Forex news from the European morning session - 25 April 2019
Headlines:
- Joe Biden announces that he will seek Democratic presidential nomination in 2020
- UK April CBI retailing reported sales 13 vs 0 expected
- ECB: Global headwinds continue to weigh on Eurozone growth
- BOJ's Kuroda: Won't mull rate hike until around spring 2020 no matter what
- BOJ's Kuroda: Clarifying guidance is a step to improve credibility
- BOJ's Kuroda: Central bank wants to make stance clear on persistent monetary easing
- Kim Jong Un and Vladimir Putin meet for the first time
- PBOC's Liu: Central bank has no intent to tighten or relax monetary policy
Markets:
- JPY leads, EUR lags on the day
- European equities mixed; E-minis flat
- US 10-year yields up 0.5 bps to 2.524%
- Gold up 0.1% to $1,276.70
- WTI up 0.5% to $66.20
- Bitcoin flat at $5,440
There wasn't much key headlines to really drive market sentiment as traders had to rely on the ebb and flow for the most part on the session. The dollar picked up from where it left off yesterday and is extending gains as we move towards North American trading later.
EUR/USD pushed lower from 1.1150 to 1.1120 levels on the session and is holding just above that currently. Meanwhile, the pound also succumbed and fell to a two-month low against the greenback with cable dropping from 1.2900 to 1.2870 levels now.
The dollar's strength also stretched towards commodity currencies with AUD/USD slipping below 0.7000 briefly for the first time since the January flash crash. Meanwhile, USD/CAD continues to push higher above the 1.3500 handle after the BOC is seen to abandon its hiking bias yesterday.
The move higher in the dollar can be attributed to flows moving to US equities and also a technical breakout in EUR/USD (dollar index as well) but fundamentally, the simple reasoning of the dollar being the best of a bad bunch is what I prefer to go with right now.
The only currency holding its own against the greenback is the yen. USD/JPY started the European morning around 112.00 but fell slightly to 112.74 before recovering to 111.80 levels now as the dollar gains some ground. There isn't much notable headlines - even from the BOJ - driving the yen higher but I reckon some flows related to the long break in Japan could perhaps be part of the reason.
In case you need a reminder, Japan will observe a 10-day break after the end of this week so expect liquidity to remain thin in Asian trading and market participants are already feeling a bit jittery about another potential flash crash.
