Forex news from the European morning session - 24 January 2019
Headlines:
- ECB leaves key rates unchanged as expected
- UK government said to be fighting efforts to delay Brexit
- BOE's Carney: No magic level of interest rates we're trying to return to
- SNB's Jordan: Negative rates, intervention pledge is 'sufficient'
- Eurozone January flash manufacturing PMI 50.5 vs 51.4 expected
- Germany January flash manufacturing PMI 49.9 vs 51.5 expected
- France January flash manufacturing PMI 51.2 vs 50.0 expected
- EU's Barnier: If no positive proposals are made by Britain, it will be a no-deal Brexit
- NAB may be late to the party, but piles further pressure on the RBA
- Trump says will do State of the Union address when shutdown is over
Markets:
- USD leads, AUD lags on the day
- European equities higher; E-minis up 0.2%
- US 10-year yields down 1.8 bps to 2.722%
- Gold down 0.3% to $1,279.01
- WTI down 0.9% to $52.15
- Bitcoin up 0.4% to $3,560
The aussie was the early notable mover on the day as it fell in Asian trading after NAB decided to join the rest of the "Big Four" Australian banks in raising mortgage rates. AUD/USD began the session around 0.7120 and then fell to a low of 0.7089 on the back of some dollar strength and further weakness in the aussie before climbing back to hug the 0.7100 handle.
But the main currency in focus on the session was the euro as the single currency fell from 1.1370 against the dollar to 1.1340 after disappointing PMI figures before posting a rebound back towards 1.1370. But as markets anticipated a more dovish ECB and Draghi, the pair fell to a low of 1.1330 aided by dollar strength before settling around 1.1340-50 after the ECB decision. All eyes will be on Draghi's press conference now at 1330 GMT.
The pound was also a notable mover as cable ran into some key resistance levels earlier in the day resulting in a fall as markets continue to wait on fresh Brexit developments. Cable still holds above the 1.3000 handle but steadily fell from 1.3060 to a near the lows now around 1.3020.
Meanwhile, USD/JPY traded narrowly around 109.60-70 levels for the most part as risk sentiment continues to look choppy. Equities were flat early on but recovered slightly as we move towards US trading, though it's more of a case that markets are viewing the glass to be half-full rather than half-empty at the moment. Watch out for earnings and any fresh headlines on US-China trade talks for further direction later today.
Other than that, the dollar held steady against the rest of the major bloc pushing forward ahead of PMI releases later today. The US shutdown enters into Day 34 and the longer it drags on, the more it is making it tough to gauge dollar sentiment with the lack of firm economic data releases.
