Forex news from the European morning session - 6 March 2019
Headlines:
- US MBA mortgage applications w.e. 1 March -2.5% vs +5.3% prior
- EU: Barnier remarked that there is no solution yet to Irish border issue
- UK's Fox: Not ruling out voting for a no-deal Brexit next week
- OECD cuts 2019 global economic growth forecast to 3.3% from 3.5%
- China says that it doesn't use exchange rate to create trade advantages
- Macquarie now also sees a 50 bps cut by the RBA this year
- BOJ's Harada: There could be a big impact from sales tax hike
- BOJ's Harada: Will take action if risks to price target materialise
Markets:
- JPY leads, AUD lags on the day
- European equities mixed; E-minis down 0.1%
- US 10-year yields down 0.4 bps to 2.713%
- Gold down 0.1% to $1,286.45
- WTI down 0.8% to $56.13
- Bitcoin up 0.5% to $3,852
It was a quiet morning in Europe as most of the major market moves occurred during Asian trading with little extension/follow through seen. The Australian dollar is hogging the spotlight as it crumbles on growing expectations for the RBA to cut rates, following a poor Q4 GDP report earlier in the day.
AUD/USD slipped to a low of 0.7030 as we began the session and traded between 0.7025-40 for the most part and is hugging the lows currently. With the aussie slipping, NZD/USD was also slightly pressured as it ranged between 0.6760-75 throughout the European morning.
The pound was the other notable mover on the day as it also fell in Asian trading with Brexit negotiations yesterday failing to produce a breakthrough, souring sentiment ahead of next week's meaningful vote. But this mainly takes away hopes of a legally binding assurance - which was not expected anyway - so it's not like much has changed.
GBP/USD began London trade around 1.3145 and ranged between 1.3130-50 for majority of the session, with no new developments to really shake things up.
Besides that, the loonie also saw decent movement with USD/CAD still trading at two-month highs around 1.3360-80 with the Bank of Canada meeting set to be the focus in North American trading today. Perhaps traders are pricing in slight dovish expectations ahead of the event, with USD/CAD also notably holding at key resistance levels currently.
Other major currencies were less active and traded around unchanged levels against the dollar, with EUR/USD sitting in a 20 pips range still pivoting around 1.1300. Meanwhile, USD/JPY stays subdued at 111.80 levels with traders having little direction to work with as risk sentiment remains tepid.
