European FX news roundup:
The RBA’s August policy decision was featured towards the tail end of Asia Pacific trade, and the central bank shocked by sticking to its tapering plan despite concerns over the spread of the virus in NSW, which is virtually surely going to dampen Q3 GDP.
The Australian dollar soared to the front pages, with the AUD/USD rising up from 0.7365 to 0.7408 before having gains capped closer to the 0.7400 mark, where it is currently trading slightly below.
The AUD/NZD pair also momentarily reversed its earlier decline, rising from 1.0530 to 1.0560 before falling to 1.0540. The kiwi is the session’s top gainer, benefiting indirectly from a stronger aussie, with NZD/USD rising from 0.6995 to 0.7015.
The dollar is weakening again as it continues its post-Fed woes, with EUR/USD rising from 1.1870 to 1.1890. GBP/USD has likewise risen from 1.3890 to 1.3930, remaining just above its 100-day moving average at 1.3919.
Meanwhile, the USD/CHF is expected to decline from 0.9050 to 0.9023, marking new lows in seven weeks.
Despite COVID-19 fears, risk sentiment is improving, with China taking strong efforts to try to contain the newest outbreak in the country amid the spread of the delta form. Futures in the United States and Europe are also marginally higher.
Other than that, Treasury yields have stabilized following yesterday’s plunge, but the technical picture in the bond market remains bleak, reminding us that the risks to risk sentiment haven’t gone away for the time being.
- NZD leads, USD lags on the day
- European equities higher; S&P 500 futures up 0.3%
- US 10-year yields up 1.7 bps to 1.188%
- Gold down 0.3% to $1,808.70
- WTI up 0.3% to $71.48
- Bitcoin down 1.0% to $38,486