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ForexLive European FX news wrap: Dollar firms, bond selling resumes


Securities:

Markets:

  • USD leads, NZD lags the day
  • European stocks up; S&P 500 futures up 0.4%
  • US 10-year rates up 2.5 basis points to 2.679%
  • Gold apartment at $1,932.30
  • WTI up 0.3% at $95.75
  • Bitcoin down 0.4% to $43,350

It was a quiet session for the most part, but the dollar continues its recent strong form as it strengthens slightly across the board.

There were few notable headlines in European morning trade, with the Russian central bank’s decision to cut its key interest rate from 20% to 17% arguably the highlight. This comes after the ruble rallied strongly in recent weeks after a massive drop at the start of the Russian-Ukrainian conflict.

Stocks are looking to end the week on a more positive note after Wall Street’s gains yesterday. European indices are up more than 1% while US futures are posting slight gains ahead of the subsequent open. But today’s advance comes after a difficult week for stocks in general.

Meanwhile, the bond market selloff continues to play out as Treasury yields continue to climb on the day. 2-year yields are back above 2.50% and 10-year yields are approaching 2.70% soon enough. The latter is now approaching its 200-month moving average at 2.67%, so this is a key level to watch out for.

In the FX space, the Dollar is expected to strengthen, with EUR/USD retreating to fresh 1-month lows around 1.0850-60. The euro itself has some weekend risk to consider with the French presidential election on the cards on Sunday.

GBP/USD is also weighed down as sellers start targeting the 1.3000 level. USD/JPY looks buoyant as it tries to hold above 124.00 now, with buyers hoping to try to retest 125.00 across the board.

Elsewhere, commodity currencies aren’t faring too well either with AUD/USD near lows around 0.7460 and NZD/USD down 0.6% at 0.6850. The Aussie and Kiwi are struggling to gain momentum after a bit of exhaustion following the post-RBA surge earlier in the week.


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