Forex news from the European trading session - 26 January 2021
Headlines:
- Italian prime minister Conte offers resignation to president - Corriere
- UK January CBI retailing reported sales -50 vs -33 expected
- PBOC governor Yi says China won't prematurely exit from supportive policy
- UK December jobless claims change 7.0k vs 64.3k prior
- Merkel: Pandemic management has 'slipped out of control'
- Germany reports 6,408 new coronavirus cases, 903 deaths in latest update today
- China has said it will conduct military exercises in the South China Sea this week
Markets:
- NZD leads, USD, JPY and CHF lag on the day
- European equities higher; S&P 500 futures up 0.1%
- US 10-year yields up 1.7 bps to 1.047%
- Gold flat at $1,855.20
- WTI up 0.6% to $53.10
- Bitcoin down 3.2% to $31,658
It was a see-saw session as the risk mood was more dour coming off Asia Pacific trading but gradually switched for the better during the European morning.
European equities opened more mixed and flat while US futures stuck to losses to start the session. However, things quickly turned in the opening hour of trade.
The softer risk appetite earlier on saw the dollar trade higher but that has since reversed amid the turnaround in risk and the greenback is among the laggards currently.
EUR/USD slipped from 1.2140 to 1.2108 but is now trading back to the highs and testing its 100-hour moving average @ 1.2145.
GBP/USD was also dragged to a one-week low of 1.3610 from 1.3670 but has now reversed course to close in on yet another test of the 1.3700 handle.
Commodity currencies were the early laggards but are now the leaders of the major currencies bloc, tracking the risk mood rather closely on the day so far.
AUD/USD fell from 0.7700 to 0.7669 but is now trading to the highs for the day at 0.7732 and contesting its key hourly moving averages @ 0.7726-33.
NZD/USD eased from 0.7190 to 0.7167 but found support from its 200-hour moving average to keep higher now closer to 0.7230.
While risk appetite has regained its footing, US futures are still pointing to little change compared to the close yesterday. That could still allude to sentiment being more subdued - and choppy - as we wait on the FOMC meeting tomorrow.
Microsoft earnings after the close today will be one to watch but the market is still keeping a close eye on the Fed before committing to anything.
