ForexLive European FX news wrap: Risk shudders on US-China tensions

Forex

Forex news from the European trading session – 15 May 2020

Headlines:

Markets:

  • JPY leads, NZD lags on the day
  • European equities mildly higher; E-minis down 0.8%
  • US 10-year yields down 2 bps to 0.60%
  • Gold up 0.1% to $ 1,732.16
  • WTI up 2.5% to $ 28.27
  • Bitcoin down 0.6% to $ 9,598

EOD 15-05
The session began with more tepid risk tones and that stayed the course for the most part until US-China tensions started to rear its ugly head once again.

A Reuters report noted that the US has moved to cut Huawei off global chip suppliers, resulting in escalating tensions between US and China that set off a wave of risk aversion.

US futures saw mild gains turn into losses of over 1% as the negative rhetoric weighed on the risk mood. Meanwhile, European stocks saw their catch up gains mostly pared as well.

In the currencies space, that is putting a bid in the yen and dollar with USD/JPY easing to around 106.90-05 with large expiries seen in the pair at 107.00 today.

The aussie and kiwi were the ones hit the most, with AUD/USD falling from 0.6460 amid a test of its key hourly moving averages to 0.6425.

The pound is also taking a knock lower on the day as Brexit negotiations fail to make any progress once again, with the end-June deadline creeping nearer.

Cable is down to fresh lows since 27 March in a drop from 1.2200 to 1.2156 as the currency stays pressured against the dollar amid the risk-off mood as well.

Looking ahead, it’ll once again be a question of whether or not dip buyers can come to the rescue for US stocks. It’s going to be an exciting one ahead of the weekend.

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