Forex news from the European trading session – 18 May 2020
- AUD leads, JPY lags on the day
- European equities higher; E-minis up 2.0%
- US 10-year yields up 1.3 bps to 0.656%
- Gold up 1.2% to $ 1,764.12
- WTI up 9.2% to $ 32.15
- Bitcoin up 4.5% to $ 9,653
The market is adopting a risk-on approach to start the week, with US futures keeping around 1% gains in the early morning before doubling that as we end the session.
One can argue that investors are taking comfort in Fed chair Powell’s message that the central bank is committed to do whatever is necessary to ensure the economic recovery, but as we moved along the morning, vaccine talk helped to give risk an added push.
This has seen the yen and dollar lose some ground, with the commodity currencies benefiting strongly from the improved sentiment to kick start the week.
AUD/USD rose from 0.6430-40 to 0.6470 while NZD/USD climbed from 0.5950 to 0.5985.
The pound also capitalised and recouped some losses with cable rising from around 1.2090-00 levels to sit near the highs just above 1.2150 currently.
Elsewhere, oil prices also took heart from a Bloomberg report that Chinese oil demand is near full swing once again. That is helping prices to stay underpinned just above $ 32.
Meanwhile, gold is continuing its recent technical breakout and has been consolidating gains around $ 1,760-65 for the most part during the session.
It is all about risk right now and the market is showing signs of optimism once again. The S&P 500 index looks poised for yet another retest of its 61.8 retracement level @ 2,934.49 so let’s see if the positive momentum can keep up today to get there.