Forex news from the European trading session - 28 August 2018
Headlines:
- UK Treasury reportedly said to have approached Carney to extend BOE tenure by a year
- Google next in the firing line for Trump?
- More intervention by HKMA to defend currency peg
- UK's Fox on Brexit: We made a fair and reasonable offer to the EU
- North Korea letter said to warn that denuclearisation talks 'may fall apart' - CNN
- Eurozone July M3 money supply +4.0% vs +4.3% y/y expected
- More from Maas: A hard Brexit is not off the table yet
- Germany's foreign minister says expect US to revoke tariffs threat
- France August consumer confidence 97 vs 97 expected
- Italy's Tria says Italy-Germany bond yields spread is narrowing
- Bank of France deputy governor says that growth is slowing in 2018
- Italy may breach deficit limit on income support plan - report
Markets:
- CHF leads, AUD lags on the day
- European equities mixed, Italy leads losses
- Gold up 0.07% to $1,212.27
- WTI flat at $68.87
- US 10-year yields up 0.3 bps to 2.949%
- Bitcoin up 3.44% to $6,950
The session started with mild gains for the greenback and it stayed that way until the cash equity market opened in Europe. Traders offered the dollar and the euro and the swissie were the two major beneficiaries on the first wave. The latter even touched a four-months high against the dollar in trading and is continuing to post further gains on the day.
A second wave of dollar selling hit and that has seen most major currencies trading near the day's high against the greenback ahead of US trading.
In between all of that, European equities traded higher for the most part but Italian stocks remain in the red following as domestic yields continue to shoot up. There was also time for Trump to take a snipe at Google on search results but all in all, headlines offered little on the session.
Looking at individual currencies, EUR/USD traded around 1.1670-80 before moving to a low of 1.1663 as the dollar opened the session with mild gains. But the pair subsequently slowly tracked higher and touched above the 1.1700 handle and continues to test the figure level currently with large expiries helping to limit gains among other key levels.
USD/JPY once again had another subdued session as the pair traded at 111.20 before moving to near lows of 111.01 as the dollar weakened and now trades just above the figure level ahead of the next session.
GBP/USD started around 1.2880 before falling to a low of 1.2862 as the dollar opened firmer but much like the euro, the pound moved higher against the dollar as the latter weakened. Cable then tracked higher to test the 1.2900 handle where it currently sits just below.
USD/CHF was one of the main beneficiaries of the dollar's downfall. Overnight trading saw the pair close below the 100-day MA and sellers are capitalising on that, sending the pair to four-month lows in trading today.
USD/CAD started the session a little subdued even as the dollar gained. The pair traded around 1.2960-70 levels but then fell to lows of 1.2936 as the dollar weakened late in the session. Price continues to linger there with trade talks with the US and Mexico still very much up in the air.
AUD/USD began near the lows of 0.7330 and moved a little lower to 0.7321 early in the session. Price stayed around 0.7325-40 for the most part but then traded to a high of 0.7357 as the dollar weakened before falling off a bit now.
NZD/USD saw similar action traded to lows of 0.6677 early on before moving higher as the dollar weakened to reclaim territory above the 0.6700 handle where it currently trades.
