Forex news from the European trading session - 24 August 2021
Headlines:
- Fauci: Expects Moderna, J&J vaccines to receive complete approval 'relatively soon'
- Goldman Sachs still sees Fed tapering by year-end, now eyes a Nov announcement
- UK August CBI retailing reported sales 60 vs 23 prior
- RBNZ's Hawkesby: Rate hike postponed due to communication difficulties rather than economic risks
- Inflation pressures show little signs of abating
- Germany Q2 final GDP +1.6% vs +1.5% q/q prelim
Markets:
- NZD leads, EUR lags on the day
- European equities mixed; S&P 500 futures up 0.2%
- US 10-year yields up 1.5 bps to 1.27%
- Gold down 0.1% to $1,803.20
- WTI up 1.5% to $66.62
- Bitcoin down 0.3% to $49,389
It was a quiet session for the most part as the market dialed down after a lively start to the new week yesterday, settling into the countdown to Jackson Hole on Friday.
Risk sentiment remained calm and while European equities pared early gains to be more mixed now, US futures are still observing slight gains but off earlier highs.
In FX, the dollar is more muted following yesterday's drop with all the action centering around commodity currencies so far today.
The aussie and kiwi were mildly higher early on but pulled ahead after some hawkish remarks by RBNZ assistant governor, Christian Hawkesby.
He relayed a message that the central bank even contemplated raising the OCR by 50 bps last week and that only the last-minute curveball and nationwide lockdown announcement stopped them in their tracks from tightening monetary policy.
That helped see NZD/USD move up from 0.6915 to 0.6940 and the pair is sticking at the highs now ahead of North American trading.
USD/CAD also saw a bit of a push lower from 1.2650 to 1.2606 before keeping around 1.2620 levels now, as the loonie retains some of the momentum from yesterday.
Elsewhere, there is a bit of a push and pull among dollar pairs, namely EUR/USD, GBP/USD and USD/CHF, but all are trading close to flat levels and staying little changed amid narrow ranges - similarly for USD/JPY around 109.65-75.
It seems like the market is starting to sit on its hands awaiting Jackson Hole but just be wary of any dollar/risk positioning play ahead of the key risk event in the days ahead.
