Forex news from the European morning session - 26 July 2019
Headlines:
- UK PM Johnson to stress to Macron that withdrawal agreement needs to be reopened
- Ireland's Coveney: Approach taken by Johnson is not the basis for an agreement
- Erdogan: Interest rate cut is not enough, will continue until year-end
- Economists slash forecast for euro area inflation outlook - ECB survey
- Germany fires warning to Boris Johnson on Brexit talk
- Germany June import price index -1.4% vs -0.7% m/m expected
- Macron is said to discuss Brexit with Johnson in the coming weeks
Markets:
- USD leads, AUD and NZD lags on the day
- European equities mixed; E-minis up 0.2%
- US 10-year yields down 1.4 bps to 2.067%
- Gold up 0.3% to $1,419.00
- WTI up 0.7% to $56.40
- Bitcoin down 0.9% to $9,790
It was a quiet Friday morning in European trading as markets turn their attention away from the hustle and bustle after the ECB yesterday to the release of the advance US Q2 GDP report later today at 1230 GMT.
There wasn't much notable movement apart from the dollar gathering some minor strength ahead of the key data release. EUR/USD moved lower from 1.1145 to 1.1130 and is now settling just above that.
Meanwhile, the pound inched lower as European lawmakers continue to give Boris Johnson the cold shoulder with regards to his Brexit approach. GBP/USD fell from near 1.2450 to 1.2425 early on before ranging between 1.2420-30 levels thereafter.
The dollar's gains on the session also stretched further against commodity currencies with the aussie and kiwi on the back foot in what has been a rough week. AUD/USD fell from 0.6940 to sit just under 0.6930 now and NZD/USD declined from near 0.6660 close to the 0.6640 level seen currently.
Looking ahead, markets are waiting with bated breath ahead of the advance US Q2 GDP report release in hope that it will provide more clues for Fed communication next week (but I reckon it'll have more influence on the September decision). In any case, watch out for short-term reactions to the data especially in yields; so be wary of JPY pairs too later on.
