Currencies observe risk-on mood ahead of European markets open

Commodity/Risk currencies lead the way

While the yen, swissie and dollar are lagging behind to begin the session. The main focus in markets at the moment is the slight optimistic tilt from US-China trade talks, which is reported to have concluded in Beijing a short while ago.

The sentiment there is lifting equities and risk assets in general and that's translated into gains for the kiwi, loonie and aussie to begin the day. Meanwhile, the yen is weighed lower on that while other major currencies are still ranging a little. The euro and pound are sitting near the highs for the day but trading ranges remain somewhat narrow. EUR/GBP sits in a 11 pips range so far while EUR/USD holds in a 29 pips range to start the day.

There isn't much else that markets are focusing on right now but we will have German economic data to come at the top of the hour followed by the Bank of Canada meeting decision later in North American trading. Aside from that, look out for Fed speakers and Poloz's press conference later before the release of the FOMC meeting minutes.

In between all of that, be wary of headlines to come from Westminster on Brexit as well as potential US-China trade headlines to hit the wires.

As for European trading, expect the focus to be on risk with sentiment still seen as buoyant for the time being. That sets up a good start for European equities later.

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