European Forex news roundup: A new COVID-19 version ignites a flight to safety
Forex market news from the European trade session on November 26, 2021
South Africa’s new COVID-19 model is dominating the show in markets today, as anxiety spreads across all asset classes in a typical day of flight to safety.
The WHO is currently debating whether the latest strain should be classified as a “variant of concern,” as many nations are already strengthening border restrictions with the southern African region throughout the day.
The negative reaction is weighing heavily on equities, with European indices down around 4% across the board at one point until the losses were pared when the fearmongers took a pause after the first hour of trading.
But there was no respite in the bond market, with 10-year Treasury yields falling by 12 basis points to 1.524 % and 2-year yields falling by the highest since March of last year, falling by 11 basis points to 0.53 % .
The yen is gaining ground in the major currency area as yields fall, with USD/JPY falling from 114.50 to 113.66 before quickly rebounding to 114.20. But the gloomy atmosphere persists, and the price is now hovering around 113.90-00 once more.
The franc is the second big winner, with USD/CHF falling from 0.9320 to 0.9250 during the day, while the dollar only advanced versus commodity currencies.
The AUD/USD fell from 0.7140 to 0.7115, approaching its August low of 0.7106 before rallying back a little to 0.7140 – still down 0.7 % .
Meanwhile, the New Zealand dollar (NZD/USD) fell from 0.6830 in late Asian trading to test its August lows of 0.6805-09 before settling around 0.6820-30 now, but it is still down 0.5 % on the day.
The Canadian dollar is the largest loser, with the USD/CAD rising from 1.2710 to 1.2770 as oil prices fell amid concerns about demand forecast as the new COVID-19 variant threatens to stymie global reopening and travel.
WTI was pummeled from $76 to a low of $72.60, a 7 % decrease, before settling around $73 levels for the time being.
The rout may ease later today due to weaker market circumstances, but with the weekend approaching, expect the heavy risk mood to last until the close.
Markets News :
- JPY leads, CAD lags on the day
- European equities sharply lower; S&P 500 futures down 1.7%
- US 10-year yields down 12 bps to 1.524%
- Gold up 1.2% to $1,809.81
- WTI down 6.4% to $73.37
- Bitcoin down 8.9% to $54,423