5% m/m expected
- BOJ's Wakatabe: BOJ's overshooting commitment has some elements of Fed's new strategy
- Japan LDP confirms leadership vote for 14 September at 0500 GMT
Markets:
- USD leads, AUD and EUR lag on the day
- European equities higher; E-minis up 0.6%
- US 10-year yields up 1.1 bps to 0.68%
- Gold down 0.6% to $1,958.28
- WTI up 0.6% to $43.00
- Bitcoin down 5.4% to $11,373
It was a largely quiet session in terms of key headlines, but the dollar kept up its advance against the rest of the major currencies bloc following yesterday's pullback.
Equities are faring better on the session still, with European stocks buoyed alongside US futures but that is doing little to distract from some reversal flows in the dollar.
EUR/USD got rejected at 1.2000 yesterday and continued to push lower during the session, slipping from 1.1900 to 1.1845 and challenging key near-term levels.
GBP/USD also fell from 1.3370 to 1.3326, testing its own 100-hour moving average before holding around 1.3330-40 levels thereafter.
AUD/USD kept a gradual decline from 0.7350 to 0.7326, with the aussie also seeing some selling pressure from cross flows against the kiwi - which is holding up a little after RBNZ governor Orr shrugged off concerns about the currency earlier today.
The yen also weakened slightly with USD/JPY climbing from 106.00 to 106.28 as Japan chief Cabinet secretary, Yoshihide Suga, becomes the frontrunner in the race to replace Shinzo Abe as the country's next prime minister.
Each asset class is pretty much just following its own separate narrative for the time being, as equities continue to rally while the dollar is firming on reversal flows after an abysmal end to August trading last month.
But the focus will slowly turn towards the US jobs report and we will have ADP employment later today to kick things off before getting to non-farm payrolls on Friday.
