Forex news from the European trading session - 4 March 2019
Headline:
- China said to be planning $90 billion cut in VAT for manufacturers
- Eurozone March Sentix investor confidence -2.2 vs -3.1 expected
- UK February construction PMI 49.5 vs 50.5 expected
- Nomura now sees the RBA cutting its cash rate by 50 bps this year
- Huawei said to be preparing to sue the US government - report
- Japan's Abe: Believes that Abenomics, BOJ policies have worked
- BOJ's Kuroda: Economy is no longer in deflation
Markets:
- AUD leads, EUR lags on the day
- European equities higher; E-minis up 0.3%
- US 10-year yields down 0.9 bps to 2.744%
- Gold down 0.4% to $1,288.06
- WTI up 0.7% to $56.19
- Bitcoin down 3.2% to $3,705
The European morning was quiet in terms of headlines, with little on the economic calendar to aid markets in search for direction. Weekend comments were predominantly the key themes that markets were focusing on as US-China trade optimism helped equities and risk assets gain some ground, Brexit delay talks helped to underpin the pound, and Trump lamented the dollar as being 'very strong', which saw the currency slightly weaker initially.
But most of that has been forgotten as we start to move towards North American trading with the pound's gains being tempered with and the dollar firming up against the rest of the major currencies bloc.
Cable began the session around 1.3240 off highs of 1.3270 in Asian trading before slipping to a low of 1.3181 as the dollar gained and the pound lost some of its weekend optimism on the lack of follow through Brexit headlines. The pair now trades close to 1.3200 after bouncing off the lows.
The aussie and kiwi remain a little buoyed by trade optimism but AUD/USD fell from 0.7090 to 0.7075 earlier before regaining some poise to trade back at early morning levels. NZD/USD notably dropped from 0.6820 to 0.6800 before trading closer to 0.6810 currently.
With the dollar staying firm, EUR/USD slipped from 1.1360-70 to a low of 1.1328 where it is trading just above now, as sellers start to regain some near-term control in the pair. Meanwhile, USD/JPY held steady at 111.80-90 levels throughout with the 112.00 handle still proving to be a step too far for buyers.
Looking ahead, there isn't much on the economic calendar as well so expect trading sentiment to rely on the ebb and flow; much like what we have seen so far. Risk sentiment should continue to be a key focus so keep an eye out on Wall Street to see how stocks perform to start the week.
