European Forex news roundup: Risk assets rally but remain under pressure, while the Bank of England supports pound gains.
Forex market news from the European trade session on September 23, 2021
A cautious start rapidly evolved into a risk rally as Evergrande worries faded and post-Fed momentum maintained, with European indices climbing little more than 1% and US futures jumping nearly 1% on the session.
However, a WSJ article kept markets in check, putting a damper on the excitement, as Chinese authorities are alleged to have cautioned local governments to brace for Evergrande’s demise.
Risk trades have retreated slightly as a result, with S&P 500 futures reducing gains to about 0.5 percent to 0.6 % today.
EUR/USD has been stuck around 1.1710-20 levels as massive expiries at 1.1700 are pulling price action a little, acting as more of a magnet on the day so far.
USD/JPY progressively rose from 109.90 to 110.00 as yields rose in response to the more hawkish BOE communiqué issued in the previous hour.
The pound was a big benefit, with GBP/USD rising from 1.3680 to 1.3720 as the BOE stated that conditions are beginning to shift in favor of tightening policy and that they may do so before QE ends.
Despite further weak data on the recovery, inflation remains a danger to policymakers’ judgment of the medium-term prognosis.
The loonie is leading the charge among commodity currencies, with USD/CAD down by more than 100 pips on the day. In Europe, the pair fell from approximately 1.2720 to 1.2650 as sellers broke below important near-term support to recover control, with 1.2600 being the next target.
The AUD/USD has moved up from 0.7240 to 0.7270-80 levels, while the NZD/USD has moved up from 0.7020 to 0.7050 levels.
As much as the Fed’s commitment to tapering by the end of the year is a huge item in trade this week, the market’s underlying tone and general reaction suggests that what is occurring in China is still the key driver alongside risk sentiment at the moment.
Markets News :
- CAD leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.6%
- US 10-year yields up 1 bps to 1.341%
- Gold up 0.2% to $1,771.85
- WTI down 0.5% to $71.88
- Bitcoin flat at $43,450