Forex news from the European trading session - 6 June 2018
Headlines:
- ECB's Knot says should wind down QE as soon as possible
- Germany's Merkel sees possibility G7 will fail to agree a joint statement
- EU says that retaliatory tariffs on US goods to come into force in July
- ECB's Knot says 'reasonable' to announce end of asset purchases soon
- Eurozone May retail PMI 51.7 vs 48.6 prior
- Germany May construction PMI 53.9 vs 50.9 prior
- Switzerland May CPI +0.4% vs +0.3% m/m expected
- ECB's Weidmann says inflation to gradually return to levels compatible with target
- ECB's Hansson says higher rates are possible before mid-2019
- ECB's Praet says market expectation for QE end this year will be noted for discussion
- Spain April industrial production -1.8% vs -0.2% m/m expected
- ECB's Praet says signals showing convergence of inflation towards target have improved
Markets:
- AUD leads on the day, CHF and JPY lags behind
- European equities higher on the day
- Gold down by 0.10% to $1,295.32
- WTI down by 0.60% to $65.13
- US 10-year yields up by 2.8 bps to 2.955%
- Bitcoin down by 0.06% to $7,625
The session started off a little slow once again, with narrow ranges among major currencies with the exception of the aussie and the loonie. Then, we started hearing from ECB's Praet who provided a more outlook on the ECB's view towards inflation - and then came in Hansson and Weidmann chipping in with the same rhetoric as well and that pushed the euro higher.
EUR/USD was trading around 1.1730 levels before the comments but jumped to a high of 1.1750 after before extending gains during the session to a high of 1.1776.
GBP/USD traded less active with a range of 1.3400 to a high of 1.3438 during the session, with sterling upside capped by key resistance levels seen in GBP/JPY. USD/JPY on the other hand traded just below the 110.00 handle at the beginning and then broke above the figure level and stayed there for the rest of the session - though still below the 200-day MA.
USD/CAD remains pinned down after news from Asian trading that Canada may be considered for exemption from US tariffs and the pair has been trending lower bit by bit during the session.
Meanwhile, AUD/USD peaked at the start of the session at a high of 0.7673 but has managed to retain majority of its gains in trading, ranging between 0.7650 to 0.7670 for the most part. The jump in the aussie has also helped to underpin the kiwi on the day.
Little else went on during the session, but the ECB officials' comments also helped to spark some selling in European bonds. German 10-year yields are up by 8 bps to 0.45% - set for its biggest daily jump in almost a year.
