ForexLive European FX news wrap: Dollar decline eases a little on trade worries


Forex news from the European trading session – 1 June 2020



  • AUD leads, USD lags on the day
  • European equities higher; E-minis up 0.2%
  • US 10-year yields up 1 bps to 0.664%
  • Gold flat at $ 1,731.25
  • WTI down 0.1% to $ 35.45
  • Bitcoin up 1.0% to $ 9,516

EOD 01-06
The dollar kept on the back foot to start the week and losses accelerated as traders built on the relief that Trump’s actions on China offered more bark than bite at the end of last week.

The risk mood was also seen slightly better with European equities opening higher and US futures turning around initial losses to minor gains to start the session.

But that was tempered by a report that China has halted some farm purchases from the US, notably soybeans, in a sign of potential retaliation amid the Hong Kong row.

US futures slipped into negative territory and the dollar pared some losses on that, with the yen also gaining some modest ground on the immediate reaction to the news.

AUD/USD fell from 0.6770 to 0.6730 while EUR/USD declined from 1.1150 to 1.1120. At the same time, USD/JPY eased from around 107.55-60 to a low of 107.39.

But as markets had time to digest that, with the fact that China hasn’t been buying soybeans from the US anyway this year, the risk mood recovered slightly.

US futures are now a tad higher and the dollar remains more on the defensive, with AUD/USD still up by a little over 1% currently on the day and cable still near 1.2400.

EUR/USD is keeping lower though, at 1.1110 as the late March highs are still capping gains in the pair since trading towards the end of last week.

It is now over to Wall Street to see how investors there will digest all of this, alongside the civil unrest across the US, but so far the break of key technical levels in risk and against the dollar are all still holding up despite some tempering of the optimism.

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