Forex news from the European trading session - 27 October 2021
Headlines:
- Fitch downgrades yet another Chinese property developer
- US MBA mortgage applications w.e. 22 October +0.3% vs -6.3% prior
- Dollar, yen gains as long-end yields fall
- China developers reportedly proposed offshore debt maturity extension, restructuring to regulators
- Oil struggles amid back and forth last couple of days
- Germany November GfK consumer confidence 0.9 vs -0.5 expected
Markets:
- JPY leads, GBP lags on the day
- European equities lower; S&P 500 futures flat
- US 10-year yields down 2.7 bps to 1.592%
- Gold down 0.1% to $1,790.40
- WTI down 1.4% to $83.46
- Bitcoin down 5.5% to $58,668
It was a bit of a quiet session in terms of headlines but there were some decent moves in the market as we see equities keep more cautious while the Treasury yield curve flattened further as long-end yields stumbled on the day.
That kept the yen in a firmer spot in European morning trade, with the dollar also picking up a slight bid against other major currencies only for that to ease up a little as we start to move towards North American trading.
EUR/USD fell from 1.1610 to 1.1585 before holding around 1.1600 levels again, with large expiries still keeping price action more sticky ahead of the ECB tomorrow.
The pound is a notable laggard as cable slumped from 1.3780 to 1.3710 as buyers failed to breach key near-term levels @ 1.3773-75 on the session. A drop in GBP/JPY towards 156.00 is also perhaps something to attribute the steeper fall in the pound.
USD/JPY declined from 114.00 to 113.55 as the yen kept firmer across the board, with yen pairs in general also showing further signs of exhaustion since trading last week.
Meanwhile, USD/CAD marched up to its highest in nearly two weeks as price jumps from 1.2390 to 1.2410-20 levels on the session. AUD/USD held an early advance after a stronger-than-expected Q3 CPI data, only to pare gains from 0.7515 to 0.7490 before inching back up to just above 0.7500 currently.
Elsewhere, oil is keeping in a more defensive mood as price slips by over 1% to $83.46 while profit-taking in cryptos is seeing Bitcoin slump heavily back under $60,000.
