Forex news from the European trading session - 23 August 2018
Headlines:
- No-deal Brexit outcome means higher costs in buying from the EU, says UK government
- Bank of Russia says it won't buy FX on domestic market until end of September
- UK's Raab: Confident a good Brexit deal is within our sights
- UK August CBI retailing reported sales 29 vs 13 expected
- ECB's Weidmann says it is time to exit very expansionary monetary policy
- SNB's Moser says it could take years for central bank to reduce balance sheet, if ever
- Eurozone August flash manufacturing PMI 54.6 vs 55.2 expected
- Germany August flash manufacturing PMI 56.1 vs 56.5 expected
- UK's Raab says there will be risks and challenges in no-deal Brexit scenario
- China says that it is "extremely concerned" about Australia's decision regarding Huawei
- Switzerland Q2 industrial output WDA +8.3% vs +7.5% y/y expected
- France August flash manufacturing PMI 53.7 vs 53.5 expected
- France August business confidence 105 vs 107 expected
- South Africa says will seek clarification from US embassy on Trump tweet
- Australia's foreign minister said to be in the running for Liberal party leadership too
- Japan June final leading indicator index 104.7 vs 105.2 prelim
Markets:
- CHF leads, AUD lags behind on the day
- European equities mixed, mostly flat
- Gold down 0.46% to $1,190.32
- WTI up 0.10% to $67.93
- US 10-year yields up 0.9 bps to 2.828%
- Bitcoin up 1.46% to $6,423
The dollar rebounded in Asian trading posting decent gains as we started the European trading session. We had a couple of data points to move the session along but that didn't do too much to move the needle in markets on the day. Most currencies traded range-bound but as we are closing out the session now there is notable declines in the dollar across the board.
The aussie remains the weakest performing currency as a myriad of factors weigh on the currency with Australian politics hogging the spotlight. The dollar meanwhile has been the leader for almost the entire day as it caught a bid in early Asian trading with technical levels also helping to support its case. Not much else took place during the session as we had a flurry of PMI readings in Europe which didn't offer much optimism for Q3 growth improvement.
Other than that, there is the usual Brexit headlines as the UK government publishes its guidance on a no-deal Brexit outcome. And as we end the session, dollar offers are notable but ranges so far today are still intact.
EUR/USD started the session near the lows at 1.1550 before trading higher to 1.1570 and then falling back. The pair stayed around 1.1550-60 levels before climbing higher now as the dollar is offered towards the end of the session. The 1.1600 level remains key though for buyers.
USD/JPY has had a more subdued session though trading around 110.80-90 for almost the entire session as key technical levels and large expiries continue to cap any further gains in the pair.
GBP/USD was a tad more eventful trading between 1.2850-70 levels for the most part but the lows tested bids at the 1.2850 level before the pair is now moving higher back towards 1.2900 as the dollar slips a little on the session. Just like EUR/USD, the 1.2900 level is key for buyers too in GBP/USD.
Commodity currencies traded more range-bound on the day with USD/CAD having moved between 1.3020-30 levels for the most of the session. Even as the dollar loses some steam now, the pair continues to trade in that range as oil prices are also trading narrowly.
AUD/USD traded between 0.7290 to 0.7310 for the entire session as aussie sentiment remains fragile. The pair continues to stay just above the 200-hour MA and that is the technical level that is still holding up the pair for the time being.
NZD/USD traded more similarly to USD/CAD as the pair moved between 0.6660-70 levels for the most part and still trades around there as the dollar is a little lower on the day.
