Forex news from the European trading session – 15 May 2020
- 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
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.