Forex news from the European trading session - 6 July 2021
Headlines:
- More on the PBOC warning over cryptocurrency risks
- PBOC issues warning on cryptocurrency risks
- ECB's de Guindos: Sees 'intense' economic rebound in 2H 2021
- Germany July ZEW survey current conditions 21.9 vs -9.1 prior
- UK June construction PMI 66.3 vs 64.2 prior
- RBA's Lowe: Not thinking of rate increases in 2023
- RBA's Lowe: Do not expect cash rate to be increased until 2024 at the earliest
- Germany May factory orders -3.7% vs +0.9% m/m expected
- No big surprises by the RBA today
- RBA leaves cash rate unchanged at 0.10% in July monetary policy decision
Markets:
- NZD leads, CAD lags on the day
- European equities lower; S&P 500 futures flat
- US 10-year yields down 0.4 bps to 1.427%
- Gold up 0.9% to $1,807.20
- WTI up 1.3% to $76.12
- Bitcoin up 0.3% to $33,941
It was a quiet session for the most part but there were some decent moves in the market though the dollar is keeping more mixed and sluggish, awaiting the return of US traders and also the FOMC meeting minutes release tomorrow.
The greenback eased in early trades but recovered to sit higher against the euro, with EUR/USD backing away from a test of its 200-hour moving average @ 1.1893.
GBP/USD also pared gains from 1.3897 to 1.3850 while USD/CAD got a slight lift from 1.2305 to 1.2360 even as oil prices are looking upbeat once again today.
OPEC+ talks got abandoned yesterday and that was enough for oil to hit levels last seen since 2014 although the 2018 highs are still capping daily gains for now just above $76.
Elsewhere, the kiwi held on to gains after having seen RBNZ rate hike calls brought forward, with NZD/USD just off highs of 0.7105 at around 0.7080-90 currently.
The RBA announced the start of tapering (by the slightest of margins), though coming together with an extension of bond purchases to November this year.
The aussie got an indirect lift from the kiwi boost and is also holding on to most of its gains, though AUD/USD backed away after testing 0.7600 to 0.7570 levels now.
In the crypto space, headlines from China saw Bitcoin took a slight hit from $35,000 down to $33,800 before a bit of a recovery in the past five minutes to $34,200 again.
